About Perth Mint Bullion Blog

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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Who Buys Precious Metal?

Topics [ buy gold coins gold coins buy platinum gold bullion gold bars bullion coins gold gold bullion coins gold bullion bars bullion buy silver buy gold bullion bars buy silver coins ]

PRECIOUS METAL SERIES - 3

In the Western world, gold was once almost exclusively the domain of royalty, the super-rich, professional traders and a group of ‘gold bugs’ - mavericks who for one reason or another distrusted the use of paper currency.

Two decades ago, few ‘ordinary’ people perceived much reason to invest in gold. In truth, they probably didn’t even know how to go about buying it.

But things have changed.

For many, the Global Financial Crisis was a game-changer. Generally unforeseen by economists, it threatened the collapse of large financial institutions, sent assets tumbling and rocked investor confidence.

In the midst of the turmoil, people from all walks of life came to appreciate the traditional view of gold as a ‘safe haven’ in times of crisis. As prices rose, even ‘mum and dad’ investors took the plunge – and if not with gold, then with silver, which can provide many of the same benefits associated with the yellow metal.

While it is not yet fair to say gold has gone ‘mainstream’, the average man on the street is now much better informed about gold ownership and the conviction that it is a valuable component of a ‘balanced’ investment portfolio.

Today, interest in gold coins and bars remains elevated in comparison to pre-GFC times. But here’s a thing – the attitude towards gold in the West still pales in comparison to the obsession for gold in Eastern cultures!



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The Wonder of Gold

Topics [ gold bullion ]

PRECIOUS METAL SERIES - 1

Gold is a chemical element (Au) that occurs naturally in the universe. Science tells us that it is produced under extreme pressure found in supernovas.

These stellar explosions blasted gold particles into space where they eventually condensed with the gases and rocks that created our own solar system. Most of Earth’s gold sank to its core while the planet was still molten – where it remains beyond the reach of man. 

Gold mined near the surface was probably deposited later by asteroid bombardment.

The total amount of gold recovered since the beginning of civilization is estimated at less than 175,000 tonnes. That amount would fit into a cube measuring just 20.7 metres on each side!

Although some of it has been lost at the bottom of the ocean, every ounce mined still exists today. That’s because gold is chemically inert - resistant to corrosion and oxidation, and virtually impossible to destroy.

A heavy, dense metal, gold is also soft and extremely malleable. Did you know that an ounce of gold can be beaten into a sheet covering nearly 30 square metres and drawn into a thread more than 80 kilometres long?

The Wonder of Gold



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Picture This: All The World’s Gold!

Topics [ gold bars invest in gold gold gold bullion prices bullion ]

RESEARCH & ANALYSIS

A gold mine of information for all to share.

All The World's Gold


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Road To Roota Wrong On Perth Mint Unallocated

Topics [ depository services certificates bullion ]

TREASURY VIEW

Bix Weir’s recent article SILVER: What Happens When… gets it wrong when he says that The Perth Mint’s Depository “customers cannot convert” to physical and “cash settlement may be the only option”.

Bix’s misunderstanding stems from taking the comments of the Mint’s Treasurer out of context and assuming that the statement “cannot meet all the enquiries” was about all enquiries across the diverse business units of the Mint. I can confirm that the Treasurer’s comments were only in respect of the wholesale market and not in reference to retail or Depository demand.

Usually the context or target of these sorts of newswire articles is the wholesale market. This is alluded to in the quote “the biggest demand is coming from banks and traders looking for kilo bars” but to be fair to Bix this is probably not clear, especially after journalists edit a full interview down into catchy quotes.

In actuality, the fact that the Mint cannot meet all wholesale enquiries is proof that Depository clients are protected and safe, contrary to Bix’s conclusion. The Perth Mint understands its obligations to its Depository clients and its policy is to prioritise unallocated conversions to allocated or delivery. It is only after fulfilling Depository conversion/delivery requests from its stockpiles and approximately 300 tonnes per year of new mine production that the Mint’s Treasurer will offer what is left to the wholesale market (that is, the bullion banks).

If you think about it, prioritising Depository and retail bullion sales demand is not some ethical decision but perfect commercial sense – why supply to wholesalers at lower fabrication premiums when your retail premiums are higher?

The Treasurer’s statement that “demand for our coins and medallions is strong” is alluding to our Depository and retail bullion trading demand. Since this is strong, supplies to the wholesale market are restricted and hence we are unable to “meet all the enquiries” of the bullion banks.

There are also a few other incorrect statements in the article that need clarifying.

BIX: “runs quite a large paper gold and silver operation with their unallocated pooled accounts and metal leasing operations”

Bix’s reference to “metal leasing operations” is totally without basis. If he had read a few more paragraphs down from his own quote from our website he would have found the following:

“The Perth Mint is not a bullion bank and does not provide project financing or bullion lending/derivative services to mining companies or other entities.  It does not lend client's unallocated metal to support short selling transactions or other derivative activities.  The unallocated metal is utilised solely to fund the Mint's operations.”

Can’t get any clearer than that. Furthermore, if he looked at our latest annual report, we disclose ZERO outward precious metal leases (loans).

BIX: “The business model is massively flawed because the offering entity doesn't even charge enough to cover obvious expenses like insuring metal, storing physical metal, tracking, collecting, administration”

I’m assuming Bix is referring to Unallocated here, because Allocated  storage has a 1.5% pa charge that I think anyone would be hard pressed to claim is too low. However, Bix says “charge enough”, which is a little confusing because we don’t charge ANYTHING for Unallocated storage. This is not a massively flawed business model as he claims. In fact if we did charge a fee on Unallocated for insurance and storage it would be double dipping!

This is because the costs Bix refers to are costs associated with production of our coins and bars and as a result are covered by our fabrication premiums. Before the Depository business existed we incurred these costs and customers buying our coins and bars “paid” for these costs via our fabrication premiums. Nothing has changed just because our physical operational metal is now owned by our Depository clients rather than bullion banks as it was in the past. To then claim that we need to charge Unallocated clients a fee because we have storage and insurance costs, when those costs have always been and still are covered by fabrication premiums could possibly be considered deceptive.

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Gold Is Money, Not A Relic

Topics [ gold investing gold bullion ]

WHAT OTHERS ARE THINKING

In a final clip from the investment seminar at this year’s ANDA Sydney coin show, the case is made that gold has resurrected itself as the only true money as currencies worldwide are being debased in efforts to stimulate growth. According to the presenter from Australian precious metal dealer Bullionmark, however, banks and governments don’t want you to think gold is money!

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What Animal Would You Like To See On Australia’s Next Bullion Coin?

Topics [ bullion coins bullion ]

BULLION BARS AND COINS

What other animal symbol of Australia would you like to see portrayed on a bullion coin for international investors?

The Perth Mint already depicts kangaroos, koalas and kookaburras on its bullion coins – each one an internationally recognised emblem.

Thanks to our unique animal kingdom, however, there are plenty of other potential candidates. Our Coat of Arms and circulating coinage provide a few interesting examples.

Please drop us your ideas on which animal could best represent Australia on a future bullion coin series from The Perth Mint.

We’d love to know your thoughts.

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