Please note that although I am owning physical gold, I think gold might drop in the short term, following the "single market" theory where equities, commodities and credit will drop.
Moreover, from a contrarian perspective, this are generally more signs of a top than of a buying opportunity.
Jan. 18 (Bloomberg) -- Makishi Rokugawa says he’s installing the first gold vending machines in central Tokyo so Japanese consumers can invest in “something real.”
Space International Ltd., a company started by Rokugawa with funds from selling novelty USB flash drives, is offering gold or silver to the world’s biggest vending machine market, where consumers can buy anything from drinks and candy to lingerie and fortune-telling printouts.
In a nation where deflation has cut consumer prices for 21 straight months through November, salaries are the smallest since 1990, bond yields are the world’s lowest, and the stock market is 40 percent below its December 1989 peak, “ordinary Japanese need a way to invest in something they can touch,” Rokugawa, 35, said yesterday at a media conference.
“What if you wake up one day and your money is just a piece of paper?” Rokugawa asked reporters at the $410-a-night Imperial Hotel, where he plans to place a second gold vending machine after one in his Tokyo office building. Rokugawa plans to take his business “nationwide” next year and is considering entering the Hong Kong market, he said.
The machine offered 1 gram of gold for 6,800 yen ($82.30) yesterday. Gold traded at $1,362.45 per troy ounce at 10:52 a.m. in Tokyo, or about $44 a gram. The vending machine sells the precious metal in the form of coins and ingots, with weights ranging from a gram to a quarter of an ounce.
Japan has a vending machine for every 32 people, according to Bloomberg calculations. The nation posted 5.15 trillion yen in vending machine sales in 2009, about 45 percent more than the $42.9 billion revenue in the U.S., according to the Japan Vending Machine Manufacturers Association.
Germany’s Ex Oriente Lux AG, which says it was the first to install a gold-vending machine, operates 11 machines domestically and five abroad, including in Spain and Italy. TG- Gold-Super-Markt in June 2009 installed its first gold bar vending machine at Frankfurt airport, while a similar machine was unveiled at Abu Dhabi’s Emirates Palace hotel in May 2010.
The most expensive item available in Rokugawa’s machine yesterday was a quarter-ounce gold coin issued by the Canadian central bank, retailing for about $410. Rokugawa declined to say how much gold will be kept in the machine at any one time.
Prices will be updated once a day and relate to the gold market price, Rokugawa said. Gold for immediate delivery has gained in each of the last 10 years, rising 30 percent in 2010. The metal’s biggest one-day jump in the last 12 months was 3.3 percent and the biggest decline was 4.1 percent.
Silver coins will range from 15.5 grams to 62.2 grams, or 2 troy ounces, in weight, according to the company’s catalog distributed at the opening event. Precious metal coins from the central banks of China, Australia, and Canada will be on offer, the catalog showed.
Rokugawa may expand the business to platinum and other precious metals in time, he said. The entrepreneur said he was encouraged by the gold-vending business in Europe, which has seen client numbers climb since introduction in 2009.
Ex Oriente Lux, which makes bullion vending machines under the “Gold to Go” brand, said in September it plans to more than triple the number of the devices in operation. The Reutlingen, Germany-based company sells gold bars and coins weighing from 250 grams (8.8 ounces) to as little as 1 gram and updates the price of bullion every 10 minutes.
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