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Gold Coin Demand Exploding

In June 2013, when the gold price touched its multi-year lows (just below USD 1,200), demand for physical gold truly exploded. It had been one of the reasons for which we remained believing that the gold bull market has not run its course yet, contrary to what mainstream economic and investment pundits tend to believe.

The ultimate test came two weeks ago, when gold touched again the same price level as in June. The gold price jumped quickly higher. The double bottom was not only a powerful technical signal, it was also confirmed in the physical market with another explosion in demand.

Bloomberg reported that the Royal Mint in the UK ran out of 2014 gold coins (“Sovereigns”). The mint expects to have stocks of the coins again by the end of January. The Royal Mint said in a statement: “Since the dip in the price of gold we have seen increased demand for our gold bullion coins from the major coin markets, and this presently shows no sign of abating. The Royal Mint continues to supply to its customers and is increasing production to accommodate the higher demand.”

Daniel Marburger, director at Jewellers Trade Services in London, which buys and sells coins and bars, told Bloomberg: “Due to the low price level, we’re currently experiencing high demand. We also have a lot of companies restocking” coins at the start of the year.”

On the other side of the Atlantic, the US Mint reported sales of 56,000 ounces of American Eagle gold coins in December. That’s the highest sales since June. The Mint sold 14% more in 2013 compared to a year before. According to CoinUpdate, the US Mint anticipates that they will have approximately 3.5 million coins to allocate on January 13, 2014. They have indicated that allocated quantities for the following week will be much lower. The initial amount of coins available will be lower compared to the prior year.

Source Gold Silver Worlds

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