European Negative Interest Rates Spur Gold Sales at the Austrian Mint
Austrian Mint Gold Sales Surged 215% in 2015
The Austrian Mint sold 1.3 million ounces of gold in 2015. This was up 215% from 2014 when the Austrian Mint sold 910 million ounces of gold. Austrian Mint gold sales in 2015 exceeded the combined 2015 U.S. Mint American Gold Eagle and Perth Mint gold sales.
Austrian Mint spokeswoman Andrea Lang told Bloomberg News that the Austrian Mint’s gold sales were a reaction to the negative interest rates instituted across the European Union. A common knock against gold is that it doesn’t pay interest. That complaint is neutralized when gold is compared against cash deposits, which lose money by remaining in bank accounts and are subject to potential “bail-ins” whereby depositors may lose some of their deposits if the banks where they keep their money become insolvent.
Gold was the best performing asset in the first quarter of 2016 and the Austrian Mint expects sales to remain strong through 2016. Indeed, in the first quarter of 2016, the European Central Bank announced additional stimulus and took interest rates further into negative territory. These initiatives should make gold even more attractive to cash depositors in Europe.
The Austrian Wiener Philharmonker
The bulk of the Austrian Mint’s gold sales were in the form of one ounce Vienna Philharmonic gold coins. The Vienna Philharmonic gold coin features a depiction of the Musikverein Pipe Organ on the front and an array of symphonic instruments on the back.
The Vienna Philharmonic gold coin was first introduced in 1989 in 1/4 and one ounce sizes. A 1/10 ounce version was introduced in 1991 and a 1/2 ounce version in 1994. According to the World Gold Council, the Vienna Philharmonic gold coin was the best selling gold coin in the world in the years 1992, 1995, 1996 and 2000. When all sovereign mints report final 2015 numbers, it is most likely the Vienna Philharmonic gold coin will once again be the world’s best selling gold coin.
Austrian Mint Gold Sales 2015 – 2016
Austrian Mint Sold 5.5 Times More Silver Than Gold In 2015
The Austrian mint sold 1.32 million ounces of gold and 7.3 million ounces of silver in 2015, for a silver to gold sales ratio of 5.5 to 1. In contrast, the Perth Mint sold 11,775,927 ounces of silver and 457,132 ounces of gold in 2015 for a silver to gold sales ratio of 25.76 to 1. In 2015, the U.S. Mint sold 47,000,000 one ounce American Silver Eagle coins and 626,500 one ounce American Gold Eagle coins for a silver to gold sales ratio of 75.02 to 1. The Canadian Mint has yet to report its final gold and silver figures.
The comparatively low silver to gold sales at the Austrian Mint vs. the Perth and U.S. Mints are in part due to value added tax (VAT) that is charged on the sale of silver bullion in parts of Europe. VAT is not charged on gold bullion in Europe.
About the Austrian Mint:
The Austrian Mint traces its history back to the 10th century. The Austrian Mint and it became a subsidiary of the Austrian National Bank. Prior to 1989 the Austrian Mint was called the Vienna Principal Mint despite its status as the nation’s only mint. In 1989 the mint’s name was changed to the Austrian Mint and it became a subsidiary of the Austrian National Bank. The Austrian Mint produced legal tender coins for Austria in the form of schillings until 2002 when the Euro became the national currency of Austrian. The Austrian Mint now produces Euros.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.