September 26th, 2011
07:20 AM GMT
(CNN) – China’s wealthy now can get up to 2.5 kilograms of gold via ATMs in the city’s upscale clubs and private banks, state media reported.
The machines made their debut in a Beijing shopping district on Sunday, according to AFP. Limit for maximum withdrawal is set at 1 million yuan, or about $157,000 worth of gold. Cash or credit card accepted.
Since the credit crisis, the value of gold has skyrocketed as a safe haven investment choice, selling for just over $500 an ounce in 2007 to recently cresting near a record high of $1,900 per ounce in August.
However, the timing of the new ATMs for China’s nouveau riche could be better. In recent days gold prices have plummeted, dropping $100 on Friday alone – the steepest drop since 1980.
Why the sudden drop? Fears of the slowing of the global economy raises the specter of deflation. "People are quickly coming to the realization that gold does very bad in a deflationary environment," Keith Springer, president of Springer Financial Advisors, told CNNMoney.
On Monday, gold was trading at $1,659 per ounce.
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