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 “Coins Are Probably Of More Value Than Anything Else” – CME President

In a remarkably candid interview, the President and Executive Chairman of CME Group Inc, Terrence Duffy, told Bloomberg TV that today gold buyers “don’t want certificates … They want the real product”.

When asked by Cristina Alecci at the Milken Institute 2013 Global Conference in Los Angeles on Bloomberg Television’s “Street Smart.”about gold, Duffy says

“What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product.”

“I think that is the value of gold.”

“Whether you are going to own mining stocks are anything else. I think the coins are probably of more value than anything else.”

The CME Group Inc or Chicago Mercantile Exchange is the world’s largest futures exchange company. It owns and operates large derivatives and futures exchanges in Chicago and New York City, as well as online trading platforms. It also owns the Dow Jones stock and financial indexes, and CME Clearing Services, which provides settlement and clearing of exchange trades.

The CME‘s President’s comments were noticed by Mike Krieger of Liberty BlitzKrieg and featured on Zero Hedge.

Slowly but surely, gold coins and bars value as safe haven assets, unlike gold futures and other paper and digital forms of gold, is being realised.

All paper forms of gold, particularly leveraged ones, should be avoided due to counter party and systemic risk.

The exception to the rule regarding certificates are Perth Mint Certificates. They are in effect warehouse receipts which are fully backed by physical gold, silver and platinum – ounce for ounce – from the AAA rated government of Western Australia.

Mints from the U.S., Great Britain and Australia have all seen a surge in demand after gold futures fell 13% in mid April.

The U.S. Mint’s gold coin sales have reached their highest level since December 2009.

Gold coin sales at the U.S. Mint in March were 62,000 ounces, while in April sales reached 209,500 ounces and back in December 2009 they recorded 231,500 ounces of coins sold.

Silver-coin sales in April were 4.2 million ounces up from 3.36 million in March.

The price drop has shifted investor sentiment out of gold backed ETF’s and into physical gold.

The yellow metal has fallen 12% this year, even after an 11% gain from $1,321.50/oz on April 16.

Demand was so strong after the price retracement that the U.S. Mint ceased sales of its .10/oz gold coins on April 23.

In Australia, consumers were cueing in lines ½ of a kilometre to purchase gold coins. In jewellery stores in China and India they had their stock depleted in a day, according to The World Gold Council.

The heightened demand brings premiums that investors are paying to have the precious metal in their hands.

In India they are paying 5 times the amount before the price drop in April. In Singapore and Hong Kong consumers are paying nearly $3/oz, said to Ng Cheng Thye, the head of precious metals at Standard Merchant Bank (Asia) Ltd.

In the U.S., the Arizona Senate passed legislation to make gold and silver accepted as currency, and it now goes to the governor for approval. This is a further step by citizens to protect themselves against the lack of control and collusion in the current international monetary system.

Source: http://www.zerohedge.com/contributed/2013-05-01/gold-coins-are-probably-more-value-anything-else-cme-president