Oct. 3 (Bloomberg) -- The U.K.’s Royal Mint increased gold sales by 12 percent in July from a year earlier, following a slump in prices to a 34-month low in June.
The mint sold 10,069 ounces in July, compared with 8,955 ounces a year earlier. The data was obtained by Bloomberg News under a Freedom of Information Act request. While sales of American Eagle gold coins by the U.S. Mint rose 66 percent from a year earlier to 50,500 ounces in July, demand slowed every month since sales reached 209,500 ounces in April.
Bullion is set for the first annual drop in 13 years as some investors lose faith in the metal as a store of value. Gold advanced as much as 21 percent after slumping to $1,180.50 an ounce in June as lower prices boosted demand for jewelry, bars and coins, particularly in Asia. India, last year’s biggest buyer, restricted bullion imports this year to curb a trade deficit and banks from Goldman Sachs Group Inc. to Societe Generale SA forecast price declines as economies strengthen.
“With physical demand out of Asia having moderated from the first-half surge and the Indian market still struggling to get to grips with new import restrictions, we are comfortable in retaining our bearish” outlook, Tom Kendall, an analyst at Credit Suisse Group AG, wrote today in a report. “Of course, there will be rallies within the downward trend but we continue to believe the correct strategy is to sell those rather than buy dips.”
Gold for immediate delivery traded at $1,308.05 an ounce by 1:59 p.m. in London, set for a 22 percent slide this year. Credit Suisse sees gold averaging $1,180 next year and Goldman forecasts prices will drop to $1,050 at the end of 2014.
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