Monday, May 25, 2009
Friday, March 27, 2009
Gold in line for a run
March 26, 2009
Johannesburg - Gold is poised for a decisive move upwards, the SA Gold Coin Exchange (SAGCE) said in a statement on Thursday.
The SAGCE said the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund had identified a chart pattern showing that gold's short-term downtrend was about to clash with its intermediate-term uptrend.
The clash pointed to a decisive near-term price move - either up or down.
"We’ve noticed a similar picture on our charts," said Alan Demby, executive chairman of the SAGCE.
He added that it was his prediction that the gold price would move up.
Several factors, he said, prompted such a decision.
Demby said there had been an unprecedented surge in demand for gold coins, which had resulted in the US Mint having had to stop producing its 2009 American Gold Eagle coin for collectors, reflecting determined global buying.
Demby said that as a proven inflation hedge, gold was starting to offer itself as a safe haven from the trillions of fiat dollars that had been created by the world's leading central banks. - Sapa
Monday, February 23, 2009
Investors pile into gold coins
Investors pile into gold coins
Johannesburg - Aware that gold is the ultimate store of value, concerned South Africans are piling into Krugerrands and Nelson Mandela gold medallions, the SA Gold Coin Exchange said on Friday.
"On the back of global financial turmoil, the ever-popular Krugerrand has soared through the R10 000 mark, handsomely rewarding investors who several months back anticipated the global financial turmoil that has driven the rand price of the yellow metal into orbit," Alan Demby, executive chairperson of the SA Gold Coin Exchange said in a statement.
Technically, the surge could be directly ascribed to a combination of an advancing dollar gold price and a weakening rand.
"Based on current demand levels, the SA Gold Coin Exchange's sales have been running at levels in excess of R100m a month.
"We have accordingly increased our 2009 sales target to an admittedly conservative R1bn," said Demby.
Reord stock market lows were translating into record highs for gold and Krugerrands, and Demby suggested that in the last six months, a large number of investors had switched from equities into gold coins.
"The smart money has carefully digested the fact that in the past six months the JSE all-share index has slumped by 30%, while the price of a Krugerrand has soared by 64% over the same period," he said.
Demby said it had to be remembered that the all-share was somewhat buffered by "a firm gold share index".
He said that British media had been carrying reports on the flight from cash to gold in the wake of concern over the safety of the banking system.
"Here the concern is more over the value of the currency than the banking system.
"Even so, widespread uncertainty is prompting investors the world over to accumulate gold as the only tried and tested safe haven."
Looking ahead, he predicted ongoing Krugerrand strength.
"Prospective investors in Krugerrands have not missed the boat.
"As the global financial crisis deepens, as it is surely bound to do, gold bullion will continue to advance," he said.
At the same time, South Africa's inflation differential and the risk perceptions attaching to emerging market economies would likely witness ongoing rand weakness, Demby said.
- Sapa
Friday, February 13, 2009
Tuesday, February 10, 2009
What Value Has A Mandela Collectible Coin?
What Value Has A Mandela Collectible Coin?
By: Erin-And-Isabel
Friday, 8 February 2008
As I was leaving the recently renamed Oliver Tambo airport in Johannesburg last month, I couldn t help noticing an advert for a new gold coin. Now
we re familiar with South Africa s gold Krugerrand. Allegedly it is one of the top 300 brands in the world. Krugerrands were the first 1oz gold coin to
be produced - but that was back in 1967. Of course, the Krugerrand has the head of President Paul Kruger on one side, and a leaping springbok on the
other.
But this coin, which was advertised all over the airport I might add, was not a Krugerrand.
A lot has happened in South Africa since 1967, not least the release of Nelson Mandela from prison in 1990. Now some would say Mr Mandela s
release was down to the vision of South Africa s then white Afrikaans president, FW de Klerk. Others would disagree, arguing that Mr De Klerk s
actions were not visionary but necessary. Personal opinions aside, the two men were jointly awarded the Nobel Peace Prize in 1993 for their
contribution to democracy in South Africa.
Mandela coins certainly generate interest
This brings me to the shiny gold coin advertised at OT airport. It is called the Mandela/De Klerk medallion and is a oz 24 carat gold coin that is part of
the Nobel Peace prize commemorative medallion programme.
Needless to say, one side sports the head of the iconic Nelson Rohlilala Mandela with the inscription "A long walk to Freedom." The other depicts
that of Frederik Willem De Klerk and is inscribed with the words "To bring justice to everybody". The good news is the coin, which was minted in
Norway, has been given the nod of approval by the Nobel Institute and the Nelson Mandela Foundation.
This 1oz gold coin and variations on the Mandela theme are now actively marketed by the South African Gold Coin Exchange. There are other
Mandela coin productions too, in varying weights, but no pure De Klerk medallions! Just for the record, the Exchange is currently South Africa s
biggest distributor of gold investment, bullion and collectable coins. And its current chairman Alan Demby has strong views on coin collecting.
Well, surprise surprise, the cynics ( Erin included!) among you might say. "Be careful with coins," Erin says. "Many of them are a rip-off, bearing little
relationship to gold, and have large spreads in the buy/sell price so that getting in and getting out is not that profitable!"
But Mr Demby claims to have a close eye on who is buying gold coins. In his view smart investors have 10 to 20% of their investment portfolio in
coins. Around 70% of that should be in Krugerrands or sovereigns, the remaining 30% in collectible coins (coins that are of interest to collectors
rather than gold bugs). Mr Demby also says that there has been huge interest from around the world in the 1oz Mandela commemorative coins. They
currently sell for around $2,500 (edit jb)
It goes without saying that this is not the first time that Mandela s head has appeared on a coin. The Presidential Inauguration Medallion was minted
in South Africa in May 1994 and has become pretty sought after by coin collectors, according to Mr Demby.
But not one is a winner...
So does a Mandela image on a coin always equate with financial rewards? The seemingly obvious answer is that all coins sporting a Mandela bust will
become increasingly valuable with time. After all this is an iconic man revered as one of history s most extraordinary men. Right?
Well, one South African coin dealer had a fine old time spinning this yarn. It put out a statement claiming that "all legal tender coins with a Mandela
theme have shown the highest rates of financial performance in the shortest period of time". Back in 2006 this dealer started a marketing campaign for
the Mandela ZAR inauguration coins. An advertisement on its website claimed that one of these coins had sold for a staggering R100,000 ($15,000)!
That equates with a1.9m percentage rise in value in just six years!
What the advert didn t say was that this happened to be a proof coin rather than a coin you might find in your purse. A proof coin is an early sample
of a coin issue - this used to be done to check things like dyes but now more are struck for the purposes of coin collectors (otherwise known as
numismatists). You will never find a proof coin in circulation.
Predictably this dealer was rapped over the knuckles for a misleading advertising. The man on the street might be led to believe that any old coin with
Mandela s smiling face on it might sell for ZAR 100,000. And that is simply not true.
According to figures from the SA Mint in 2000 5.2 million Mandela ZAR5 coins were issued. At the end of 2003, due to a shortage of the coins, a
further 1.024 million Mandela coins were struck. But only a few thousand were sold as "proofs"
If the law that rarity makes a coin a "collectible" applies, then the circulating Mandela coins have no great intrinsic value. But that hasn t stopped
many people hanging on to them.
There is a simple rule to apply when buying collectible coins. The fewer there are, the rarer they are - and the more likely they are to appreciate. Add to
that the face of one of the world s most iconic men and there is a chance of a winning formula.
If this floats your boat, the limited edition Nobel Prestige Set with two 1oz gold coins and one 1oz silver coin may be for you. Only 1500 have been
minted around the world, so these are considered to be scarce Mandela coins. This set is currently selling for 42,000 (+/-$4,300)(edit jb).
Happy collecting,
Erin and Isabel
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