German firm plans gold ATMs to meet growing demand

Reuters reports that German firm plans gold ATMs to meet growing demand.

(emphasis mine) [my comment]

German firm plans gold ATMs to meet growing demand
Tue May 19, 2009 7:28pm IST

* Gold ATMs intended to whet appetite for physical gold

* Private investor inquiries doubling every six weeks

* Plan is for 500 gold ATMs in Germany, Switzerland, Austria

By Peter Starck

FRANKFURT, May 19 (Reuters) - Private investors should hold up to 15 percent of their wealth in physical gold, according to a German asset management company which plans to set up 500 "Gold-To-Go" ATMs in Germany, Switzerland and Austria this year.

A gold-dispensing automatic teller machine (ATM) was on display at Frankfurt's main railway station for a one-day marketing test on Tuesday.

A one-gram (0.0353 ounce) piece of gold, the size of a child's little fingernail and about as thin, cost 31 euros ($42.25) -- a 30 percent premium to the spot market price.

The flat rectangular piece, bearing the imprint of Belgian metals and speciality materials firm Umicore (UMI.BR), came out of the cash-only ATM in a tin box, including a certificate of authenticity.


(picture also from Reuters)

"This is more than a marketing gimmick," said Thomas Geissler, chief executive of TG-Gold-Super-Markt.de, the company planning to set up the 500 gold ATMs at a cost of 20,000 euros apiece.

"It is an appetizer for a strategic investment in precious metals. Gold is an asset everyone should have, between 5 and 15 percent of your liquid assets in physical gold," he told Reuters in an interview.

DEMAND

Private investor demand for gold is on the rise in Germany and elsewhere as a result of the financial markets crisis, which has made many investors wary of holding traditional assets such as equities, bonds or mutual funds investing in such securities.

"In absolute numbers, the demand for physical gold is still tiny in Germany," Geissler said. "But in relative terms, the growth is explosive, inquiries have been doubling every six weeks," Geissler said of the trend in recent months.

TG-Gold-Super-Mark.de's main precious metals business idea is based on online commerce.

The gold ATMs to be set up at central locations such as airports, railway stations and shopping malls are intended to gradually accustom people to the idea of investing in physical gold, Geissler said.

The ATMs will dispense 1-gram, 5-gram and 10-gram pieces of gold as well as Krugerrand gold coins. Each ATM can hold up to 1,500 pieces, he said.

The company's internet website (www.gold-super-mark.de), through which investors can purchase units between 1 gram and 1,000 grams, is updating precious metals prices every 10 minuntes.

The ATMs will be equipped with technology ensuring that the prices charged by the ATMs keep pace with those on the website.

TG-Gold-Super-Markt.de is a subsidiary of German online investment fund company INFOS GmbH founded in 1994. INFOS now manages 170 million euros worth of assets on behalf of about 5,000 customers.

My reaction: These gold ATM are part of the process of re-introducing gold as money.

1) A German asset management company plans to set up 500 "Gold-to-Go" ATMs in Germany, Switzerland and Austria this year.

2) These gold ATMs are intended to whet appetite for physical gold.

3) Private investor inquiries have been doubling every six weeks.


Conclusion: The fundamental lack of interest in gold as money going into this crisis is probably the most bullish factor gold has going for it. As major currencies collapse (dollar, pound, yen, etc...), gold will soar as it regains its status as 'cash' in the minds of people around the world.

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35 Responses to German firm plans gold ATMs to meet growing demand

  1. Jeff Burton says:

    The fundamental lack of interest in gold as money going into this crisis is probably the most bullish factor gold has going for itYes. People who read gold-oriented sites are in an information bubble. They think gold is "overbought" because they see much gold hype. 99.5% of the population never thinks about gold. I talk about finances and the economy with lots of people, but with only two does gold ever come up.

    Now for the lighter side. Denninger's voice is rising to an hysterical pitch again. His plan: stockpile paper dollars!

  2. Jimmy says:

    Jeff,

    Are you serious that Denninger recommends paper money? I don't think so.

    I have got rid of all my paper money (almost). I keep only silver and gold (and a small amount of CAD and USD for immediate needs).

  3. Anonymous says:

    I am german, and see this as a very interesting development. Especially because I suspect this project will be blocked in some way. Why? Because during the last years I noticed a very disturbing trend in a different direction. Some years ago you could easily buy small amounts (let's say up to a few hundred grams) of gold (I'm talking of coins and bars here, not jewelry) anonymously in dozends of places (for example banks) in every city. This dried up more and more, and currently I don't know a single place in my own (medium sized) city, where I can buy gold anonymously. Of course you can buy all the gold you want, but only with disclosing your identity. There is a legal requirement for disclosing your identity with large purchases, but not for purchases in the range I mentioned. I got the impression that this is not a random development, and it seems that these gold ATMs would counter that. Therefore I suspect that either the project will be blocked entirely (which may look like it "failed" somehow), or some kind of proof-of-identy for purchases will be introduced. We will see ...

  4. Jeff Burton says:

    Denninger yesterday speaking about a massive bond market dislocation: FRNs will be fine. In fact, they'll go UP in value. Gold won't tho. Beware.FRN=Federal Reserve Notes=paper money

  5. Hugo says:

    @Jeff Burton KD has a bussiness that benefits if people believes that the dollar will go up. He is lying. He has actually spammed this blog, because there were different opinions.

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    Many believe that in a few years, the USD wouldn't be worth the paper it is printed on. Unfortunately, I fully agree with it.

    We need a brain, our own brain ( instead of anyone's, line Denninger's). There are so many liars and cheater. I always try to gather as much info as possible and draw MY OWN inclusion.

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