By Susie Nordqvist
Kiwis’ love affair with property has been well documented. But with house prices in some parts of New Zealand still stagnant, is buying gold now the safer bet?
New Zealand Mint says business is booming, and for the first time it has allowed cameras in to show how investment coins are minted.
It is the beginning of a process to transform $1.5 million-worth of gold into 700 investment coins.
In this case, the gold has been purchased from a refinery in South Africa. It is heated to a molten state at New Zealand Mint before it's put into a mould and quenched in water to set. It's then rolled through a press where there's no room for complacency. Each gold belt must be exactly 38mm wide before it’s softened in preparation for stamping.
“The reason we mint a coin is to give it certification,” says Mint Master Karl Lindridge. “So those dyes we are using to stamp those coins out and give you the impression of the proud Kiwi on the front and the map of New Zealand on the back.
“Those dyes are protected and are secure in our vaults so no one else can actually copy those. And actually on the coin it has the four nines to say it's certified pure gold, so that's the certification. So when you're buying that it's recognised in New Zealand and throughout the world that it is a Kiwi coin.”
Every coin is valued at about $2300 and contains 1 ounce of 24-carat gold.
The whole process takes about five days, and in this case most of the coins have been sold to international investors and will be stored in a vault at New Zealand Mint.
“Many international investors view New Zealand as a safe-haven,” says New Zealand Mint chief executive Simon Harding. “It's politically stable; it has economic stability. So it's considered a safe bolt-hole. We have clients who very deliberately seek out New Zealand as a location to buy and store precious metal.”
That has caused New Zealand Mint's business to double in the past three years.
“Just last night we sold $2 million worth of gold to a company in Germany,” says Mr Harding.
New Zealand Mint says gold has appreciated faster than house prices in the past decade. The price of gold jumped 300 percent, whereas house prices grew by 200 percent.
But whether its golden run will continue is anyone's guess.
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