The gold market is again showing signs of distress and people are waking up to sound money. The manipulated drop in price through the paper and futures market is a blessing for those who can see beyond the world fiat paper experiment. Courtesy of Bloomberg:
The U.K.’s Royal Mint, which traces its history back more than 1,000 years, ran out of 2014 Sovereign gold coins as prices near a six-month low led to “exceptional demand.”
The mint, based in Llantrisant, Wales, expects to have stocks of the coins again by the end of January, it said in a statement e-mailed today. It has full availability of gold and silver Britannia bullion coins, it said. Gold dropped to a six-month low of $1,182.27 an ounce in London on Dec. 31, capping the largest annual decline since 1981.
Bullion slumped for the first time since 2000 last year as some investors lost faith in the metal as a store of value and on speculation an improving economy will spur the Federal Reserve to slow stimulus. Prices that are now 36 percent below the record set in September 2011 boosted sales from mints in the U.S. to Australia and increased imports into Turkey.
“Due to the low price level, we’re currently experiencing high demand,” Daniel Marburger, a director at Jewellers Trade Services Ltd. in London, which buys and sells coins and bars, said today by phone. “We also have a lot of companies restocking” coins at the start of the year, he said.
Gold for immediate delivery rose as much as 5.6 percent from the six-month low set on Dec. 31 and traded at $1,222.37 an ounce by 4:45 p.m. in London. Prices, which reached a record $1,921.15 in 2011, slumped 28 percent last year. The metal priced in pounds slid 29 percent last year and was at 742.52 pounds an ounce today, data compiled by Bloomberg show.
The U.S. Mint sold 56,000 ounces of American Eagle gold coins in December, the most since June and contributing to a 14 percent gain in annual sales, data on its website show. Australia’s Perth Mint sold 41 percent more gold in 2013 and Turkey’s imports climbed 64 percent last month to the highest since July, data on the Istanbul Gold Exchange’s website show.
“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,” the U.K. mint said in the statement. “The Royal Mint continues to supply to its customers and is increasing production to accommodate the higher demand.”
Coin stock availability has gone up and down in the past according to market demand, the mint said in a separate e-mail. Gold climbed to a three-week high of $1,248.51 on Jan. 6 as physical demand increased, particularly in China.
Investors sold 869.1 metric tons from gold-backed exchange-traded products in 2013, more than they purchased in the previous three years combined and wiping $73.4 billion from the value of the funds, data compiled by Bloomberg show. Holdings fell to 1,754.3 tons yesterday, the lowest since October 2009.
The Fed, which decided at its Dec. 17-18 meeting to cut monthly bond purchases to $75 billion from $85 billion, will release minutes of that meeting today. Gold rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system.
“We are currently experiencing an extremely high demand for British gold coins from countries like Italy, Greece and of course the U.K.,” Jewellers Trade Services’ Marburger said in a separate e-mail. “We’ll have to wait for the Federal Reserve minutes tonight and then we might know where the price will go for the next couple of weeks,” he said by phone.