Risk-averse international investors are thought to be flying in their gold to stash it in a discreet, high-security vault near Auckland’s international airport.
Customs figures reveal an unprecedented $242 million in gold was imported to NZ in the past 12 months, as the world’s wealthy seek the security of the world’s oldest investment product.
Most came from Australia ($127m) but there was also $46m from the USA and $16m from Japan, in the 12 months to March.
Last year, in July alone, $30.2m was shipped across our borders. Then January this year topped it with a record $35.6m.
Those in the industry said there were small amounts being imported by manufacturing jewellers, but most was being brought in as an investment product, in gold bars or gold coins.
NZ Mint chief executive Simon Harding said there had been a material increase in demand for gold bullion.
Some of that might be brought back by repatriating New Zealanders – that’s not entirely impractical, given a kilogram of gold is worth NZ$80,000 but is as compact as a small cellphone. “You’d pay a bit of excess baggage, but you could probably afford it,” he laughed.
Indeed, Harding said the record $35m of gold imported in January would weigh just 435kg – that’s not much more than the weight of a big French rugby front row.
But dealers like Tony Coleman, the owner of NZ Gold Merchants, said most would be airfreighted in by investors, sometimes on chartered jets – and not necessarily by New Zealanders.
In south Auckland, near the airport, the New Zealand Bullion Depository stores gold for wealthy investors who see this country as safe and remote.
And Coleman said that the scale of the sudden increase was more likely to be explained by big shipments being sent here for storage in the depository, than by wealthy New Zealanders deciding to turn their rental properties and equities into gold. “It’s typically bullion that was sold in America, being brought to New Zealand for storage in an out-of-the-way facility. That’s becoming particularly popular.”
“Gold has been the ultimate safe haven for wealth for centuries – it may not be as trendy as cryptocurrencies but it seems it hasn’t completely lost its lustre.”
– Sharon Zollner, ANZ
Bullion Depository chief executive Michael O’Kane was discreet about his clientele, but he did say geopolitical uncertainty like China’s crackdown on Hong Kong meant there were investors looking to move their gold somewhere safe. “And we are one of the safest countries in the world so that’s why they like to hold it down here. We have Kiwis, we have Europeans, we have Americans, we have Australians.
“With the issues going on in Hong Kong – we’ll call it the transition from Hong Kong being an independent state to an extension of China – a lot of people aren’t comfortable holding their metal in Hong Kong. And Hong Kong used to be one of the larger storage facilities globally.
“There had been a move into Dubai, but now there’s a lot of people moving it out of Dubai because of Israel and Palestine kicking off. It tends to go where things are quiet and where things are stable.
“I can’t categorically say or deny that we’re a beneficiary of that, because it’s a very discreet business.
“The global movement of gold is immense, one of the biggest flows of funds in the world outside of Bitcoin at the moment. The ETFs and GLDs listed on the stock exchanges, they move gold around the world because they need to hold it in certain vaults globally. There are three or four companies globally that just specialise in moving gold.”
O’Kane suggested that the sharp upticks in January and, it is believed in April, could be in part a result of the global freight problems; that shipments backed up in overseas customs warehouses has been released for shipping to New Zealand.
In Auckland, their vault – essentially a high-security warehouse – doesn’t carry signage. “I love Ocean’s Eleven, but you watch heist movies and you think, well that’s rubbish, that’s rubbish. It starts to get a bit boring after 20 minutes,” O’Kane said.
“We’re as nondescript as we possibly can be. We don’t advertise where we’re hiding, we don’t give out any information, and we’re not open to the public for obvious reasons.”
ANZ chief economist Sharon Zollner said people were seeking the certainty of gold in uncertain times.
“Dramatically higher government debt in many countries funded by expanding money supplies has perhaps raised question marks for some about the endgame, and in particular the ultimate trustworthiness of fiat money in terms of holding its value through thick and thin,” she said.
“Gold has been the ultimate safe haven for wealth for centuries – it may not be as trendy as cryptocurrencies but it seems it hasn’t completely lost its lustre.”
