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An employee places a gold Combibar into a press machine at a plant of gold refiner and bar manufacturer Valcambi SA in the southern Swiss town of Balerna December 20, 2012. The divisible gold combibar has a purity of 99.9 percent, weighs 50 grams and also has predetermined breaking points which allow it to be easily separated without any loss of material into 1 gram pieces. Picture taken December 20, 2012. To match story SWISS-GOLD/ REUTERS/Michael Buholzer (SWITZERLAND - Tags: BUSINESS EMPLOYMENT)MICHAEL BUHOLZER/Reuters

Private investors in Switzerland, Austria and Germany are lining up to buy gold bars the size of a credit card that can easily be broken into one gram pieces and used as payment in an emergency.

Now Swiss refinery Valcambi, a unit of U.S. mining giant Newmont Mining Corp., wants to bring its "CombiBar" to market in the United States and build up its sales presence India – the world's largest consumer of gold where the precious metal has long served as a parallel currency.

Investors worried that inflation and financial market turmoil will wipe out the value of their cash have poured money into gold over the past decade. Prices have gained almost 500 per cent since 2001 compared to a 12 per cent increase in MSCI's world equity index.

Sales of gold bars and coins were worth almost $77-billion (U.S.) in 2011, up from just $3.5-billion in 2002, according to data from the World Gold Council.

"The rich are buying standard bars or have deposits of physical gold. People that have less money are buying up to 100 grams," said Michael Mesaric, CEO of Valcambi "But for many people a pure investment product is no longer enough. They want to be able to do something with the precious metal."

Mr. Mesaric said the advantage of the "CombiBar" – which has been dubbed a "chocolate bar" because pieces can be easily broken off by hand into one gram squares – is that it can be easily transported and costs less than buying 50 one gram bars.

"The produce can also be used as an alternative method of payment," he said.

Valcambi is building a sales network in India and plans to launch the CombiBar on the U.S. market next year. In Japan, it wants to focus on CombiBars made of platinum and palladium.

Elsewhere, demand is particularly strong among Germans, still scarred by post-World War One hyperinflation, when money became all but worthless and it took a wheelbarrow full of notes to buy a loaf of bread.

"Above all, it's people aged between 40 and 70 that are investing in gold bars and coins," said Mr. Mesaric. "They've heard tales from their parents about wars and crises devaluing money."

The CombiBar is particularly popular among grandparents who want to give their grandchildren a strip of gold rather than a coin, said Andreas Habluetzel head of the Swiss business of Degussa, a gold trading company.

Other customers buy gold for security reasons.

"Demand is rising every week," Mr. Habluetzel said. "Particularly in Germany, people buying gold fear that the euro will break apart or that banks will run into problems."

Some fund managers, however, remain skeptical.

Stephan Mueller, who manages bank Julius Baer's $6-billion gold fund, said one problem with using gold as a method of payment is that people have to take its value on blind trust.

"Gold is a useful store of value," Mr. Mueller said. "However I doubt whether it will succeed as a method of payment."

Nonetheless, as developments in the euro zone lurch from one crisis to another, demand for gold that can be sold in vending machines is also growing.

"Sales rise according to the temperature of the crisis," said Thomas Geissler, whose firm Ex Oriente Lux operates 17 gold vending machines in Europe, the United States and the United Arab Emirates.

The machines saw record sales in 2010, one day after the then Deutsche Bank CEO Josef Ackermann raised doubts over whether Greece would be able to pay its debts.

Since the launch of the machines, which operate under the name "GOLD to go", 50,000 customers have withdrawn more than €21-million in gold. The average buyer is male, over 50 years old and well off.

"Customers are hoarding gold mostly at home as a precaution against a crisis, just as their fathers and grandfathers did before them," Mr. Geissler said.

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