Swiss Riffs on the Gold Bar, from Hello Kitty to Snoopy

Brand-conscious Swiss refiners try to spice up the market

The Swiss are turning gold ingots and coins into a consumer product. PAMP, one of the top refiners in Switzerland, has started providing retailers with whimsical riffs on the gold bar theme.

They’re not like the 400-ounce bars that sit in bank vaults for decades. They’re more like designer gold, devised to appear to popular taste. PAMP’s small ingots now come stamped with Hello Kitty for the Korean market, many-armed goddesses for India, and Snoopy for the U.S. The latest product is for Paris retailer CPoR, a 1-oz bar featuring a heart motif drawn by Jean Paul Gaultier, better known for dressing pop stars Kylie Minogue and Madonna. “Gold is becoming mainstream,’’ says Mehdi Barkhordar, PAMP’s managing director. “These retail products bring 10 percent of our sales but 30 percent of our profits.”

PAMP needs those profits. Sixty percent of the world’s refined gold comes from four companies in Switzerland. And it’s likely to go on being produced there, thanks to the great lengths the Swiss go to prevent adulteration of their gold. The world’s biggest bullion exchange in London relies exclusively on the Swiss for purity in the 400-oz bars they deal in.

Production is running flat out as customers demand gold to preserve their wealth in uncertain times. Yet the strong Swiss franc has pushed up production costs compared with rivals in cheaper countries. The franc is “a disaster,” says Bernhard Schnellmann, director of precious metals for refiner Argor-Heraeus.

The Swiss can’t move to less expensive sites. “We contemplated capacity outside the country but decided to keep the refinery here because it’s safer,” says Schnellmann. “Switzerland is the only country that has a law for precious metals.” Every refinery must have in-house assayers, responsible for purity controls and employed by the state.

“You can’t put a value on that,” says PAMP’s Barkhordar. “In our industry, reputation is everything. It’s priceless.” PAMP’s flagship product, the Fortuna bar stamped with the likeness of the Roman luck goddess and accounting for half of all company sales, can’t be made anywhere else, he explains. The refiners know their reputations depend on keeping adulterated gold out of their bars, and fraud in the market keeps them hyper-alert. A 2006 survey by the Bureau of Indian Standards, a state agency, found 90 percent of gold jewelry samples mixed with other metals.

Counterfeit bullion—gold bars or ingots—is rarer. In December 2007, at least seven officials from Ethiopia’s central bank and mining ministry were arrested after bars bought by the bank were found to be painted steel and stone. A few years ago, a German refinery operated by Heraeus sliced one suspect 500-gram bar in two. The center was tungsten. In 2010, Switzerland’s Precious Metal Control bureau searched 12,000 consignments entering or leaving the country. A third contained false or adulterated metals, including fake gold watches and jewelry made with adulterated gold. The Swiss destroyed 4,300 watches and 8,400 jewelry pieces.

With no place as safe as Switzerland, the refiners have to stay put. They’ll need a lot of Snoopys to counter the cost of running a business that brooks no mistakes.


    The bottom line: Sixty percent of the world’s refined gold comes from four refiners in Switzerland, which fiercely guards the integrity of its product.

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