New Zealand is poised for another gold rush but it's unlikely anyone will be digging for their fortunes.
As gold prices hit record levels, it's overseas buyers with money to spare who are turning their dollars into Kiwi gold.
New Zealand Mint head bullion trader Mike O'Kane said as the world recession deepened, more people wanted to safeguard their cash and saw the precious metal as an insurance policy.
The price of gold has doubled in the past two years and last week hit an all-time high, reaching $1745 an ounce.
O'Kane said that with the failures of large US investment banks, such as Bear Stearns and Lehman Brothers, demand for New Zealand gold increased. The failures coincided with NZ Mint doing a month's worth of transactions each day.
"We've just started to see another surge in demand through fear and worry."
During the past two weeks one US buyer had bought $1 million in gold - about 570 coins - and was contracted to buy another $1m during the next fortnight.
"There's an Asian couple flying over to buy $500,000 worth," said O'Kane. "They're going to take that away with them."
There have been two other recent $1m gold transactions one by a New Zealander. NZ Mint would not reveal that buyer's identity for privacy reasons. As well, there had been five $100,000-plus gold transactions in the last month. As the gold price rose last year, there were even more big transactions 14 $100,000-plus transactions in October, and 11 in September.
Fifty-four gold coins equals $100,000 worth of gold, and stacked on top of each other they are 13.5cm high about the length of a ballpoint pen. And while $1m in notes would be the size of a pallet, the same sum of gold would fit in a shoebox.
O'Kane said New Zealand was regarded as a place where gold would be kept safe.
About half the gold bought at NZ Mint was kept there in secure storage; the rest was taken away by the owners, he said.
Not all countries manufactured gold bullion and some made it difficult to buy. NZ Mint, a privately owned company, tried to make the process as simple as possible. O'Kane said once a trader placed an order, it was confirmed within 24 hours and delivered to the client within one to four weeks.
The number of Kiwi gold buyers was also increasing. A year ago the average gold purchase was about $25,000 a time, he said. "We are seeing more and more new smaller buyers buying one or two coins at a time and some bigger purchases of around $200,000 to $300,000."
O'Kane said the drop in the NZ dollar and the ever-steady demand for gold was driving the price up.
* Fifty-four gold coins equals $100,000 worth of gold, and stacked they are 13.5cm high - about the length of a ballpoint pen.
* $1m in notes would be the size of a pallet, the same amount of gold coins would fit in a shoebox.
* NZ Mint buys refined gold from reputable suppliers throughout the world including Australia, Europe and Asia
* Once it arrives in New Zealand it is melted down and made into rough bars
* The bars are pressed repeatedly until they reach the desired coin thickness then discs are cut out and softened in an oven at temperatures of between 500 and 600degC.
* They are then "stamped" with a Kiwi on the top and map of New Zealand on the bottom of the coin
* A pure NZ Mint gold coin is the size of the old 50c piece.
* It weighs one troy-ounce = 31.1gms.
- Sunday Star Times