U.S. Mint Sales of Gold Coins Jump to Highest in Three Years

Sales of gold coins by the U.S. Mint rose to the highest since December 2009 after the price of the metal in April fell the most in 16 months.

Last month, sales totaled 209,500 ounces, up from 62,000 ounces in March, data on the mint’s website show. The amount for December 2009 was 231,500 ounces. Silver-coin sales rose to 4.2 million ounces from 3.36 million in March.

May 1 (Bloomberg) — David Lennox, a resource analyst at Fat Prophets in Sydney, talks about the outlook for commodities including oil and gold. He also discusses Federal Reserve and European Central Bank monetary policies with Zeb Eckert on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

Demand surged at mints from Australia to the U.K. and the U.S. after futures slumped 13 percent in two days through April 15. Gold futures tumbled 7.8 percent last month and dropped into a bear market as some investors lost faith in the metal as a store of value. Perth Mint, which refines almost all of the nation’s bullion, said that demand jumped to the highest in five years after prices plunged, with the factory kept open through the weekend to meet orders.

“People are flocking to buy physical gold,” Todd Dutkevitch, a senior account executive at Los Angeles-based American Bullion Inc., said in a phone interview. “The price drop has made it possible for many retail buyers to add gold.”

Futures for June delivery rose 0.1 percent to $1,473.30 an ounce on the Comex in New York today. The metal is down 12 percent this year, even after advancing 11 percent from a 26- month low of $1,321.50 on April 16.

The U.S. mint said April 23 it suspended sales of coins weighing a 10th of an ounce after demand more than doubled from a year earlier.

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The mint sells 22-karat American Eagles of 1 ounce at a 3 percent premium to London “p.m. fixing” prices. A half-ounce coin is set at 5 percent above, a quarter-ounce coin is 7 percent above, and one weighing a 10th of an ounce fetches a 9 percent premium, according to Michael White, a Mint spokesman.

“The 1-ounce gold bullion coins are the most popular,” White said last week.

In Australia, buyers were waiting in lines half a kilometer (0.3 mile) long to get minted coins, and jewelry shops in India and China ran out of gold in a single day, Jason Toussaint, the managing director of investments at the London-based World Gold Council, said in an interview. India and China are the world’s largest consumers of bullion.

Surging demand from Dubai to Istanbul has pushed physical premiums in the region to levels not seen in years as the biggest price slump in three decades lures consumers, according to MKS (Switzerland) SA.

Shanghai Trading

Trading for the benchmark contract on the Shanghai Gold Exchange surged to a record last week, while premiums to secure supplies in India jumped to five times the level before the slump. China and India are the world’s largest buyers.

Consumers in Singapore and Hong Kong are paying premiums of about $3 an ounce, compared with about $2 just after the rout, according to Ng Cheng Thye, the head of precious metals at Standard Merchant Bank (Asia) Ltd.

Still, holdings in exchange-traded products backed by the precious metal tumbled 174 metric tons in April, a record drop, according to data compiled by Bloomberg.

“This drop has made physical gold much more attractive than paper gold,” Dutkevitch said.

Source: http://www.bloomberg.com/news/2013-04-30/u-s-mint-sales-of-gold-coins-at-three-year-high-on-price-drop.html

Gold Resumes Decline as Investors Cut Holdings, Dollar Advances

Gold dropped as investor holdings contracted for an eighth week in the worst run since 2004 and the dollar climbed, curbing demand for the metal as an alternative asset.

Gold for immediate delivery fell as much as 0.3 percent to $1,575.83 an ounce and traded at $1,579.05 at 11:52 a.m. in Singapore. Earlier, the metal rose to $1,583.20, the highest price since April 2, extending a 1.7 percent rally on April 5 after U.S. jobs data missed expectations, bolstering the case for prolonged central-bank stimulus.

Holdings in ETPs dropped 0.6 percent to 2,434.436 metric tons last week, the lowest level since August, according to data compiled by Bloomberg. Investors sold a net 0.9 ton on April 5 even after data showed U.S. payrolls had the smallest gain since June. The Dollar Index (DXY), a gauge against six major counterparts, rallied as much as 0.3 percent today as the yen dropped to the lowest level since 2009.

“We’ve seen gradual rise in U.S. currency because there’s really nowhere else to go,” said David Lennox, an analyst at Fat Prophets in Sydney. “The U.S. economy looks in pretty good shape compared to everyone else, that’s pushing the currency up and having a detrimental impact on gold.”

International Monetary Fund Managing Director Christine Lagarde said yesterday that a “substantial portion” of the global economy appears better now than a year ago. The IMF predicts global growth of 3.5 percent in 2013, from 3.2 percent a year earlier. Holdings of gold in ETPs have dropped 7.5 percent this year, and prices slumped to a 10-month low on April 4, nearing a bear market.

Stimulus Debate

Gold’s 12-year bull rally is probably ending as the U.S. leads a global economic recovery, according to banks from Credit Suisse Group AG to Goldman Sachs Group Inc. Bullion has retreated 5.8 percent this year as Federal Reserve policy makers debated the pace of $85 billion of monthly asset purchases and as U.S. equities reached a record.

Bullion for June delivery rose 0.2 percent to $1,578.70 an ounce on the Comex after rallying 1.5 percent on April 5.

Spot silver was little changed at $27.295 an ounce. Platinum gained 0.3 percent to $1,542.25 an ounce, while palladium advanced 0.5 percent to $731.30 an ounce.

Source: http://www.bloomberg.com/news/2013-04-08/gold-resumes-decline-as-investors-cut-holdings-dollar-advances.html