March Gold Sales Drop as Stability Returns, Perth Mint Says

Gold sales from Australia’s Perth Mint, which processes all of the country’s bullion, declined 9.6 percent last month as signs of an accelerating economic recovery in the U.S. curbed demand for haven investments.

Sales of gold coins and bars dropped to 38,123 ounces from 42,161 ounces a year earlier, according to data e-mailed by the mint after an April 13 interview with Neil Vance, wholesale manager at the facility in Western Australia that was founded in 1899. Silver sales slumped 39 percent to 698,559 ounces, it said.

Bullion prices dropped in February and March as U.S. non-farm payrolls expanded, boosting signs that the world’s largest economy is recovering even as European countries including Spain tackle the region’s debt crisis. Sales from the mint may rebound later this year following a pattern seen in 2011, Vance said.

“What’s happened is a little bit more stability in world markets at the moment, and some of the interest has leveled off,” Vance said by phone from Perth. “Since the global financial crisis hit, we’ve experienced peaks and troughs, and we believe at the moment we’re just in a trough.”

Immediate-delivery gold, which dropped 2.4 percent in February and a further 1.7 percent in March, traded at $1,653.05 an ounce at 4:51 p.m. in Singapore. Spot silver was at $31.58 an ounce after declining 7 percent last month.

‘Bit More Gloomy’

“We’re getting to an area where it’s probably smart to get back into the market,” Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said by phone today. “The decision to buy is highly dependent on news headlines. We’ve seen in the last day or so, headlines about Europe turning a little bit more gloomy.”

Spain sold 3.18 billion euros ($4.18 billion) of bills today after borrowing costs climbed to near levels that prompted Greece, Ireland and Portugal to seek bailouts. The average 12-month yield was 2.623 percent in the sale, compared with 1.418 percent at the last auction on March 20, while 18-month bills yielded 3.11 percent, compared with 1.711 percent last month, the Bank of Spain said. The region’s crisis is getting worse, Pacific Investment Management Co. said on April 11.

In the first quarter, gold and silver coin and bar sales from the Perth Mint totaled 2.16 million ounces compared with almost 3.7 million a year earlier, according to mint data. Investors can buy and store gold at the mint, or buy coins to hold themselves. The figures refer to coins, as well as so-called investment and minted bars, according to the mint.

U.S. Mint

Sales of gold coins from the U.S. Mint were 62,500 ounces in March, 15 percent lower than a year earlier, according to the Washington, D.C.-based mint’s website. So far in April, they’ve totaled 12,500 ounces, and at that pace would be 25,000 ounces this month, 76.9 percent lower than a year earlier.

The U.S. grew “at a modest to moderate pace” from mid-February through late March as manufacturing, hiring and retail sales showed signs of strength, the Federal Reserve said in a report on April 11. Federal Reserve Bank of St. Louis President James Bullard said yesterday that the economy is “on track.”

Goldman Sachs Group Inc. said on March 28 gold will rise further on another round of stimulus from the Fed, which has pledged to hold rates at a record low through 2014 to sustain the recovery. While the metal may drop this quarter, the price may recover in the second half, UBS AG said the same day.

Gold may reach $1,830 in the third quarter and $1,900 in the fourth, according to the median estimate of 19 analysts compiled by Bloomberg. The metal, which has rallied for 11 years, reached a record $1,921.15 on Sept. 6 last year.

Holdings in bullion-backed exchange-traded products stood at 2,395.126 metric tons yesterday, according to data compiled by Bloomberg. That compares to the all-time high of 2,410.186 tons on March 13.

“People believe they see the peak in the price, so they sell back their coins or wait for it to come back in price before coming in to buy again,” Vance said. “Certainly we expect that to happen this year.”