ATMs that Sell Gold Bars – Beyond Ridiculous

by Darwin on September 27, 2010

Where there’s a will, there’s a way, no matter how stupid the proposition.  I couldn’t help but start running through all the problems this situation is going to create, but according to Reuters you’ll soon see an ATM spitting out gold bars coming to a mall near you.  If this doesn’t spell “Bubble”, I don’t know what does.

Apparently, a German company will be using the “Gold to Go” brand and set up a few hundred units in the US next year.  I’m sorry, but when I think of something to go, I think of a spur of the moment splurge or food item like coffee, donuts or a newspaper.  I don’t think of an asset class.  This convenience factor will likely further inflate a possible growing bubble and have many retail consumers/investors buying into an asset class they don’t fully understand – and possibly at much inflated prices.

The company claims that the machines will update their pricing based on the gold spot price every 10 minutes, but no mention of what the actual markup will be.  Also, since gold is treated as a collectible and must be taxed as such, it will be interesting to see how these taxable transactions are handled.  And if you thought robbing an ATM of $20 bills was profitable…

Disclosure: I do have a slight long position in gold via the ETF GLD since I can’t help but notice the devaluation of all western currencies.  If you’re considering buying gold, watch out for markups, tax problems and other considerations – see more on gold investing basics.

{ 13 comments… read them below or add one }

Khaleef @ KNS Financial September 27, 2010 at 8:47 pm

This is going to spell disaster, and I can’t believe that someone thought this through. I agree with your assessment of people jumping into an investment that they have little to no understanding of. People want to limit the number of McDonald’s in certain cities because they don’t think people are smart enough to choose their own meals, but they are ok with having gold ATM’s in the mall?


Darwin September 28, 2010 at 6:30 pm

These days, who knows? Local municipalities may love it since their ethics and concerns disappear when tax revenue is involved. (legalizing pot in CA, lotteries, etc). If they can tax the transactions, there may be little resistance.


ParatrooperJJ September 28, 2010 at 2:41 pm

I am sure it will print a receipt which will be fine for tax purposes when the gold is sold. Also it seems to be a perfect way to turn stolen credit cards into cash. It would also seem to be a money launderer’s dream machine.


Darwin September 28, 2010 at 6:28 pm

Money laundering – hadn’t even thought of that angle! I guess it depends on the markup as to how much they’ll lost each transaction.


Invest It Wisely September 28, 2010 at 4:19 pm

“Also, since gold is treated as a collectible and must be taxed as such”

That is dumb. There is no sales tax on gold bullion in Canada.

It could be a bubble, but it could also be shifting supply & demand. The problem with trendlines is that they measure the PAST; the future could easily be different.


Invest It Wisely September 28, 2010 at 4:21 pm

Hehe, everything is ending up in vending machines these days. I know there’s a hot fries to go machine near my work… I wonder how secure the gold ATMs will be? Since each could could have up to $10,000 or more, I’d hope they’d be pretty secure…


Darwin September 28, 2010 at 6:29 pm

This article isn’t about Canada. US. And in the US, there is such a tax levied on gold.

I made no mention of trendlines in my article either.


Invest It Wisely September 28, 2010 at 7:27 pm

My apologies; I did not direct my comment toward you personally, Darwin. I was commenting on the fact that gold is taxed and on the general commentary on if it is in a bubble or not.


Investor Junkie September 28, 2010 at 10:36 pm

Let’s go to Canada to sell our gold!


Invest It Wisely September 28, 2010 at 9:00 pm

My apologies, Darwin. My comment was not at all directed toward you.

I am referring to the taxation policy, and re: the bubble about the commentary I’ve heard in general.

I should be more careful with the words I use!


Darwin September 28, 2010 at 9:33 pm

Oh, that’s so funny; no I apologize. I was like “he just called me stupid?”. hahaha. You’re right though, the tax IS stupid, as are many.


Invest It Wisely September 29, 2010 at 10:05 am

Haha 😉 Gotta be careful with the words one uses on the Internet.

Silver & platinum are also not taxed, but you do have to pay sales taxes on palladium and rhodium…


Dividend Monk October 1, 2010 at 4:12 pm

Gold vending machines sounds like something out of a satire or mockumentary.


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