Be careful around that smelter.
Posted on 12/17/2008 9:08:29 AM PST by LegendHasIt
Sealed off by grey concrete walls and barbed wire, the workmen in protective glasses and steel-toed boots at this smelter cannot work fast enough to meet demand from the nervous rich for gold.
This refinery near Lake Lugano in the Alps is running day and night as people worried about recession rush to switch their assets into something that may hold its value.
"I have been in the gold business for 30 years and I have never experienced anything like this," said Bernhard Schnellmann, director for precious metal services at the refiner Argor-Heraeus, one of the world's three largest.
"Production has dramatically increased since the middle of the year. We cannot cope with demand," said Schnellman, wearing a gold watch on his wrist.
Spot gold hit a record $1,030.80 an ounce on March 17. It fell below $700 in late October, partly because investors sold their holdings to cover losses in equity and bond markets hit by the credit crisis, and is now around $830 an ounce.
The trigger for the price to rise again could come from a much weaker dollar, making gold cheaper for holders of other currencies, and a renewed aversion to paper assets as governments and central banks pump large amounts of cash into the economy, stoking inflation.
Smoke billows as the molten gold, like glowing butter, is poured. To cool it, the worker drops it into water. It hisses as it hits. Once hardened in moulds, the gold bars are embossed with the refinery's seal. Workers wearing white gloves stack them into boxes like domino pieces.
Though Switzerland is not a gold miner, it is home to some of the world's largest refineries, which process an estimated 40 percent of all newly mined gold.
Argor-Heraeus is part-owned by the Austrian Mint and a subsidiary of Germany's Commerzbank. Commercial and central banks are its chief customers and it says it processes some 350-400 tonnes of gold and 350 tonnes of silver per year.
Customers buying gold bars, which can weigh more than 10 kg each, have to wait roughly a month, taking into account the year-end holiday season.
For those buying coins or ingots, which can fit into the palm of a hand, the delay is six to eight weeks. A year ago, these small products could be had within a couple of days.
Worries about the banking system globally have boosted worldwide demand for physical gold, the Gold Council said.
"Many (people) are afraid of leaving their money in banks," said Sandra Conway, managing director at ATS Bullion in London, which sells bullion and gold coins to institutions and the retail market.
"It's difficult to quantify, but I would say our turnover over the last three months has certainly doubled compared to the previous three months," she said.
FULL CAPACITY
Other Swiss gold refiners also say business is booming.
"Since the summer we have experienced a sharp rise in demand for certain gold products. The one-kilo bar has become very popular," said Fiorenzo Arbini, in charge of health and safety at Pamp, another large Swiss refiner.
"People used to buy certificates, now they want physical gold."
Schnellmann said the Argor-Heraeus smelter is operating at full capacity, three eight-hour shifts a day. Conquering the backlog by hiring is difficult, because each candidate has to undergo a security check.
Gold refiners were established in Switzerland to supply the watch industry and, later, jewellery-makers in Italy.
Switzerland's largest banks stepped in to replace a void in gold trading while the London gold market was shut after World War Two and again during a brief closure in 1968.
The former Soviet Union, another top gold producer, chose Zurich banks to handle most of its gold sales in the 1970s and 1980s.
"Gold has an image of being the asset of last resort. This could be viewed as old-fashioned but this is how enough people with enough money to matter think," said Stephen Briggs, a metals strategist at RBS Global Banking & Markets.
GOLD TOUCH
India, China and the Middle East remain the biggest gold importers, particularly for jewellery. But demand for physical gold has exploded also in Europe, the Gold Council said.
In Switzerland, home to the world's largest private banking industry, demand for gold bars and coins shot up six-fold to 21 tonnes in the third quarter of 2008, more than in any other European country.
Retail investment in gold rose 121 percent in the third quarter of 2008, an important contributor to the overall increase in global demand, the Gold Council said.
In that period purchases of gold bars by retail investors, who often buy through commercial banks, rose nearly 60 percent, notably in Switzerland, Germany, and the United States.
There was a surge of interest among professional investors shortly after the collapse of Lehman Brothers in September.
Private bank Julius Baer in October launched a fund to invest exclusively in gold bars stored in highly secured vaults in Switzerland.
"The fascination with gold has been there since the beginning of civilisation," said Schnellmann. "It cannot be explained: you can't eat gold, you cannot build anything resistant with it and yet people want to hoard it." (Additional reporting by Pratima Desai in London; Editing by Catherine Bosley and Sara Ledwith)
Wonder what Mr. T is worth?
Precious Metals Ping list.
I still want to post my ideas of where the PM market is today, where it should be going in the next year or two, and why, but I’ve been so busy that I can’t even get my thoughts arranged coherently. Maybe I’ll get something put together by late tonight.
Be careful around that smelter.
The fascination with paper is much more recent. I suppose you can eat paper. It might provide a litte heat when burned. It's not nearly so pretty, though. No one wants to wear it.
There is absolutely zero point to having a 10kg gold bar. What are you going to buy with it?? If currency collapses gold coins will be used to buy land. A 10kg bar .. how the hell do you get change?
I pity the fool who puts his faith in fiat money.
I did this years ago and bought my gold when it was between $220 and $360 an ounce. I also bought silver at $4 to $13 an ounce and am darn glad I did it. Just in case people wise up and realize that fiat currency is actually worthless I’ll be able to buy groceries and petrol for a good long while.
Gold +18.10
Silver +.72
Yikes! When I did my "jog" on the bank back in September, I asked for more from the teller than was in the drawer so she had to go to the safe under the counter to sign out some more money, but I didn't have any real problem taking it out. It wasn't from BofA (don't have any branches around here).
I think the bigger concern isn't from the bank not having the money, but rather having too much of it after an airdrop from Helicopter Ben causing it to be worth something like a Zimbabwe Dollar.
I bought a couple of grams of certified gold bullion from ebay. Does anybody suggest a good online seller to purchase gold bullion from?
NWTMint.com has good prices however they are very late in delivery due to high demand.
Keep buying bullion folks... and enjoy watching the fed confiscated it.
Just be prepared to wait. and/or to not have much choice of what is available to buy at all.
I can also recommend a member of the ping list who is a broker, that I have been dealing with; But only if you are interested in a pretty good sized buy. PM me if you want his FReepmail name.
I bought 90 percent of the gold I have on Ebay, all in the form of gold coin that was at one time legal tender in the countries of origin. I steered clear of US coin as it carried a higher premium. Britain, France, Switzerland, Germany, Mexico, Brazil, Chile, Colombia all had beautiful coinage from pre 1930 years. Alot of the European coins are in multiples of .1867 oz of pure gold. Swiss and french 20 Francs are .1867 each, 40 franc, 50 franc on up to 100 franc which are just shy of 1oz.
I found the best dealer on Ebay was Goldberg Coin, I can highly recommend his services and product. Then again, everything I bought was in 2002-2004.
What’s the best way to buy gold?
Must be a local BofA snafu...
I have been consistently withdrawing weekly four figure amounts from my various banking institutions with no problems.
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