Bullion trader now closer to market

Press, 6 July 1983, Page 30

Bullion trader now closer to market

The proximity to West Coast gold mining operations, and the need to be closer to a growing number of South Island clients, are the reasons given by the managing director of the Auckland Coin and Bullion Exchange for his company’s decision to open premises in Christchurch.

Mr R. W. Smith says increasing interest is being taken in gold and silver investments and the business from Christchurch and other South Island clients can no longer be satisfactorily handled by the Auckland or Wellington branches. The new branch, in Manchester Street, opened this month. The company was formed only three and a half years ago but has enjoyed considerable success since. The Wellington branch was opened within eighteen months of the company’s formation.

Mr Smith sees the Christchurch operation covering the whole of the South Island, “it’s the hub after all” and having a close involvement with expanded gold mining ventures, particularly on the West Coast. For the public, the company’s buying and selling operations cover four principal areas. The first is buying and selling bullion, gold and silver. Mr Smith says that New Zealand is in a unique position with international

time zones, meaning that trading is possible virtually the whole day. “We’ll trade just so long as there is a market open somewhere in the world and that is usually 22 hours a day.

“To keep track on what is happening we subscribe to the Reuters monitoring service and at the touch of a button can see on a TV screen what is happening in any market. The company view is that to perform satisfactorily a dealer has to be truly international. Some New Zealand dealers rely on local sales but the gold and silver business is a world- wide one and we have to be part of it world wide,” Mr Smith said.

Another service offered by the company for investors is a trading facility whereby transactions are made with only a twenty per cent deposit being payable.

“Even small moves in the market can produce a profit,” Mr Smith said, “and although we obviously can’t guarantee what markets are going to do we would be disappointed if clients who follow our advice don’t make at least fifty per cent profit each year.” Mr Smith is adamant that gold and silver should not be seen as a highly speculative business by potential investors. “It need not be. The in-

formation is available to take the risk out of it. The biggest danger for shortterm speculators is in buying and forgetting about it. However for longer-term investors, the same doesn’t apply because they need not be worried about fluctuations in the market.”

For anybody not convinced the Auckland Coin and Bullion Exchange also has two other departments, numismatics, and estate and antique jewellery. Numismatics covers banknotes as well as coins and Mr Smith believes his company could well be the strongest in Australasia in this area.

“Although we deal mainly with collectors, many people regard coins and banknotes as an investment. It’s not a bad one either with values rising on aver-

age by about twenty per cent a year for many years now. It’s a good hedge against inflation, or devaluation.

“The antique and estate jewellery is a very active side of the business too, buying or selling.

“One big advantage for the customer buying is that the items don’t attract sales tax or duty. That can lead to a fifty per cent discount on a comparable new item,” Mr Smith said.

The manager of the Christchurch branch will be Mr Dean Mavros, formerly assistant manager in Auckland. Mr Geoff Brown, who ran his own coin shop in Christchurch, has also joined the staff. The question most asked of staff is: “When is gold going to pass the eight

hundred dollar market again?” It peaked at SUSB4O in early 1980 and spurred many stories of millions made for a relatively small outlay, not surprisingly as it represented a two thousand three hundred per cent increase in the price in ten years.

Mr Smith believes a new record price isn’t too far away. “We see the market weak at the moment and it may go even lower during the next month or so.” “I think it could well show better strength towards the end of the year and come 1986-87 really take off.

“I wouldn’t be at all surprised then to see it go past the one thousand SUS mark,” he said.