You cannot make this stuff up. Even as of last summer, there were reports that gold at retail was priced at a hefty premium, often 20% or more, to professional prices. Greater convenience comes with a greater markup. The German gold vending machine reportedly update prices every few minutes and add a 30% upcharge.
The flip side is that observers who believe gold to be a good long-term bet still think a correction is overdue, given the decline in non-investment uses, meaning jewelry. Are the machines a short-term contrarian indicator?
From the Financial Times:
Germans will soon be able to sate their appetite for the yellow metal as easily as buying a chocolate bar after plans were announced on Tuesday to install gold vending machines in airports and railway stations across the country.
The venture by the TG-Gold-Super-Markt company, based near Stuttgart, aims to build on soaring retail interest…
A prototype vending machine on display in Frankfurt Airport on Tuesday appeared to be a converted version of the dispensers typically used to sell snacks. For €30 airport shoppers could buy a 1g wafer of gold, with a larger 10g bar priced on Tuesday at €245 and gold coins also on sale.
When the Financial Times bought the cheapest product it was dispensed in an oblong metal box labelled “My Golden Treasure”, with a certificate of authenticity signed by Mr Geissler but no receipt and the wrong change. Mr Geissler said he hoped to have a more advanced prototype available this month.
Gold prices from the machines – about 30 per cent higher than market prices for the cheapest product – will be updated every few minutes.
A camera on the machine monitors transactions for money laundering controls…
Interest in gold has soared during the financial crisis and Germany was last year the “star performer” in retail physical investment in gold – coins and bars – according to GFMS, the London-based precious metals consultancy. Retail demand reached an estimated 108 tonnes in 2008, up from 36 tonnes in 2007 and 28 tonnes in 2006.
Jens Willenbockel, an investment banker who saw the machine while passing through the airport, said he believed there could be a market. “Because of the crisis there is a lot of awareness of gold,” he said. “It is also a great gift for children – for them getting gold is like a fairytale.”
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Gold Vending Machines; In Germany, where I lived for two years, Gold sold by a dealer has a 25% tax imposed at the point of sale. This explains part of the 30% added added by the machine. Gold sold to a dealer, however (I was told by Commerzbank) has no tax liability.
Greg,
if you paid tax while buying gold in Germany something really strange happened.
Gold bars and coins are sold in Germany without tax; if you sell them within a year the gain gets taxed, while holding more then a year the gain is tax free.
You can check bid/ask spreads at a bullion dealers web page, take westgold.de for example. "Ankauf" translates into "buy" "Verkauf" into sale.
Somebody with serious interest in gold should buy with the small markup from a coin dealer. There might be better offers, but this website is relatively easy to understand without speaking the language.
Only silver has a sales tax (Mwst) on it; 7% for coins and 19% for bars.
Thanks, Gunther. Perhaps I'm a bit foggy or I received bad information. No loss though as I was not a buyer.
Yves, that is an imminently exportable idea: Gold vending machines. When are we going to see that at Heathrow or JFK?
contrary indicator?
The inflationists such as Jim Rogers seem to like other stuff better than gold, and the deflationists such as Bob Prechter think gold prices head down.
"Everyone" else seems to be trying to pick a top in gold, looking for contrary indicators. An ounce of gold bought a nice men's suit in 1920 and does so now.
Overpriced though it might be, its price chart is amazing. SOMEONE is buying and supporting it. I suspect it's BRIC plus "the people" who mistrust the Japanese and the US Govt's etc. to ever repay their debts.
Have they no trucks in Germany?
How do you secure such machines?
On a lighter note: this would make an awesome cartoon. Little boy tugging on mother's skirt, Mommy can I have 1,000 Euros to get a prize?
Can you sell it back to the machine?
You know, like a condom machine:
"For refund, please insert baby"
Nice one kackermann, but I'm thinking handgun and ammo vending machines, across America. All you have to do is insert drivers license or use hand print scanner and correct weight in gold coin or bar and presto conflict resolution. I'll set them right next to the gold vending machines and hit them for the tax, selling with in a year, plus 200% mark up on the gear (impulse buyers cognitive dysfunction is a marketers best friend), boooya rollin in gold soon. Umm I could call it the "Freedoom Vending Corp, Inc." (Copyright and TM solely mine) oooh I'll start with the red states to set precedence then move nation wide. If things go to plan I'll do a hostile take over of the gold vending machines company then the private prison system. I'll have a closed loop on the market just like De Beers, nations will fear me, muhahaha.
Not to worry, NC regulars get first go at limited franchises and fully armored vehicles and suits, with personal security provided by black rocks ex-military personnel aka mercenary's in the old parlance (jeez they got respectability these days, not like in mine. I always wonder if Coca Cola, Cannon, Xerox knew how many sales people they really had abroad, Yes customs officer I'm here on business, probably 6 mo or more, lots of car travel to all the convince stores across your beautiful country, briefcase with sales documents opened to retrieve passport, business card conveniently falls out of passport upon proffering).
Skippy…absolutly tingly with this thought, must work out location distribution now, hell the worse things get the better business will be, win win proposition.
So sorry every one for the above comment. I blame the DIA and one too many cups of XXX strength Costa Rican Santa Maria Dota coffee this morning, amends, it was a gibberish, especially the mercenary stuff, figments of a fractured head. I was just using it to get the image of Doc Holiday eating cereal and sitting nude in the morning sun out of my head, damm you Doc for sharing that, brekky will never be the same!
A clear (contrarian) signal that deflation is still here.
Wow- I didn't even know tht they existed.