Gold rush at the Austrian Mint
2022.12.14 07:50
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Gold rush at the Austrian Mint
Budrigannews.com – One of the oldest and largest producers of gold bullion coins in the world, the Austrian Mint is unable to meet demand as people rush to find a safe haven for their money amid rising inflation and economic worries brought on by the war in Ukraine.
In his ornate office in a Vienna building where coins have been struck since the 1830s, Chief Executive Gerhard Starsich of the Mint stated to Reuters, “Demand for gold has never been as high as this year.” Behind its calm exterior lies a warren of studios where current machines dissolve metals and bang out cash.
Starsich stated, “At the moment, every gold coin that comes out of the coining press has already been sold.” At this moment we could sell three fold the number of as we can create.”
For months, there has been a long line outside The Mint’s shop, a modern building corner. Renate, a pensioner, was one of the few willing to discuss her shopping habits among those waiting in line.
I come from a more mature generation. “We always come back to gold coins and tell ourselves we’ll always be able to sell them whenever things get a little bit uncertain,” she said. Gold has that sense of security.
According to Starsich, there were customers of all ages and backgrounds. About a third of the Mint’s sales go to buyers from other countries.
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In 1194, the Mint was established to mint coins from the silver that had been paid as a ransom for Richard the Lionheart, who had been taken prisoner by enemies near Vienna.
The Vienna Philharmonic Orchestra is the inspiration for the Mint’s one-ounce Philharmonic gold coin, which is currently the most popular gold bullion coin in Europe and Japan.
In times of crisis, the population of Austria hoards gold and cash due to its fiscal conservatism. According to the Mint, demand for gold is at its highest level since it adopted its current form in 1989.
In an October presentation on Austrian household finances, the Austrian National Bank, which owns the Mint, stated that more gold had been purchased in the two and a half years since the coronavirus pandemic began than in the five years prior.
It noted that “despite rising prices,” demand for gold in the first half of this year was higher than in the first half of 2020, indicating a rush to an asset viewed as a safe haven.
Starsich described the causes as “a cascade.” It began during the pandemic and corona crisis, when people were uneasy. Then Russia invaded Ukraine in February. That once more increased sales. Then there was the summer and fall inflation, which led to a slight increase in sales.”
By the end of November this year, the Mint had sold more than 1.8 million ounces of gold, exceeding the previous record of more than 2 million, which was set in 2009 following the global financial crisis. Gold is a common present for Christmas, so sales tend to be strong in December.
Starsich added that other major national mints experienced a global gold rush. The price of one ounce of gold is currently around $1,800, far below its previous highs of more than $2,000 in March of this year and August of 2020.
He said that he thought more Austrians were trying to diversify their portfolios or use gold as a hedge against stocks. However, the ability of gold to combat inflation is questioned by many analysts.
