Sales of gold coins from January to July rose 79 percent from a year earlier to 383,500 ounces, according to data e-mailed by the Vienna-based mint, almost matching those for the whole of last year of 400,000 ounces.
Mints saw sales jump after the price of gold, 15 percent lower this year, plunged into a bear market in April. Surging demand for jewelry, coins and bars in Asia helped prices rally as much as 21 percent since the end of June.
“As soon as the gold price went down, many individual buyers thought: ‘Now it’s the best time for us to get into the gold market,’” Andrea Lang, the mint’s marketing and sales director, said by phone yesterday. “As soon as there’s a movement in the gold price, people are interested in the gold market.”
Gold, which rose for 12 consecutive years through 2012, slumped this year as some investors lost faith in the metal as a store of value amid speculation the U.S. Federal Reserve would slow its bond-buying program. Bullion prices dropped to as little as $1,180.50, a 34-month low, on June 28 in London trading. Minutes released Aug. 21 showed Fed policy makers were “broadly comfortable” in slowing debt purchases.
Gold rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system by purchasing debt, increasing investors’ concern about currency debasement and accelerating inflation.
Prices that are 26 percent below the record $1,921.15 set in September 2011 increased physical demand in Asia. Consumer buying in India, last year’s biggest user, jumped 71 percent in the second quarter from a year earlier. Chinese purchases rose 87 percent, helping to push global bar and coin sales to a record and jewelry usage to the most since 2008, the London-based World Gold Council said Aug. 15.
“We sell everything we produce and we think it will keep that way,” Lang said. “We’ll be very busy for the next couple of months.” July coin sales rose 40 percent from the previous month to 69,500 ounces, lower than April’s 116,600 ounces, according to mint data.
Mints from the U.S. to the U.K. reported a surge in sales after gold’s plunge into a bear market lured buyers. The U.S. Mint’s sales of its American Eagle gold coins rose 82 percent this year through the end of July to 679,500 ounces from a year earlier, according to data from the U.S. mint. Sales peaked at 209,500 ounces in April, before dropping back to 50,500 ounces in July. Britain’s Royal Mint saw its gold-coin sales triple in April, while Australia’s Perth Mint, which refines nearly all of the nation’s bullion, said that month that demand jumped to the highest level in five years.
Gold prices climbed to as high as $1,433.83 in London today, the highest since May 14, as sales from bullion exchange-traded products stalled and amid political tension over Syria. Gold-backed ETP holdings increased for a second successive week last week, narrowing this year’s drop to 26 percent, data compiled by Bloomberg show.
“People feel a little insecure about the whole economic situation over Europe and they are worried the interest that banks give them is now quite low,” said Lang. “These are two very good motives to buy gold.”
To contact the reporter on this story: Alex Pashley in London at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Carpenter at email@example.com