EX ORIENTE TO ADD GOLD VENDING MACHINES IN MIDDLE EAST
The German-based company installed machines in Abu Dhabi and Dubai last year and plans more in Dubai, Kuwait, Saudi Arabia and Qatar this year.
Ex Oriente Lux AG plans to increase the number of its “Gold to Go” bullion vending machines located in shopping malls to airports this year as it taps rising Middle East demand. Sixty to 70 of the dispensers may be installed globally by the end this year, compared with about 40 due to be operating by the end of the second quarter, said Thomas Geissler, chief executive officer of the Reutlingen, Germany-based company. It installed machines in Abu Dhabi and Dubai last year and plans more in Dubai, Kuwait, Saudi Arabia and Qatar this year. Gold plunged 28 percent last year, the most since 1981, as some investors lost faith in the metal as a store of value. As investors sold through gold-backed funds, more bullion moved to Asian countries such as China as lower prices boosted demand. The flow to Asia may help build hubs like Dubai, an emirate that now accounts for about 25 percent of global gold trading. “The decrease in gold prices is very good for our business,” Geissler said by phone yesterday from Geneva. “We’ve found very good success in the Middle East. We are concentrating in the Middle East hub and the spread to countries with an affinity to gold.”
Bullion for immediate delivery climbed 4.7 percent to $1,262.45 an ounce in London since the start of January, rebounding from the first annual decline in 13 years. Prices that reached a six-month low of $1,182.52 on Dec. 31 compare with a record $1,921.15 set in September 2011. Gold demand in Dubai grew eightfold in the past six to 10 years, Dubai Gold & Commodities Exchange Chief Executive Officer Gary Anderson has said. The DGCX plans to list a spot gold contract this year to add to its futures offering, Anderson said in October. ETP Holdings Investors sold 869.1 metric tons last year from exchange-traded products traded mostly in the U.S. and Europe, more than was bought in the previous three years combined, data compiled by Bloomberg show. Holdings reached 1,736 tons on Jan. 28, the lowest since October 2009. Ex Oriente also has dispensers in Europe and the U.S. The machines offer gold ingots and coins ranging from 1 gram to 250 grams (8 ounces). While demand from the units has been “quite steady” since last year, turnover at the company’s online bullion brokerage TG-Gold-Super-Markt jumped fivefold to a “couple of tons” last year from 2012, Geissler said. About 90 percent of those sales went to Germany. Sales of 2 tons would be valued at almost $91 million, based on last year’s average price. Goldman Sachs Group Inc. was forecasting gold to fall to $1,050 in 12 months, as of Feb. 3. The Federal Reserve said last week it will trim monthly bond buying to $65 billion, from $75 billion, in its second $10-billion reduction amid a brightening growth outlook. “You can improve the economy as much as you want but debts are also increasing,” Geissler said. “Gold is the ultimate insurance.”
by: Claudia Carpenter /reporter:Nicholas Larkin
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