Alex’s Notes: Had a funny thing happen to me last week.

There is currently this scam going around the internet where people are trying to buy and sell gold at a discount to the spot price.

This is really kind of funny, but because there are so many amatuers in the bullion markets who haven’t bothered studying the supply demand fundamentals and what really occurs in the bullion industry, some actually believe it (funny…there is a saying that you cannot con an honest man, but a dishonest one who wants to believe the con because its something for nothing always get caught in it).

Anyway, one of these situations pops up where this person is claiming they can buy gold in quantity and have it fabricated as well at .5% under the gold price at the Perth Mint.

I laughed.

You see, we hold contracts with the Perth Mint, among other large LBMA certified refineries.

Every refinery we know of is slammed, and their production is at capacity.

To get an actual production run, you will be on a waiting list, and you better have a pretty big order.

So anyways…my response to this nonsense was “If you can buy gold at a discount from Perth Mint or RCM, then why dont you go do it? Why are you talking to me?”.

That of course shut the person up. Gee, I wonder why.

***

Gold rush erupts over financial crisis
Article from: The Daily Telegraph
By Nick Gardner

January 10, 2009 12:01am

THE global financial crisis has sparked a new gold rush.

Worried investors seeking a safe home for their money are ploughing billions of dollars into the precious metal in a bid to preserve their wealth, The Daily Telegraph reports.

Demand has now reached such unprecedented levels that the Perth Mint, Australia’s biggest wholesaler of gold coins and bars, has been forced to ration its sales.

Perth Mint’s bullion sales rose 194 per cent in the December quarter compared with the corresponding period in 2007, while silver bullion sales were up 140 per cent.

The mint has suspended sales of all gold bars and all bullion coins – except its 1oz “Kangaroo” gold bullion coin.

On Monday, after a three-month suspension, it will expand its range of bullion coins for sale but the restrictions remain in place for minted gold bullion bars so the mint can sell some gold to as many customers as possible.

“We are working three shifts a day, six days a week, and still can’t keep up with demand,” Perth Mint CEO Ed Harbuz said. “I’ve never known anything like this in the precious metals market.

“We would be working Sundays too but we are having difficulty getting enough staff.”

Non-minted gold in the form of cast bars produced by Perth Mint’s local refinery can still be bought, although customers who want the bigger bars often have to wait several weeks.

One customer recently bought $500,000 worth of bullion and wanted it delivered so he could hold it personally.

“For very big orders we normally keep the gold in our depository for security reasons,” Mr Harbuz said.

“Orders of $10 million or more are not unusual. Often the orders are much larger if we are dealing with pension funds or institutional investors.”

Original Article

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