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Going for gold
The world's mints are coining it as unprecedented numbers of savers
search for safer investments
By Sarah Marsh in Vienna and Jan Harvey in London
The Independent/UK
Sunday, 5 April 2009
LEONARD FOEGER/REUTERS
The Austrian Mint is producing more Philharmonic gold coins in a week
than it normally does in a month
A few years ago his visits to the mint, founded more than 800 years
ago, might have seemed eccentric. No longer. From the Russian Georgy
Pobedonosets to the American Eagle, gold coin production is being
cranked up in mints around the world to satisfy customers believing the
assets may be immune to the global financial crisis.
Russia's state-controlled Sberbank says it has never seen such strong
demand for investment coins. In Australia, the Perth Mint had to
suspend new orders for gold coins because it could not keep pace with
overseas demand. And, in America, the US Mint says sales of its
one-ounce American Eagle gold bullion coins rocketed by more than 400
per cent to 710,000 ounces in 2008. "The demand for gold and silver,"
said US Mint spokeswoman Carla Coolman, "has been unprecedented."
Austria's Philharmonic, named after the Vienna Philharmonic Orchestra,
was the world's best-selling gold coin in the last quarter and sales
soared 544 per cent in the first two months of 2009. "There is no sign
of demand abating," Austrian Mint's marketing director
Kerry Tattersall
said. Sales this year are expected to exceed 2008's record levels. "At
present, production is struggling to keep up with demand."
Hans Dieter Rauch, who sells both collectors' and investors' coins in
his boutique on Graben, one of Vienna's most exclusive shopping
streets, said revenues rose 300 per cent last year. "It's the man in
the street, not particularly rich people but normal citizens like you
and me," said Mr Rauch, 65, monitoring the fluctuating price of gold on
a screen in his back room.
Gold hit a record high of $1,030.80 (£700) an ounce in March 2008 and
last month rose back above $1,000. Jewellery sales by cash-strapped
Americans and Europeans have helped to slow the metal's rise in recent
weeks.
The Czech Republic's Komercni Banka this month added gold coins and
bars to its traditional portfolio of products. Even the Central Bank of
Armenia is at it, issuing 10,000 gold coins with a Zodiac signs design.
And, in New Zealand, Michael O'Kane, head bullion trader at the mint,
said it was averaging a month's transactions in a day.
Wealthy investors are more likely to invest in bars than coins as the
premium for production costs is lower, said Wolfgang
Wrzesniok-Rossbach, head of sales at the precious metals group Heraeus.
"If you buy a kilo bar you have to pay the surcharge for producing the
bar, which is pretty low, only once" he said. "If you buy 30 1oz coins, =0
D
which would be about equal to a 1kilo bar, you have to pay 30 times
that amount."
Coins have the edge for small investors who want flexibility and
appreciate their aesthetic allure. Demand is for more than physical
products: in the past few years, gold has been sought after for
speculative gains, with interest in gold-backed funds in particular
soaring. But since the financial crisis accelerated last autumn,
interest in coins and bars has increased, with investors seeking
security rather than profit.
Other manufacturers are reducing output and jobs, but the Royal
Canadian Mint quadrupled capacity to produce its bullion gold and
silver Maple Leaf coins in late 2008, and the Austrian Mint is
producing in one week what it usually churns out in a month. It has
extended its shifts throughout the night and weekend and recruited more
workers to cope with the surge in demand.
The world's mints are coining it as unprecedented numbers of savers
search for safer investments
By Sarah Marsh in Vienna and Jan Harvey in London
The Independent/UK
Sunday, 5 April 2009
LEONARD FOEGER/REUTERS
The Austrian Mint is producing more Philharmonic gold coins in a week
than it normally does in a month
A few years ago his visits to the mint, founded more than 800 years
ago, might have seemed eccentric. No longer. From the Russian Georgy
Pobedonosets to the American Eagle, gold coin production is being
cranked up in mints around the world to satisfy customers believing the
assets may be immune to the global financial crisis.
Russia's state-controlled Sberbank says it has never seen such strong
demand for investment coins. In Australia, the Perth Mint had to
suspend new orders for gold coins because it could not keep pace with
overseas demand. And, in America, the US Mint says sales of its
one-ounce American Eagle gold bullion coins rocketed by more than 400
per cent to 710,000 ounces in 2008. "The demand for gold and silver,"
said US Mint spokeswoman Carla Coolman, "has been unprecedented."
Austria's Philharmonic, named after the Vienna Philharmonic Orchestra,
was the world's best-selling gold coin in the last quarter and sales
soared 544 per cent in the first two months of 2009. "There is no sign
of demand abating," Austrian Mint's marketing director
Kerry Tattersall
said. Sales this year are expected to exceed 2008's record levels. "At
present, production is struggling to keep up with demand."
Hans Dieter Rauch, who sells both collectors' and investors' coins in
his boutique on Graben, one of Vienna's most exclusive shopping
streets, said revenues rose 300 per cent last year. "It's the man in
the street, not particularly rich people but normal citizens like you
and me," said Mr Rauch, 65, monitoring the fluctuating price of gold on
a screen in his back room.
Gold hit a record high of $1,030.80 (£700) an ounce in March 2008 and
last month rose back above $1,000. Jewellery sales by cash-strapped
Americans and Europeans have helped to slow the metal's rise in recent
weeks.
The Czech Republic's Komercni Banka this month added gold coins and
bars to its traditional portfolio of products. Even the Central Bank of
Armenia is at it, issuing 10,000 gold coins with a Zodiac signs design.
And, in New Zealand, Michael O'Kane, head bullion trader at the mint,
said it was averaging a month's transactions in a day.
Wealthy investors are more likely to invest in bars than coins as the
premium for production costs is lower, said Wolfgang
Wrzesniok-Rossbach, head of sales at the precious metals group Heraeus.
"If you buy a kilo bar you have to pay the surcharge for producing the
bar, which is pretty low, only once" he said. "If you buy 30 1oz coins, =0
D
which would be about equal to a 1kilo bar, you have to pay 30 times
that amount."
Coins have the edge for small investors who want flexibility and
appreciate their aesthetic allure. Demand is for more than physical
products: in the past few years, gold has been sought after for
speculative gains, with interest in gold-backed funds in particular
soaring. But since the financial crisis accelerated last autumn,
interest in coins and bars has increased, with investors seeking
security rather than profit.
Other manufacturers are reducing output and jobs, but the Royal
Canadian Mint quadrupled capacity to produce its bullion gold and
silver Maple Leaf coins in late 2008, and the Austrian Mint is
producing in one week what it usually churns out in a month. It has
extended its shifts throughout the night and weekend and recruited more
workers to cope with the surge in demand.