Nigel Moffatt

Not able to make forecasts about the future outlook for the gold price, Perth Mint Treasurer and Manager Nigel Moffatt is happy to speak about the very recent past.

'By last summer gold prices had snowballed upwards on the back of a stock market lull and low interest rates. New York investment funds added to the weight of money going into gold. Then as in any investment cycle there was a period of profit taking,' he told AME Info from his office perched high above the Perth Mint in Australia.

'But the main drivers of interest in gold investment remain the same: George Bush and his geopolitics and the weakening US dollar. Investors want protection and even the man-in-the-street is starting to worry about the US dollar. The implications for gold look positive particularly as the yen carry trade continues to unwind.'

The Perth Mint is well known to investors who use the Internet as it advertises extensively through Google searches which occasionally pop up on AME Info. Founded in 1899 and owned by the British Government until 1970, the Mint also offers one of the safest and cheapest ways to become an investor in physical gold.

'We realised a few years ago that investors wanted a secure method of holding physical gold without having to take actual delivery. Gold is a heavy metal and the security implications of owning it are obvious,' explains Moffatt.

'So we created the Perth Mint Depositary with two schemes depending on the amount invested. For investment of more than $250,000 we charge no commission on precious metal sales.

'Plus there is also a choice between unallocated and allocated precious metals. The unallocated metals attract no storage charge because this is the metal that we use in our own extensive minting processes. But at any time an investor can call us and convert into allocated bullion which then attracts a 1.5 per cent storage charge.'

Thus the Perth Mint Depositary provides a very low cost way to hold physical gold, silver and platinum, and currently holds some $1bn worth of precious metals for around 7,000 clients. The Mint is also AAA-rated and 100 per cent owned by the State Government of Western Australia. It is essentially a state-owned private gold-banking service.

'Our investors generally like gold as an asset class, Australia as a safe location and the sovereign guarantee. We say we are Secure, Affordable, Flexible and Exclusive, or safe for short. I face a $25,000 fine or a year in prison if client information is revealed.

'We naturally carry out the usual background checks and require funds to come from an approved bank, and they will only be returned to the same source. For investors investing less than $250,000 we charge two per cent for our Perth Mint Certificate Program, mainly because this is sold through approved dealers in the US and our margin is so low.'

Moffatt says the strong interest in gold investment from Arabia has been noted in Perth but confidentiality rules prevent him from saying anything more than that, and he hopes to be visiting Dubai in the near future.

See also:
Executive Views - Philip Olden, World Gold Council
Gold still glitters
Gold to rise 10 per cent in 2007
A golden opportunity