There’s a new gold rush.
The financial crisis is prompting people to look for safer forms of investment than stocks and shares.
|Both international speculators and ordinary Austrians want to get their hands on gold|
The interest in gold coins is so great that many of the world’s major mints are struggling to keep up with demand, including the Austrian Mint, which produces the Vienna Philharmonic – one of the best-selling bullion coins worldwide.
Sales of Vienna Philharmonic gold coins have gone up by more than 230% since last year.
Kerry Tattersall, the director of marketing at the mint, says production has gone into overdrive.
“We are running at present something like three shifts on all of the machines, on the presses, producing both gold and the silver bullion coins.
How gold coins are made
“We’ve actually got delays in delivering orders in silver. With gold, we are just about keeping pace, but it is a bit of a struggle.”
In September alone, the mint sold 100,000 ounces in gold coins – in normal times it would take three to four months to sell that much.
Mr Tattersall says people are looking for security.
“We are seeing a lot of panic buying at the moment. People are losing confidence in the economy – whether that is justified or unjustified is a matter of opinion. But we are seeing a lot of people looking for a safe haven.”
In the mint, chunks of gold are melted down in a fiery furnace. Then a stream of molten metal is formed into a thin strip of gold, out of which the blank coins are cut. Later the blanks are struck with the design of violins and musical instruments.
The Austrian mint, in the heart of Vienna, was founded more than 800 years ago to make coins out of the silver ransom paid for King Richard the Lionheart, who was taken prisoner in Austria on his way home from the Crusades.
It is a sign of the importance people have attached to precious metals over the centuries.
But there is no such thing as a completely safe investment.
|The Vienna Philharmonic is one of the world’s best-selling bullion coins|
Gold, like all commodities, is vulnerable to fluctuations in price.
Prices tumbled in 1999 when Gordon Brown announced a decision to sell off some of the Bank of England’s gold reserves.
Robert Stoeffele, an analyst at Austria’s Erste Bank, says until recently there was less interest in gold as an investment.
“We forgot the appeal of gold in the last 28 years because we had a bear market in gold. But within the last few years we have seen a huge fundamental bull market for gold.
“Gold is like a thermometer for the financial markets. I’d say we’ve got fever,” he said.
But rising demand for gold is not just a phenomenon of global finance.
Ordinary Austrians, shocked by the precipitous falls in their own stock market – which was suspended this week for the first time ever – are also looking for a more solid store of wealth.
The shop at the Austrian Mint usually specialises in selling collectors’ coins. But these days, a number of customers are buying bullion there – in bulk.
I saw one middle-aged couple handing over thousands of euros in cash, in exchange for dozens of 1oz Vienna Philharmonic gold coins.
A little later, a Viennese pensioner took a thick wad of 500-euro notes out of her handbag, and gave it to the sales assistant. He sold her a large gold bar, which looked as though it weighed a kilo.
“I have taken one piece of gold,” she told me.
“You see, I am old, and I have earned money all my life and now I have the money in the bank and I am afraid of the financial situation, that it will disappear. Gold is safe, I think.”
By Bethany Bell
Page last updated at 08:01 GMT, Sunday, 12 October 2008 09:01 UK
Source: BBC News