Many overseas investors are buying their gold in New Zealand because it is seen as more trustworthy. Photo / NZ Herald
Many overseas investors are buying their gold in New Zealand because it is seen as more trustworthy. Photo / NZ Herald
KEY POINTS:
Surging international prices and the weakening kiwi currency caused gold to hit a New Zealand dollar record yesterday.
The price of a one-ounce (28.3-gram) kiwi gold coin reached $1787, up more than $100 on the previous day.
New Zealand Mint bullion dealer Michael O'Kane said gold rose tomore than US$850 an ounce on Tuesday, while at the same time the kiwi dropped over a cent to around US52c.
Ever since the collapse of United States investment bank Lehman Brothers in September demand for gold had been running at unprecedented levels, he said. Gold was seen as a safe haven, and demand internationally was up 800 per cent year-on-year.
"The first month essentially when Lehman Brothers went down we were doing a month's trading [in] a day."
There was no sign of investors' desire for gold slowing.
The mint was also seeing a lot of overseas investors turn to New Zealand to buy gold, because it was perceived as a trustworthy place, he said. In contrast the US banks were not seen as safe. But unlike in other countries, it was not possible to borrow against gold in New Zealand.
And although there was plenty of the glittering stuff around, the demand had slowed production times, O'Kane said. It could take anything up to three weeks to receive the gold after ordering it.
The biggest seller in New Zealand was the gold kiwi, a one-ounce coin about the size of the old 50c piece.
The New Zealand Mint made those here, he said. It also sold gold bars bought from countries such as Switzerland and Australia.
The biggest it offered was a 1kg bar, which was not as large as people thought, O'Kane said. It was about the size of a 1cm-thick slice taken off the bottom of a block of butter.
