Austrian Mint’s Sales to Fall 47% on Lower Prices, Tax

The Austrian mint’s sales will shrink 47 percent this year on lower prices and a jump in Germany’s tax on silver coins.

Muenze Oesterreich AG, which makes the best-selling gold coin in Europe and Japan, estimates 2014 sales at 1 billion euros ($1.3 billion) from 1.9 billion euros in 2013, according to Gerhard Starsich, president of the Vienna-based mint.

Gold fell 6.3 percent in the past year as the Federal Reserve last month raised its outlook for interest rates, crimping demand for an inflation hedge. The appeal of gold is also waning as the U.S economic recovery sends the Standard & Poor’s 500 Index of shares to a record and the dollar to the highest since 2010. Silver, which touched a four-year low in September, has lost 20 percent in the past 12 months.

“We lost the German market this year,” Starsich said in an interview in Tokyo yesterday, referring to the tax increase on silver coin sales to 19 percent from 7 percent on Jan. 1. The mint is trying to make up for the lost sales by improving its network of dealers in the U.S., he said.

Holdings in exchange-traded products backed by bullion are down 2.6 percent since the end of July, helping to erase $5.4 billion in value, data compiled by Bloomberg show. Money managers cut their net-long positions in gold futures and options for a sixth straight week, the longest exit in more than four years, and are the least bullish since January, government data show.

Gold for immediate delivery was little changed at $1,206.84 an ounce at 11:00 a.m. in Tokyo after touching $1,204.57 yesterday, the lowest since Jan. 2, according to Bloomberg generic pricing. Silver traded at $16.9605 an ounce.

Outside Europe, the U.S. is the Austrian mint’s largest market for silver coins and Japan is the biggest gold-coin market, he said. Sales of Vienna Philharmonic gold coins to Japan rose 20 percent last year through Tanaka Kikinzoku Kogyo K.K., the country’s biggest bullion retailer.

Sales of gold coins rose 63 percent to 652,600 ounces in 2013 and silver coins climbed 65 percent to 14.5 million ounces, according to the mint’s website.

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