A German asset management company is testing specialized kiosks that sell gold to consumers.
Thomas Geissler, the chief executive of TG-Gold-Super-Markt.de, a Web site operated by the online investment fund company Infos GmbH, said it deployed the first Gold-To-Go machine at Frankfurt's main train station last month and is planning to install a second one next week at the city's airport.
Transit hubs have plenty of foot traffic and tight security, making them a good fit for the kiosks, Geissler said. However, he may also consider installing them in banks, jewelry stores, hotels and shopping malls.
The company eventually wants to deploy as many as 500 of the machines in Germany, Austria and Switzerland, he said.
Selling small pieces of gold could pique consumers' interest in buying larger amounts through TG-Gold-Super-Markt, Geissler said.
The kiosks offer one-, five- and 10-gram pieces, along with gold coins, for about $44 a gram. The price "is a 20% discount compared to gold sold elsewhere in Germany," he said, and such small sizes make the gold more of a novelty souvenir than an investment. "But it will be definitely a better hit than a bunch of flowers."
Customers can pay for their purchases with credit and debit cards and cash, though Geissler said there are limits on the amount of gold that can be bought with cash, because of anti-laundering regulations. The kiosks are not automated teller machines, and do not dispense cash.
TG-Gold-Super-Markt buys gold from Umicore Group, a Belgian materials technology company that refines precious metals.
George Milling-Stanley, a managing director of the World Gold Council, a London trade group established by the gold mining industry, said he was not aware of any other companies that have tried selling gold through kiosks.
"This is very smart way to promote the sale of gold," he said. "The way to sell gold is to get it in front of people in a train station or an airport, where they spend a lot of time waiting."
The World Gold Council reported last month that first-quarter global sales of gold climbed 36% from a year earlier, to $29.7 billion. The trade group attributed the increase to fears of inflation and ongoing financial uncertainty.
Francie Mendelsohn, the CEO of Summit Research Associates Inc., a Rockville, Md., kiosk consulting firm, agreed that TG-Gold-Super-Markt is working in uncharted terrain.
"That's a new one on me," Mendelsohn said. "It is certainly an application I have never come across. I am traveling though the Frankfurt Airport in September. Maybe I'll see it."
However, she also said that the gold merchant will need to pay attention to its pricing, because the value of the commodity fluctuates.
"This is not a stupid idea, but it is something they really have to think through, because the price of gold is going up," Mendelsohn said.
The kiosks can store up to 1,500 pieces of gold and feature an internal alarm. The machines also are connected to a local security company.
Mendelsohn said this is not the first time kiosks have been used to sell expensive products. For example, ZoomSystems of San Francisco has kiosks that sell Rosetta Stone language-learning software for about $400, Apple Inc.'s iPod devices and other pricey electronics. The company has more than 780 kiosks in airports in the United States and abroad.
Geissler said the fact that Frankfurt is Germany's financial capital makes it a good place to test the gold-dispensing kiosks. "If we achieve the product acceptance we aim at, we will deploy Gold-To-Go ATMs all over the world."