Kiwis Caught Up In Gold Rush

By ROB STOCK

Gold-selling fever is seeing millions of dollars of unwanted gold flowing into refiners, but the boom still doesn't rival the upturn in investors seeking gold bullion as a defence against uncertain economic times.

Last week, the Sunday Star-Times reported on the low prices people may receive for their unwanted gold when they sell it at kiosks in shopping malls, and how those wishing to cash up old gold can often find a better price at a jewellers or pawnbrokers.

But one of the refiners who buys from pawnbrokers said its trade in buying unwanted gold, either directly from the public or through a network of gold buyers, had gone from $10,000 a month 18 months ago to between $250,000 and $500,000 a month.

Tony Coleman of New Zealand Gold Merchants, which has been operating since 1975, said: "In the last 18 months it has gone from nearly no market at all to a huge market. Millions and millions of dollars a year are changing hands, but we are also seeing 10 to 20 times that in the amount of investment gold being sold."

The gold price has been high, but it is the recent surge in adverts from gold buyers that has fuelled the selling bug among the wider public. "It is really because of the advertising. The gold price was a bit lower a year ago, but there is a massive amount of people seeing easy money to be made by selling their gold," said Coleman.

NZ Gold Merchants, which also recovers silver from x-rays and photographic film, is one of the largest recyclers of gold jewellery, said Coleman.

But he said the gold-buying bonanza had a darker side, with burglars increasingly targeting gold jewellery which is often hard to identify as much of it is mass-produced, said Coleman. That's led to a police crackdown he said, which was unfortunate for one burglar who was nabbed after one enterprising victim emailed pictures of her lost items to New Zealand Gold Merchants. The firm's workers spotted the items when a man tried to sell them, and coincidentally there was a policeman there on a regular visit looking for stolen items.

Coleman said the gold-selling fever was dwarfed by the rush of some of New Zealand's wealthier citizens to buy gold as an investment, often as an insurance policy against financial meltdown. Some were concerned that the economy could collapse entirely, said Coleman. Others were afraid the government might go bust and attempt a wealth-grab.

New Zealand Gold Merchants manufactures gold bars for investors, as well as supplying jewellers, but to satisfy investor demand it is importing high-quality bars from Swiss firm Pamp, one of the world's most prestigious bullion dealers.

"We do make our own gold bars, but what we have found is that people sometimes want the ultimate surety of Swiss gold," Coleman said. Pamp is one of the world's most recognised bullion product producers with its Lady Fortuna bars instantly recognisable and accepted around the world.

One troy ounce bars currently cost about $1680 – there's no GST on gold bullion purchases – though the price changes constantly as the gold price moves in New Zealand dollars.