VIENNA/LONDON (Reuters) - In the heart of Vienna in a Biedermeier building commissioned by Emperor Franz I, a man wearing a khaki uniform and beret exchanges a wad of euro notes across the counter for a few sparkling gold coins.
Guenther Fuchssteiner, 59, is a military doctor who for over 20 years has been coming to the Austrian Mint and exchanging whatever spare money he has for gold, following a habit established by his parents.
"I have always tried to put a little bit of gold aside, as an investment, and I have been doing so more since the crisis," said Fuchssteiner.
A few years ago his visits to the Mint, which was founded more than 800 years ago, might have seemed eccentric.
No longer. From the Georgy Pobedonosets to the American Eagle, gold coin production is being cranked up in mints around the world to satisfy customers believing the assets may be immune to the global financial crisis.
Russia's state-controlled Sberbank says it has never seen such strong demand for investment coins, while the U.S. Mint says sales of its one-ounce American Eagle gold bullion coins rocketed over 400 percent to 710,000 ounces in 2008.
"The demand for gold and silver has been unprecedented," said Carla Coolman, a spokeswoman at the United States Mint.
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 percent in the first two months of 2009.
"There is no sign of demand abating," Austrian Mint Marketing Director Kerry Tattersall told Reuters, expecting sales this year 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 soared 300 percent last year.
"It's the man in the street, not particularly rich people but normal citizens like you and me," said Rauch, 65, monitoring the fluctuating price of gold on a screen in his back room.
Gold hit a record high of $1,030.80 an ounce in March 2008 and last month rose back above $1,000. Jewelry sales by cash-strapped Americans and Europeans have helped brake the metal's rise in recent weeks.
The Czech Republic's Komercni Banka this month added gold coins and bars to their traditional portfolio of products. In New Zealand, Michael O'Kane, head bullion trader at the Mint, said the mint 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 precious metals group Heraeus.
"If you buy a kilo bar you have to pay one time the surcharge for producing the bar, which is pretty low," he said. "If you buy thirty one-ounce coins, which would be about equal to a one-kilo bar, you have to pay thirty times that amount."
But coins have the edge for small investors who want flexibility, and appreciate their aesthetic allure.
Demand is for more than physical product: in the past few years, gold has been sought after for speculative gains, with interest in gold-backed funds in particular soaring.
Gold-backed exchange-traded funds (ETFs) are listed on stock exchanges and offer investors exposure to price without physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults.
But since the financial crisis accelerated last autumn, interest has increased in coins and bars, with investors seeking security rather than profit.
"There are people who are sufficiently concerned about the state of the world that, for them, even ETFs aren't good enough because you only have a piece of paper," said Stephen Briggs, a metals strategist at RBS Global Banking & Markets.
"Although that entitles you to gold, it is not actually gold under the bed."
Other manufacturers are reducing output and jobs, but the Royal Canadian Mint quadrupled capacity to produce 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 four.
It has extended its shifts throughout the night and weekend and recruited more workers to cope with the demand.
"It is weird, given the economic situation, because all these other companies are doing badly and we are one of the few companies that are actually doing really well," said Martin Marsik, 32, who works with thundering machines in the smelter of the Austrian Mint.
"It is a bit stressful ... (but) no one can complain he is worried about losing his job," said Marsik, his face illuminated by green flames as he monitored the furnace temperatures up to 1,100 degrees centigrade (2,012 degrees Fahrenheit).