Inflation, uncertainty fuel new gold rush at ancient Austrian Mint

VIENNA, Dec 14 (Reuters) – The Austrian Mint, one of the world’s oldest and largest producers of gold coins, is unable to keep up with demand as people rush to find a safe haven for their money amid rising prices and the resulting economic panic. about the war in Ukraine.

“The demand for gold has never been as high as this year,” Mint Director General Gerhard Starsich told Reuters in his ornate office in the Vienna building where coins have been minted since the 1830s. Behind it is a workshop where modern machines melt metals and extract money.

“Right now, every gold coin that comes out of the press has been sold,” Starsich said. “Right now we can sell three times as much as we can produce.”

The Mint shop, located in the modern corner of the building, had a long line outside every day for months. Among those standing in line was retired Renate, one of the few willing to talk about her shopping habits.

Also Read :  The very model of a modern major economy

“I am from the older generation. Whenever things are uncertain we go back to gold coins and tell ourselves that we will always be able to sell them,” he said. “Gold has that safety factor.”

Starsich said customers were of all ages and from all walks of life. About one-third of Mint’s sales are to overseas customers.

The Mint was founded in 1194 to mint coins from the silver paid as ransom for Richard the Lionheart, after he was captured and captured by the enemy near Vienna.

Today, the Mint says the Philharmonic gold coin, named after the world famous Vienna Philharmonic Orchestra, is the best-selling gold coin in Europe and Japan.

Also Read :  Bottega Veneta Resurrects Chic

MANAGERS

Austria is a conservative country where people hoard cash and gold in times of crisis. The Mint says demand for gold is the highest since it took its current form in 1989.

The Austrian National Bank, which owns the Mint, said in a speech on Austrian household finances in October that more gold had been bought in the two and a half years since the start of the coronavirus pandemic than in the five years before.

It noted the demand for gold in the first half of this year was higher than in the first half of 2020, “despite rising prices”, indicating a rush to the asset seen as a safe haven.

“It’s a cascade,” Starsich said of the grounds. “It started with the corona crisis, and the pandemic, when people were unstable. Then in February Russia invaded Ukraine. That increased sales again. And the inflation that increased in the summer/autumn, which increased sales a little.”

Also Read :  U.S. stocks extend rally, Treasury yields dip after solid earnings, economic data

This year at the end of November the Mint had sold more than 1.8 million ounces of gold and was approaching the record of more than 2 million set in 2009 after the global financial crisis. Sales in December are usually strong as gold is a Christmas present.

Starsich added that the rush to gold is a global phenomenon seen in other major national mints. The price of gold is currently around $1,800 per ounce, short of its peak above $2,000 in March of this year and August of 2020.

He said he believes many Austrians want to include gold in their portfolios as a hedge against stocks or to diversify their portfolios. Many analysts doubt the usefulness of gold to fight inflation, however.

Reporting by Francois Murphy Editing by Alexandra Hudson

Our standards: The Thomson Reuters Trust Principles.

Source

Leave a Reply

Your email address will not be published.