Going for gold: How the world's mints are coining it

Russia's state-controlled Sberbank says it has never seen such strong demand for investment coins. In Australia, the Perth Mint had to suspend new orders for gold coins because it could not keep pace with overseas demand. And, in America, the US Mint says sales of its one-ounce American Eagle gold bullion coins rocketed by more than 400 per cent to 710,000 ounces in 2008. "The demand for gold and silver," said US Mint spokeswoman Carla Coolman, "has been unprecedented."

Austria's Philharmonic, named after the Vienna Philharmonic Orchestra, was the world's best-selling gold coin in the last quarter and sales soared 544 per cent in the first two months of 2009. "There is no sign of demand abating," Austrian Mint's marketing director Kerry Tattersall said. Sales this year are expected to exceed 2008's record levels. "At present, production is struggling to keep up with demand."

Hans Dieter Rauch, who sells both collectors' and investors' coins in his boutique on Graben, one of Vienna's most exclusive shopping streets, said revenues rose 300 per cent last year. "It's the man in the street, not particularly rich people but normal citizens like you and me," said Mr Rauch, 65, monitoring the fluctuating price of gold on a screen in his back room.

Gold hit a record high of $1,030.80 (£700) an ounce in March 2008 and last month rose back above $1,000. Jewellery sales by cash-strapped Americans and Europeans have helped to slow the metal's rise in recent weeks.

The Czech Republic's Komercni Banka this month added gold coins and bars to its traditional portfolio of products. Even the Central Bank of Armenia is at it, issuing 10,000 gold coins with a Zodiac signs design. And, in New Zealand, Michael O'Kane, head bullion trader at the mint, said it was averaging a month's transactions in a day.

Wealthy investors are more likely to invest in bars than coins as the premium for production costs is lower, said Wolfgang Wrzesniok-Rossbach, head of sales at the precious metals group Heraeus. "If you buy a kilo bar you have to pay the surcharge for producing the bar, which is pretty low, only once" he said. "If you buy 30 1oz coins, which would be about equal to a 1kilo bar, you have to pay 30 times that amount."

Coins have the edge for small investors who want flexibility and appreciate their aesthetic allure. Demand is for more than physical products: in the past few years, gold has been sought after for speculative gains, with interest in gold-backed funds in particular soaring. But since the financial crisis accelerated last autumn, interest in coins and bars has increased, with investors seeking security rather than profit.

Other manufacturers are reducing output and jobs, but the Royal Canadian Mint quadrupled capacity to produce its bullion gold and silver Maple Leaf coins in late 2008, and the Austrian Mint is producing in one week what it usually churns out in a month. It has extended its shifts throughout the night and weekend and recruited more workers to cope with the surge in demand.