Demand for Gold Coins Remains Strong

Americans’ appetite for U.S.-minted gold coins is still at unexpectedly high levels following the historic sell-off in mid-April, according to the head of the U.S. Mint. Mom-and-pop investors responded to the initial drop in the gold price by hurriedly buying most of what the U.S. Mint had in stock at the time, leaving some products in “sold out” status and others available to authorized purchasers only in limited quantities.

Heavy buying of gold, including the U.S. Mint’s gold bullion and numismatic coins, has helped gold climb from $1323 in April to above-$1400 levels at time. The gold spot price currently resides at $1391, up $6.80 for the day as of noon CST.

“Demand right now is unprecedented. We are buying all the coin (blanks) they can make,” said Richard Peterson, the U.S. Mint’s acting director. “We don’t want to have inventory [lying] around that we are not going to be using, so we walk a fine line between having too much and having enough. When the prices fell so dramatically, demand for [tenth-ounce gold Eagle coins] more than doubled and sold out,” Peterson added.

Indeed, the U.S. Mint had to stop selling tenth-ounce gold Eagles in May because it did not have enough gold planchets, or blank rounds, to produce enough coins to meet demand. Sales of gold bullion coins, including the 22-karat American Eagle and the 24-karat American Buffalo, at the U.S. Mint, are on pace to hit a record-high 45 million coins this year. By contrast, 2012 ended with the Mint selling about 35 million ounces of gold bullion coins.

Even though gold is down by about 16 percent this year, the heightened demand is proof that investors are not 100 percent on board with our government’s claims of economic recovery, and much less their claims that our financial markets have been reformed. Visit the Gold Coin Market Update page this Friday to see how gold coins finished this week price-wise.

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