Few bullion dealers are prepared to admit it, but the ghost of Goldcorp still haunts the local bullion trade.
More than 20 years after Goldcorp collapsed, some Kiwis are still wary of having a fling with the bling, while others won't trust anything that looks like a piece of paper instead of the real thing.
The public perception, which seems to have stuck, is that when the receivers opened Goldcorp's vaults in 1988, they found a huge amount of gold missing. Wild rumours quickly circulated about its flamboyant founder, Ray Smith, loading up fancy cars with gold bars.
In the book he later wrote about the saga, Where's the Gold?, Smith argued that it was in fact his bank, the BNZ, that depleted his gold stocks and at whom the 1600 investors who lost their money should direct their anger. He also suggested that it was the merger of the Auckland Coin and Bullion Exchange with a private property company that was the real reason for Goldcorp's demise.
Smith was acquitted of fraud charges but later jailed for breaches of insolvency laws, in what was undoubtedly seen by the public as some kind of utu for the company's failure.
The lawyer who defended Smith on the fraud charges, Paul Davison, QC, agrees aspects of the case are probably still misunderstood. It was demonstrated at the time that dealing in "unallocated metal" is a perfectly conventional way of gold trading that is used all around the world, says Davison.
But the head bullion dealer for New Zealand Mint, Mike O'Kane, says around 80 per cent of the company's customers still prefer to take their coins and bullion home with them.
"Even today we're buying back gold coins that Goldcorp manufactured back then, and there's never been a question about the product - it was just a question of who was holding it," he says.
"One of the primary rules of bullion is: Don't tell anyone you bought it. The other rule is: You can't get any more secure than holding it yourself. We've learnt from those sort of issues and we're trying to make sure that doesn't happen again."
O'Kane believes New Zealand Mint is probably the biggest bullion dealer in the country. Other sizeable players include Regal Castings, Morris and Watson, and Go Gold, he says.
Despite its official-sounding name, New Zealand Mint is privately owned. It started out as a jewellery manufacturer, moving into gold coins in 2002 and into bullion in 2006. The move appears to have paid off. At the start, O'Kane was only part-time but there are now four bullion dealers and the company sometimes struggles to keep up with demand.
It is a strange quirk of the bullion trade that sales tend to soar when prices are high.
"Every time it does this surge we just go through the roof. We're now doing per week what we were doing per year when I started five-and-a-half years ago. We've just come through a period where we've been doing a month's worth of transactions every two or three days."
Business has also been boosted by foreign buyers who see New Zealand as a safe haven, and O'Kane is keen to introduce 24-hour trading in the near future. "We're getting buyers coming in from the United States and Europe and Asia, and even Australia now, wanting to buy and hold here because they don't trust their own banks or trust their own government."
The company's bread and butter is commemorative coins - known in the industry as numismatics. "But in comparison to five years ago, it's just a different industry altogether. When I started, gold was at NZ$600, and we thought that was pretty good. But now we're at over NZ$2200."
According to O'Kane there is no such thing as a typical customer, although he admits there is probably a skew towards the particularly well-off. That said, it bothers him that many Kiwis don't seem to know much at all about the market, and some are taking the plunge into leveraged investments without getting any professional advice.
"It's like deciding to buy a car, and then snapping up the first Lamborghini you happen to see in a showroom somewhere because the salesman offers to lend you the money," he says.
Leveraging operates in the same way as margin trading on shares, by allowing investors to borrow money to increase the size of their investment. The theory is that by investing an even bigger sum, both the investor and the broker can make an even bigger profit if all goes well. The downside is that if the investment turns sour, the investor's losses are magnified.
New Zealand Mint does not offer leveraging, nor does it offer advice.
Bullion dealers have, in fact, been careful to avoid being classified as professional financial advisers under the new securities regime overseen by the Financial Markets Authority (FMA). While they like to stress they are not there to advise clients what to do with their money, but to simply carry out any transactions on their behalf, the Business has spoken to some investors who say this is laughable.
It is also notable that precious metals are not currently defined in the law as either securities or financial products. This means the FMA has no jurisdiction over dealers unless a scheme involves a derivative or a pooled investment, such as a managed fund. Under new legislation being considered by Parliament, however, the FMA may soon get the power to "call-in" specific investments that currently fall between the cracks.
O'Kane would welcome regulation. "The majority of the older larger traders don't actually give advice and never have, and that makes them just a brokerage," he agrees. "But if you are giving advice then my opinion is you are moving realms and you should be under the FMA.
"If you go to a company and say 'I want to buy a 1 ounce gold coin' and they tell you you should be buying a futures contract for 1 ounce of gold in another market altogether, then that's not brokering bullion, that's selling something completely different, and that should be jumped on from a great height."