Let them mint paper: Now they're out of Krugerrands too

It must have killed Bloomberg's Claudia Carpenter to have to report this.

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World's Largest Gold Refiner Runs Out of Krugerrands

By Claudia Carpenter
Bloomberg News Service
Thursday, August 28, 2008

http://www.bloomberg.com/apps/news?p...

LONDON -- Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an "unusually large" order from a buyer in Switzerland.

The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.

Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one-ounce "American Eagle" gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery, and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.

"A lot of people are worried about the dollar, they're worried about inflation, and now we have geopolitical risk with what's happening in Russia," said Mark O'Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin. O'Byrne said his company's sales are up fourfold this year, heading for a record since its founding in 2003.

Gold rose to a record in March and is 25 percent higher than this time last year, while the dollar dropped 7.4 percent against the euro. Silver is up 15 percent in the period.

French Foreign Minister Bernard Kouchner said European Union leaders meeting in Brussels Sept. 1 will discuss sanctions against Russia after it recognized the independence of two regions of Georgia. U.K. Foreign Secretary David Miliband said yesterday Russia was trying to "redraw the map" of Europe.

Johnson Matthey's Salt Lake City refinery doesn't have the capacity to meet investor demand for 100-ounce silver bars, said spokesman Ian Godwin in London. He wouldn't comment on whether the company may expand capacity or end production.

The refinery usually gets orders for 1,000 ounce bars from banks and silver grains from jewelers, Godwin said.

Rand Refinery has manufactured, marketed, and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company's Web site. Krugerrands are minted at the South African Mint from gold coin blanks supplied by Rand Refinery.

Gold for immediate delivery rose $2.29 to $829.19 an ounce by 5:24 p.m. in London. Silver gained 10.5 cents to $13.60.

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