'Gold Rush' Bubble? US Gold Coin Sales Fall 25%

Today’s AM fix was USD 1,653.75, EUR 1,029.60 and GBP 1,267.82 per ounce. Friday’s AM fix was USD 1,632.25, EUR 1,254.32 and GBP 1,018.37 per ounce.

Silver is trading at $30.21/oz., €23.29/oz. and £18.89/oz. Platinum is trading at $1,565.50/oz., palladium at $682.00/oz. and rhodium at $1,150/oz.

Cross Currency Table – (Bloomberg)

Gold dropped $8.20 or 0.49% in New York on Friday and closed at $1,656.30/oz. Silver slipped to as low as $29.22 in London, but it then rallied to as high as $30.25 in New York and finished with a gain of 0.2%. Gold finished down 0.05% for the week, while silver was up 0.53%.

Friday’s U.S. nonfarm payrolls for December were 155K, 150K was expected and this was down from the previous data of 161K. The unemployment rate was still an elevated 7.8% suggesting a frail US jobs market.

Gold edged up on Monday on the heels of uninspiring US jobs data which supported market expectations for continued quantitative easing from the US Federal Reserve.

In gold futures and options hedge funds and institutions increased the size of their net longs in gold in the week to Dec. 31, ending two weeks of declines, CFTC data showed.

The US Mint's gold coin sales slid for a third consecutive year in 2012 showing how demand for gold bullion among the retail public remains lackluster at best. Demand remains well below the record levels seen preceding the Y2K scare in 1999 and below the levels seen when the coins were first launched in 1987 and in the aftermath of the Wall Street Crash of October 1987.

Falling demand for coins in the US and elsewhere is likely due to the false perception that the worst of the global debt crisis has been seen. American Eagles are more popular in the US but other government mints such as the Perth Mint of Western Australia have said that they saw a fall in demand in 2012.

The U.S. Mint sold 753,000 troy ounces of American Eagle gold coins in 2012, according to data posted on its website, down 25% from a year earlier and the lowest full-year sales since 2007.

US Mint Gold Coin sales (oz.) & End-of-Month Price of Gold(USD) – (True Economics)

Dr. Constantin Gurdgiev has analyzed the data of US Mint coin sales in December 2012 and has looked at them in their important historical context going back to 1986. He is one of the few academics in the world to have researched and written academic papers about gold.

His analysis of demand for US minted gold coins was published on his excellent, must read blog – True Economics and can be read here:

US Mint Gold Coins Sales: 1986-2012 Data

US Mint December 2012 Sales

GoldCore believe that the fall in demand is due to renewed complacency regarding the global debt crisis. It is also likely due to the fact that traditional buyers of gold coins and bars have secured their allocation to store of wealth gold bullion in recent years. It may also be because there are only a few new retail buyers coming into the bullion market in western countries - unlike in Asian countries and particularly China.

Page 1 of 3 >>
Comments
comments powered by Disqus

Market Data

Sponsored By:
Check out Resource Investor - Polls on LockerDome on LockerDome