Author: Glenda Kwek, SMH
With gold soaring to a record price of more than $1800 an ounce, the question is: where do you buy it?
Soon it could be as simple as buying a soft drink … from a vending machine.
Trees don’t grow till heaven. I think buyers need to be beware. We are in a ‘caveat emptor’ market
Gold prices have shot up 30 per cent this year, with analysts predicting the price of an ounce could rise to $US2400 by next year, Reuters reported.
Now a German company, Ex Oriente Lux AG, is hoping to bring vending machines – which dispense gold bars and coins from as small as one gram to as large as 250 grams – to Australia, after launching the machines in Britain, Italy, the United Arab Emirates, the US and Germany.
A spokesman for the company told smh.com.au it was in negotiations with potential partners across the world, including Australia, to bring the “Gold to go” self-service machines to their shopping centres, hotels and even airports.
Jon Breixler from Ex Oriente Lux AG said the vending machines would value the coins and bars according to the latest gold spot price, which would be updated every minute.
“‘Gold to go’ requires a minimum of space and no sales staff … we are able to offer at very competitive prices,” he said.
Isn’t the company fearful that such vending machines will be a magnet for ramraiders?
Mr Breixler says not. He said that, while he could not go into too much detail, the machines were built by a leading manufacturer of ATMs and had the “highest security standards”, including “several locking systems, both electronic and manual, tamper-proof cash boxes, as well as molybdenum steel casings”.
The gold, sourced from renowned producers and mints such as Heraeus, Umicore or UBS could be resold and came with a 10-day money-back guarantee, he added.
The World Gold Council has predicted the price of gold would continue to remain high this year, buoyed by demand from China and India, Agence France-Presse reported.
Australia’s biggest goldminer, Newcrest Mining, posted a record full-year profit last week, crediting increased gold sales, higher gold prices and the successful integration of mines it acquired last year.
OZ Minerals, owner of the Prominent Hill copper and goldmine in South Australia, also reported last week a record operating cash flow of $388.3 million in the June half, which it said was driven by the growth in prices of the two metals.
Perth Mint, one of the leading sellers of physical gold in Australia, said it experienced a spike in sales in July, compared with the same month last year, driven by increased demand in Europe amid the debt crisis.
Alexandra Lucchesi, a spokeswoman for the organisation, said Perth Mint sold 458,879 ounces of gold coins and bars from July 2010 to July 2011. She added that, between May and July this year, 50 per cent of Perth Mint’s gold coin and bar sales came from its North American market.
But some analysts said the rising price of gold could not be sustained and the precious metal’s value was a “classic symptom of a bubble”.
“Trees don’t grow till heaven. I think buyers need to be beware. We are in a ‘caveat emptor‘ market,” Jeffrey Rhodes, the head of precious metals at the Fortune 500 brokerage INTL FCStone, told reporters at a gold conference in India on Saturday, Reuters reported.
Caveat emptor translates to “let the buyer beware” in Latin.
“My problem is that people are buying gold and they don’t understand why they are buying gold and that’s a big problem and that is a classic symptom of a bubble,” he said.
Another analyst said gold was “inversely correlated with fear and nothing else”.
“When stocks are down, gold’s up,” Frank McGhee, the lead precious metals trader at Integrated Brokerage Services LLC, told AFP.