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The New Economy

Gold ATM: Why settle for cash? Withdraw gold.

Gold ATM, installed in a Florida mall Friday, lets customers buy by the gram or ounce.

By Elizabeth FullerCorrespondent / December 17, 2010

This 'Gold ATM,' photographed on May 24, was installed in Abu Dhabi's top hotel, The Emirates Palace. The German-made device monitors the price of gold and offers bars or coins at market values (plus a fee). America's first gold-dispensing vending machine was unveiled Friday morning in Boca Raton, Fla. Security measures include an armed guard and cameras both inside and outside the machine.

Splash News / Newscom / File

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Looking for something sparkly to put under the Christmas tree, but annoyed by jewelry ads? Here’s a new option: Skip the diamond stores and buy 24-carat solid gold – from a gold-plated vending machine.

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The United States is scheduled to get its first gold-dispensing machine on Friday. Though it calls itself the “Gold ATM,” the machine is not connected to your bank account, so it’s really more of a vending machine that takes cash – lots of cash – or credit or debit cards.

The machines update the price of gold every 10 minutes, to stay current with market values. They stock about 320 pieces of newly minted Credit Suisse .9999+ pure gold, in variously sized bars and coins. As of Friday morning, a one-gram flake, about the size of a fingernail, cost $45, plus packaging, certification, and a 5 percent markup. An ounce, slightly larger than a quarter, cost about $1,370.

A similar machine in Abu Dhabi has proven so popular that it gets restocked every other day.

The Gold To Go machine was invented by Thomas Geissler, a German entrepreneur. After his success in Germany and Abu Dhabi, he installed these machines in Spain, Italy, and now America. The US should get 40 more in the next year, says Mr. Geissler, but for now, the only “Gold ATM” in North America is in at the upscale Town Center Mall in Boca Raton, Fla.

Who will buy? Some will be intrigued by the novelty, Geissler says, but he’s also targeting investors weary of fluctuating markets and looking to put their money in gold, which has been selling at record-high levels recently (not in constant dollars). The popularity of gold is cyclical; its recent highs are due in part to its reputation as a hedge against inflation.

"Gold always comes back to its real value," Geissler said. "It's not diamonds, it's not silver, it's not real estate. It's just gold."

Monitor guest blogger Bill Bonner often touts gold as an investment. “Gold is stable money," Mr. Bonner wrote in a recent blog. "It’s the closest thing we have to a fixed monetary unit."

Next year, the company plans to install a few hundred Gold To Go machines worldwide. Owners of the Boca Raton machine, which will hold around $150,000 in cash and gold, say an armed guard will watch it for now, plus they have installed several live security cameras inside and outside the machine.

Dave Jones of PMX Gold, who brokered the deal to bring the machines to the US, predicts gold will become a parallel currency in the next five years.

"Gold has a place in everyone's portfolio," said Mr. Jones.

It's also an aesthetically pleasing investment, which the company cheerfully capitalizes on.

“A special "Frohes Fest" (Merry Christmas) edition of our 10g gold bar is now available at the GOLD to go ATM in...” teased Geissler via Twitter (where he uses the handle @gold_atm), adding a link to a German-language blog for the Galeries Lafayette, a French retailer with a chic Berlin store.

This story used material from the Associated Press.

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