Run on Perth Mint as investors seek safe haven in gold
13th February 2009, 13:15 WST
US investors are increasing their holdings of gold at the Perth Mint at an unprecedented rate as they seek to preserve the value of assets.
Perth Mint’s treasurer and manager of mints depository Nigel Moffatt said the mint was seeing a continuing, but heavy bias towards investors out of the US in the past three months.
He said the value of gold held by all investors at the mint has doubled to comfortably over $2 billion in the past year, with 80 per cent from overseas.
Gold jumped to a sixth-month high yesterday on soaring demand as investor confidence in financial assets erodes and central banks spend trillions of dollars to prop up the banking system.
The US Treasury will likely borrow a record $2.5 trillion this fiscal year ending September 30, almost triple the $892 billion in notes and bonds sold in fiscal 2008, according to Goldman Sachs Group.
Singapore-based investor Jim Rogers said the world at large seemed to understand innately that governments were bankrupting themselves and destroying paper currency.
Mr Moffatt said the number of depositors at the mint had jumped 50 percent in the past year and clients come from 84 countries as diverse as Mongolia and Kyrgyzstan.
Investors can buy through certificate and depository programs where their gold is stored at the mint or they can buy coins to hold themselves.
Sales of the 1-ounce Kangaroo and other gold coins more than doubled to 199,840 ounces in the four months to the end of January from 76,792 ounces in the year-ago period, according to the mint.
Sales this month have already exceeded February 2008.
Barrick Gold chairman Peter Munk said on January 29 an unpleasant and frightening trend of investors buying gold as protection against uncertainty may push the metal over $US1000.
Gold for immediate delivery climbed to a high of $952.92 an ounce yesterday and traded at $941.40 today.
The record was $1032.70 in March.
Sales of 1-ounce American Eagle gold coins more than quadrupled in January, the US Mint said.
The Mint sold 92,000 of the coins last month, compared with 22,500 in January 2008.
Mr Moffatt said Perth Mint had been taking orders from Dutch pension funds, adding there was demand right through the spectrum, from mums and dads to a lot of superannuation funds to well-heeled investors.
“The telephone rings all day,” he said.
“What appears to be Mr Average is asking to buy $10 million of gold.
“Go back a year, and that would have been $1 million.
“We’ve become popular because not only is the gold available here but we’re in a politically stable area, tucked away from terrorist hotspots.”
The Perth Mint was founded in 1899 on the back of the State’s gold rush.
It employs about 250 people, up as much as 15 per cent from a year ago, working three shifts a day.
Formerly a branch of Britain’s Royal Mint, it is controlled by the State Government and owns a 40 per cent stake in AGR Matthey, Australia’s only major gold refiner.
Premier Colin Barnett said WA produced about 10 per cent of the world’s gold.
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