Gold sales from Australia’s Perth Mint, which refines most of the country’s bullion, tumbled in August, adding to signs bullion demand in advanced economies is slumping as the U.S. Federal Reserve prepares to curb stimulus.
Sales of gold coins and minted bars dropped 46 percent to 30,430 ounces last month from 56,488 ounces in July, according to data from the mint. Demand in August was 73 percent lower than the pace in April, when bullion entered a bear market.
Gold lost 17 percent in 2013 after 12 years of gains as the U.S. economy improved and the dollar and stocks advanced. The U.S. central bank is expected to start cutting back its $85 billion-a-month asset-buying program from next week, according to a Bloomberg survey on Sept. 6, even after jobs data for August missed expectations. Sales of gold coins by the U.S. Mint retreated in August to the lowest level in six years.
“The demand for physical when the price came down was just fantastic and we had some really good months in April, May and June,” Ron Currie, sales and marketing director at the mint, said in an interview in Perth. “July was still good but not quite as good, and August dropped off a little bit.”
Bullion for immediate delivery traded 0.4 percent lower at $1,386.06 an ounce at 6:06 p.m. in London, extending two weeks of losses. Gold slumped in April, May and June -- bottoming at $1,180.50 on June 28, the lowest since 2010 -- before rebounding in July and August on signs of rising Asian demand. World stocks tracked by MSCI All-Country World Index have rallied 10 percent this year, while the Bloomberg Dollar Index rose 4.2 percent.
“A lot of people got in at April and May, just before it got to the bottom,” said Currie. The price “volatility is good. People try to trade in the market and from our point of view that’s fantastic,” said Currie.
Signs of lower demand for coins and bars in the U.S. and Australia come amid record sales from exchange-traded products. Holdings in ETPs have shrunk 26 percent to 1,953.7 metric tons in 2013, data compiled by Bloomberg show. The U.S. and Europe are the biggest markets for the Perth Mint, according to Currie.
The U.S. Mint sold 11,500 ounces of gold coins in August, the lowest since July 2007 and down from 50,500 ounces in July, according to that mint’s data. Coin sales have dropped since April, when they surged to a 40-month high of 209,500 ounces.
Lower prices have spurred demand across Asia, including in India and China, the two largest users. Sales of jewelry, coins and bars will reach as much as 1,000 metric tons in both countries in 2013, the London-based World Gold Council estimates. That would beat China’s 2011 record of 778.6 tons and be near India’s all-time high of 1,006.5 tons in 2010.
Fed policy makers were comfortable with Chairman Ben S. Bernanke’s plan to start reducing bond buying later this year if the economy improves, according to minutes of their July meeting. The U.S. economy expanded 2.5 percent last quarter, up from an initial estimate of 1.7 percent, the Commerce Department said Aug. 29. Payrolls in August grew 169,000, according to data Sept. 6, trailing the 180,000 median forecast in a Bloomberg survey.
The Fed will start to cut the monthly asset purchases at the Sept. 17-18 meeting, paring them by $10 billion, according to the median of 34 responses in a Bloomberg survey on Sept. 6, after the jobs data. That’s unchanged from an Aug. 9-13 poll.
The Perth Mint, which began operations in 1899, previously included so-called investment cast bars in the monthly sales figures supplied to Bloomberg, which are of the same purity as the minted bars. A minted bar is struck and carries a unique serial number, according to the mint.
The mint said in July that its sales of gold bars and coins totaled 49,460 ounces in June, 92,781 ounces in May and 116,755 ounces in April and 52,704 ounces in March. The latest data show sales of 47,692 ounces in June, 88,638 ounces in May, 112,575 ounces in April and 50,356 in March.
The facility is owned by the Western Australian government and refines between 300 tons and 400 tons each year, including mined and scrap gold, according to its website. Australia is world’s biggest gold producer after China.