The U.S. Mint has sold nearly 60,000 ounces of American Eagle gold coins so far in October due to increased global demand from store of wealth buyers as economic and geopolitical uncertainty increased.
With only three business days left until the end of October, the U.S. Mint has sold 59,500 American Eagle bullion one ounce gold coins. On a year-on-year basis, U.S. gold coin sales in October are up 21% from 48,500 ounces in October 2013.
U.S. Mint Silver Eagle, 2014 (1 Ounce)
Store of wealth silver bullion buyers continue to stack silver at a steady clip. They bought 4.12 million ounces of American Silver Eagle coins so far this month, versus 4.14 million ounces in September.
This means that nearly 68 times more silver in ounce terms was bought than gold. Silver buyers continue to see silver as severely depressed with silver below $20/oz and the gold silver ratio at 71 or $1,228/oz divided by $17.24/oz.
The gold bullion coin sales from the U.S. Mint are the highest monthly sales since January and are higher than the 58,000 that were sold in September. The 58,000 ounces sold in September was more than double the demand in August, mint data shows
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"(Islamic State), Ebola, Putin and Ukraine... There is a litany of these things which have risen in the last year or so which have provided a negative backdrop," Scott Spitzer of MTB told Reuters.
Sales to European buyers rose on the belief that a proposal to prohibit the Swiss National Bank from selling any of its gold reserves and a provision that the SNB may have to have a 20% gold backing to the Swiss franc may lead to increased demand both from the Swiss central bank and from other central banks.
It is important to note the following:
* Bullion coins are purchased by long-hold collectors and financial insurance buyers
* Bullion coins attract demand from savers and store of wealth buyers, rather than speculative investors and speculators
* Bullion coins are used frequently to store intergenerational wealth and pass wealth from one generation to the next
Gold and silver bullion coins remain the preserve of a tiny minority of buyers who are more risk conscious and generally more aware of geopolitical, monetary and indeed systemic risk than the broader public.
Smart money is willing to pay a small premium to own actual coins and bars rather than have the exposure of an ETF or digital gold platform.
Prudent diversification into physical coins and bars will again reward those who take a long term view.
See Essential Guide to Storing Gold and Silver In Switzerlandhere
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,228.00, EUR 963.67 and GBP 761.65 per ounce.
Yesterday’s AM fix was USD 1,228.25, EUR 967.58 and GBP 762.23 per ounce.
Spot gold was up 0.3% to $1,230 an ounce in New York yesterday. Gold traded little changed above a two week low in London today despite very robust global demand for physical gold.
Gold in U.S. Dollars - 5 Years (Thomson Reuters)
Gold for Swiss storage or for immediate delivery was flat at $1,228.40. Silver for immediate delivery added 0.1% to $17.2285/oz. Platinum rose 0.4% to $1,271.25/oz. Palladium climbed 0.6% to $797.89/oz. It’s up for a fifth day in the longest run of gains since August 15.
Fed watchers continue to see the Fed’s interest rate decision as key to the outlook for gold. It may indeed cause price volatility in the short term. However, global physical demand may again be of more importance to the gold market. This seems likely as interest rates are set to remain low for the foreseeable future.
Asian demand remains strong, especially in India and China.
Volumes on the Shanghai Gold Exchange’s (SGE) benchmark gold bullion spot contract rose to a three week high today.
Gold’s biggest buyer, China, continues to see very robust demand. Imports of gold from Hong Kong rose to a five-month high in September, data showed this week and even more importantly imports ex Hong Kong remain very high as seen in the withdrawals from the Shanghai Gold Exchange (SGE).
Silver in U.S. Dollars - 5 Years (Thomson Reuters)
India saw very high demand for gold for the Hindu festival of Diwali, a major cultural and religious gold buying event.
Central banks remain net buyers too. Russia and Kazakhstan were among nations that substantially added bullion to their reserves in September, data on the International Monetary Fund website showed today.
The U.S. Mint sold 59,500 ounces of American Eagle gold coins so far this month - the most ounces of American Eagle gold coins sold since bullion coin inventory stocking in January (see above).
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