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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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Brexit and other risk factors drive worried investors to gold

NEWS

In investing, the definition of a ‘safe haven’ is an asset that is expected to retain its value or even increase its value in times of market stress and uncertainty

Traditionally, gold is perceived as a safe haven because in such circumstances, it often moves up in value when equities and certain currencies (known as ‘risk assets’) decline sharply.

History shows the price of gold increased significantly during the global financial crisis, topping US$1,900 per ounce in September 2011. After a short move lower, the Greek debt crisis and fears over its withdrawal from the euro-zone propelled the price of gold higher, though not quite touching the highs of a year prior.

Last week, gold was again a beneficiary as rattled investors deserted international stock markets in the wake of Britain’s unexpected vote to quit the European Union.

Institutional investors were not the only ones among the action with internet giant Google reporting that the number of searches for the phrase "buy gold" spiked by 500pc once it became apparent the ‘leave’ side was likely to win.

Reflecting the mood, calls to the Depository division here at The Perth Mint from private individuals anxious to invest funds in precious metal coins and bars were dramatically higher than average.

Uncertainty, the enemy of the markets, was compounded by the resignation of UK Prime Minister David Cameron immediately after the vote was confirmed. Fears that Greece and possibly other members of the European Union will now look to follow Britain’s lead, and that the fall-out from all this is damaging the world economy has some experts predicting gold’s rally is not yet over.

Belief in gold in times of crisis is based on the idea that it helps protect the value of money. In an example of how this works, the World Gold Council says that a U.S. family home could be purchased for $25,000 in 1971 – a sum no longer enough for a mortgage deposit at today’s prices! By contrast, 700 ounces of gold (the equivalent of US$25,000 in the 1970s) can buy a US$1 million property today.

For this reason, it advocates a diversified investment portfolio containing some gold as an insurance against global gloom-and-doom scenarios.“Our analysis shows that gold can be used in portfolios to protect global purchasing power, reduce portfolio volatility and minimise losses during periods of market shock,” it says, suggesting a modest 5 to 6 per cent allocation is optimal for investors with a well-balanced 60/40 portfolio.

With additional risk factors including the underlying strength of China’s economy and the possibility of a Trump presidency, the allure of gold will continues to strengthen in the minds of investors already fearful over the consequences of Brexit.



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‘Fractionals’ make bullion coin investing more affordable

Topics [ buy gold online gold bullion coins ]

BULLION BARS AND COINS

Bullion coins made from 1oz of gold make sense for many investors.

But there are denominations made from less than 1oz.

These coins are known as ‘fractionals’ - and they provide investors with a number of practical benefits.

Because they contain smaller amounts of precious metal, fractional coins are sold at lower price points. For those on a tight budget, they make accumulating gold bullion possible for a more modest outlay.

Some people invest in gold to protect themselves against the worse-case scenario - a total collapse in the financial system. This type of investor probably believes fractionals would be useful for barter if paper currency suddenly became worthless.

Disaster scenarios aside, the other main benefit offered by fractionals is flexibility when it comes to converting precious metal back in to cash. For example, a portfolio containing exclusively 1oz gold coins means that a minimum of 1oz must be sold – currently worth more than A$1,600.

Sellers who want to redeem smaller amounts of gold could have achieved a more suitable outcome had they diversified through a range of fractional coins.

Australian Fractional Coins

Fractional gold coins 

Fractional bullion coins made by The Perth Mint from 99.99% pure gold feature exactly the same design theme as the full 1oz sizes and each is issued as Australian legal tender.

The internationally sought-after Australian Kangaroo and Australian Lunar Gold Coin Series are struck in fractional weights of 1/2oz, 1/4oz and 1/10oz. Also available in these sizes, the Lunar Series includes a more unusual 1/20oz option.

Each fractional coin receives the same meticulous attention to detail in order to produce an exquisitely detailed product.



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Inaugural Gold Industry Group networking event at The Perth Mint

Topics [ gold market gold refining gold mining ]

GOLD INDUSTRY GROUP

The Western Australian Gold Industry Group held its inaugural industry networking event last night in the historic surroundings of The Perth Mint’s original melting house.

Addressing some 90 members, Perth Mint CEO and Gold Industry Group Chairman Richard Hayes emphasized the organisation’s value in providing a unified voice for the industry. He said not only were its activities aimed at promoting gold across Australia and beyond, but “also engaging and educating our community on the contribution and value that this industry brings to society.”


Richard Hayes addressing the Gold Industry Group’s inaugural industry networking event at The Perth Mint.

Making a significant contribution to the economy, Western Australia’s gold sector is responsible for 6% of the world’s total output. Gold Industry Group members provide opportunities throughout the entire value chain - from exploration and mining, through to refining, fabrication and distribution.

“By supporting and educating our community and building relationships, we can make a difference to ensure a strong and sustainable future for Australia’s gold industry,” Mr Hayes said.

Also in attendance at The Perth Mint venue, Minister for Mines and Petroleum, the Honourable Sean L’Estrange MLA congratulated members for their collective efforts to promote the gold industry. “Gold is a sector that is incredibly important to the State of Western Australia and it's fantastic you’ve come together as an organisation to share your experiences and ideas,” he said.



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Limited mintage Silver Kangaroo made available in Australia

Topics [ Australian Kangaroo silver bullion coins ]

BULLION BARS AND COINS

The Perth Mint is pleased to advise that 50,000 2015 Australian Kangaroo 1oz silver bullion coins out of a total mintage of 300,000 will be available for sale in Australia next month.

Manufactured from 99.9% pure silver, this release is the limited forerunner of the annual Australian Kangaroo 1oz 99.99% pure silver bullion coin, first issued in 2016. A high quality silver product competitively priced close to spot, it’s ideal for anyone seeking exposure to silver in the form of official legal tender.

 

The coin’s reverse features The Perth Mint’s iconic ‘red kangaroo’ design on a symbolic sunburst. The words AUSTRALIAN KANGAROO 2015 1oz 999 SILVER and the Mint’s ‘P’ Mintmark are inscribed in a frosted ring surrounding the main design. (Observers will note that the frosted ring and its obverse equivalent have been replaced on the first annual ‘four nines’ release with a delicate wavy-line pattern.)

Visible with the aid of a magnifying glass, the letter ‘A’ is micro-engraved within the first ‘A’ of Australia to verify the 2015 coin’s authenticity.

The Australian Kangaroo 2015 1oz silver bullion coin will shortly be available either individually, in tubes of 25 coins, or in monster boxes containing 250 coins, direct from The Perth Mint and leading Australian bullion coin dealers.

A further announcement will be issued nearer the time of release.



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‘Brexit’ fuels demand for gold

Topics [ gold market invest in gold gold bullion prices ]

NEWS

 

‘Brexit’ is shorthand for the possibility of a British exit from the European Union following a UK referendum on 23 June 2016.

Extremely close, the most recent opinion polls show the possibility of the Brexit camp coming from behind to snatch what was until recently thought to be an unlikely victory.

With worries that the 28-member EU could consequently begin to unravel, equity markets are gripped by uncertainty. In the past four days, the UK’s FTSE100 stock index has recorded losses of £100 billion.

Fuelled by fears for the British economy, some investors are turning to gold in an effort to protect their wealth. One major gold dealer in the UK has reported it is already experiencing increased sales, and is forecasting a huge rush for gold if the leave campaign is successful.

Turmoil in Europe, like the earlier possibility of Greece’s exit (Grexit), is likely to be contagious. Being an economic powerhouse, the impact of a British exit will have far greater ramifications than Greece’s prior exit threat. Among global equity markets turning sharply lower on Tuesday, the ASX lost over 2% as nervous investors dumped shares for less risky bonds and gold.

With the rhetoric heating up between the pro and anti-European campaigners in Britain this week, experts are broadly in agreement that the price of gold will climb further. Should voters confirm a Brexit in eight days time, the possibility of further slides in equities and declining world trade would only further strengthen its safe haven appeal.

If, on the other hand, those who wish to stay in the EU, led by Prime Minister David Cameron, are successful, plenty of risk factors with potential to damage world financial markets remain.

Along with other risk factors including worries about the underlying strength of China’s economy and the possibility of a Trump presidency, the allure of gold only gets brighter.

Brexit



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A brief history of gold in Australia

The discovery of gold by colonial settlers during the 19th century had a huge effect on the development of Australia. Powering an influx of new migrants and helping to shape the national character, it attracted capital and created the wealth necessary for economic progress. Having laid the foundations of the modern nation, gold continues to play a vital role in Australia’s fortunes.

Here’s our concise overview of the history of Australian gold.

1820s - Travelling beyond the confines of Sydney, European pioneers, shepherds, and surveyors start to notice gold-bearing quartz reefs.

1841 - Clergyman and geologist William Branwhite Clarke discovers gold in the Blue Mountains. Like other early finds, it is kept quiet for fear of inciting the convict population.

1851 - Alarmed by the exodus to the Californian gold rush, authorities change their attitude to Australian gold when former ‘49er’ Edward Hargraves claims to find gold near Bathurst, New South Wales. The official announcement sparks a “complete mental madness” as people rush to the diggings.

1851 - With its economy suffering, the neighbouring colony of Victoria offers a £200 prize for the discovery of gold within 200 miles of Melbourne.

1851 - Richly rewarded with major discoveries at Ballarat and Bendigo, Victoria attracts a surge of migrants from around the world in search of gold. 

1854 - Angry at the imposition of a tax in the guise of a miners’ license, gold miners at Ballarat revolt against colonial authorities during the Battle of the Eureka Stockade. Their action is seen as a key event in the development of Australian democracy.

1854 - Australia’s first gold mint, and the first branch of the Royal Mint outside England, opens in Sydney to make sovereign coins from Australian gold.

1856 - Removing fears about Australia’s ability to meet coin production standards, the Trial of the Pyx in London shows Sydney-made sovereigns contain an average 0.02% more gold than London requires.

1862 - Bushranger Frank Gardiner and his gang, including Ben Hall, carry out Australia’s largest ever gold robbery, stealing 2,700 ounces from the Gold Escort near Forbes, New South Wales. Not all the gold is recovered and to this day remains the subject of much speculation and rumour.

1867 - While working at the Sydney Mint, assayer Francis Bowyer patents a new process for refining gold. The Miller Process, which bubbles chlorine gas through raw gold, is still used to refine gold to 99.5% purity.

1869 - The largest alluvial gold nugget ever found is unearthed near the small Victorian town of Moliagul. With a gross weight of 3,523 ounces, the ‘Welcome Stranger’ is too large for the local scales!

1872 - Australia’s second branch of the Royal Mint opens in Melbourne, increasing its capacity to transform gold into sovereign coins.

1892 - Prospectors Arthur Bayley and William Ford announce Western Australia’s first big discovery of gold, 350 miles east of Perth at Coolgardie.

1893 - Their rich discovery is soon eclipsed by Irishman Paddy Hannan’s find 25 miles away. Kalgoorlie becomes home to the ‘Golden Mile’, reputedly the richest square mile on earth.

1897 - Herbert Hoover, destined to become the 31st President of the United States, arrives in Perth to take up a post as a gold mining engineer.

1899 - Western Australia’s first Premier, Sir John Forrest, successfully lobbies for permission to open the third Australian branch of the Royal Mint in Perth for sovereign production.

1903 - There is now more than 3,000 kilometres of underground workings at Kalgoorlie’s Golden Mile.   

1929 - Harold Lasseter claims to have seen a vast gold bearing deposit in central Australia. A renowned Australian legend, Lasseter’s fabled reef is yet to be found!

1931 - Britain, and hence Australia, leave the Gold Standard, a system under which banknotes had been freely convertible into gold coins. The move pre-empts the end of Australian sovereign production after 76 years.

1931 - A sensation surrounds the discovery by 17 year-old Jim Larcombe of the 1,135 ounces ‘Golden Eagle’ nugget in Western Australia.

1934 - Hints to Prospectors , an instructive pamphlet issued by Perth Mint Deputy Master Hugh Corbet, helps diggers recognize geological signs of gold.

1957 - The Perth Mint succeeds in refining gold to almost 999.999 purity, as measured by the Worshipful Company of Goldsmiths. The Royal Mint is so impressed it orders some of the gold as the benchmark for its own standards.

1970 - British jurisdiction over the last gold rush mint still operating in Australia ends on 1 July 1970 when ownership of The Perth Mint transfers to the Government of Western Australia.

1976 - The Australian Commonwealth announces that restrictions dating from World War II on the freedom of residents to own, buy and sell gold are removed.

1985 - The Commonwealth signals its support for a bullion coin program to enable Australia to break into world markets at a time when sanctions restrict sales of South Africa’s Krugerrand.

1987 - The Gold Corporation Act empowers The Perth Mint to manufacture and market gold bullion coins for issue as Australian legal tender.

1987 - Australia’s official gold bullion coin program launches internationally with the unveiling of the first Australian Nugget.

1989 - Underground mining operations at Kalgoorlie’s Golden Mile are consolidated into a single open pit mine – set to become so large it’s visible from space.

1989 - A new design theme featuring the iconic kangaroo is introduced on Australia’s most prestigious gold bullion coin series.

2012 - The Perth Mint casts the world’s largest legal tender coin from 1 tonne of 99.99% pure gold.

2014 - The Perth Mint marks the 25th anniversary of the Australian Kangaroo gold bullion coin series.



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