Got phyzz? Physical shortages of Gold start to hit UK

As reported in Bloomberg the UK mint has reported that sales are more than 150 percent higher than last month, according to Shane Bissett, director of bullion and commemorative coin at the Royal Mint.

image

“Since the dip in the price of gold we have seen increased demand for our gold bullion coins from the major coin markets, and this presently shows no sign of abating,” Bissett said by e-mail in response to questions from Bloomberg. “The Royal Mint continues to supply to its customers and is increasing production to accommodate the higher demand.”

The U.S. Mint said yesterday it suspended sales of its smallest American Eagle gold coin after demand more than doubled from a year earlier. A surge in gold demand is Turkey is causing delays in coin deliveries by the Istanbul-based mint, Chief Executive Officer Sadettin Parmaksiz told Haberturk April 19.

The recent drop in the price of gold and silver has opened up a market to investors looking to diverse their portfolio away from paper fiat assets. Especially from the BRICS (Brazil, Russia, India,China and South Africa) and Eastern based economies.

The concept that a leveraged market (1:100 physical to paper) can provide a ‘kosher’ price is farcical. The Comex and the LBMA will eventually default and declare that they will not stand for physical delivery but settle in fiat paper money.

One thing to bare in mind with the current shortage. Suppliers will not be selling stock at below the value they paid for it. They could offset the lower price with higher premiums but with a significant drop in price, suppliers to the general market will wait on delivery of new physical before satisfying market demand.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s