Wary UK savers queue to buy gold Richard Wray, London
October 3, 2008
TUCKED away beside
the ornate entrance of the Savoy hotel in central London are
the discreet premises of ATS Bullion. Over the past few days,
staff have witnessed an unprecedented phenomenon: queues.
The customers are wary savers looking to build their own
solution to the global financial crisis and the parlous state
of the banking system. They are buying gold.
"There has been enormous demand," said Sandra Conway,
managing director at ATS, one of Britain's leading gold coin
and bar merchants. "There are very few sellers of physical
gold and we have actually had queues of people today."
The world's makers of gold bars and gold coins are flat out
to try to keep up with this surge in demand, but stocks are
dwindling, especially of Krugerrands.
Named after Paul Kruger, who led the Boer resistance to the
British in the 1899-1902 Boer War, the coins were first minted
in South Africa in 1967.
Although it was illegal to import them into Britain during
the 1970s and 1980s because of apartheid, they have become
one of the world's most widely circulated gold coins. But
the coins are becoming more scarce as investors snap them
As a result, the Rand Refinery is operating seven days a
week, as is the Austrian mint, which produces the popular
Vienna Philharmonic coin.
The US Mint, responsible for ensuring adequate US coinage
since 1792, has halted sales of its American Buffalo solid
24-carat gold coin because the mint was running out of supplies.
It is also limiting the availability of its 22-carat American
Canny investors had also noticed that both one-ounce coins
cost less than an ounce of gold on the open market at the
time, making them tempting to anyone wanting a quick return.
Having broken through $US1000 earlier in the year, gold has
retreated slightly and is trading at about $US880 an ounce.
But the 2007 American Eagle one-ounce coin was going for $US789.95
while the 2006 Buffalo coin cost $US800 offering the
potential for $US80-90 instant return.