Internationally Recognized Gold Coin at 1.9% Premium

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Category: Global Perspectives

Published on Friday, 06 January 2012 11:34

Written by Brandon Rowe

Most of our readers are familiar with the gold Maple Leaf, Eagle, Buffalo and Krugerrand. Along with the Nugget/Roo and to a certain degree, the Panda, such coins are widely recognized around the world as a good way to hold physical metal. But there is also another coin that belongs to this group and in fact (as a Swiss contact confirmed recently), it carries one of the lowest premiums of the internationally recognized one-ounce variety: the Austrian Philharmonic.

A Little Bit of History

By Brandon Rowe, Managing Director, International Man

Austria's history as a minter of coins goes back more than 800 years to 1194 when Duke Leopold VI of Austria captured England's Richard the Lionheart on the latter's return from the Crusades. 15 tonnes of silver were demanded for the release of the English king - a truly substantial sum of the day - yet nonetheless paid.

With so much silver now on hand, it made sense to turn some of it into currency. And so, the minting began.

Over the years, the Austrian mint has released coins that have become standards of trade throughout Western Europe and overseas. The most well-known, the Maria Theresa "Taler" (first produced in 1741), has a purity of .833 and is still used in certain places today as currency.

The Gold Philharmonic itself was first minted in 1989 to be investment grade (.9999), but also legal tender. Officially, it is the only legal tender bullion coin in Europe to be produced on a large scale. Since February 2008, the Philharmonic has also been produced in silver (.999), though from an investment standpoint, buying a silver coin within the country isn't ideal due to the 20% VAT.

Gold, however, is a different story. Within Austria, it carries no tax and, at least when bought from a major supplier within the country, also offers exceptionally low premiums. On a recent visit to a bank just a few days ago, I could pick up a 1oz Philharmonic for as little as 1.9% over spot on an individual purchase. While this was an exceptional premium, a Swiss contact (who deals daily with gold prices) confirmed that the Philharmonic carries some of the lowest premiums of the major coins - generally in the range of 2-3%.

It's not uncommon, even in the hyper-competitive market of North America, to pay a premium of 4-6% for the locally minted coins. My Canadian-based preferred supplier, internationally recognized as a high-quality supplier with exceptionally low premiums, usually falls within this range.

Where to Get Them

As in Switzerland, larger branches of the major Austrian banks usually have a gold window or a coin shop within the facility itself. One of the largest, Raiffeisen Bank, has a number of branches with such shops. One can also purchase the coins from local dealers - coins shops and the occasional purveyor of antiques. However, unless you are truly experienced with the handling of coins, it is best to go straight to the banks.

It is also worth mentioning that one can generally purchase up to € 15,000 in cash without any paperwork (contrary to that rumour making the rounds a few months ago).

Once you've purchased the metal, you need a place to store it. Happily, one of the premier places in the world to do so - Das Safe - happens to be located in Vienna. It's also one of the only storage facilities in the world to allow true anonymity - not even the company director knows who you are (though of course, you still have to disclose overseas assets as required by your country's laws).

A little while back, a member of the IM team visited Das Safe and dug up all the facts you need to help determine if it's the right solution for you. As a member of International Man, just login and pick up your copy today. Or, if you are not yet a member, join us for free here.

Tags: Austria , Austrian Philharmonic , Brandon Rowe , Buffalo , Das Safe , gold coins , Krugerrand , Maple Leaf , Philharmoniker , Taler