Is demand growing for gold coins as a store of wealth?
*Los Angeles Times, by Tom Petruno, August 22, 2008
“U.S. Mint Runs Out of 1-ounce Gold Coins as Demand Jumps
Gold-market bulls couldn’t buy publicity much better than this: The U.S. Mint says it has run out of 1-ounce American Eagle gold coins because of rocketing demand.
That may have helped fuel a sharp rebound in gold futures prices Thursday, although the metal also got plenty of help from rising U.S.-Russia tensions, a falling dollar and renewed buying of commodities across the board.
The Mint told coin dealers last week that its inventories of 1-ounce Eagles had been temporarily depleted because of ‘unprecedented demand.’ The Mint sells only to a small number of dealers, which then distribute the coins to other sellers, such as coin shops. The prices retail investors pay change daily and are based on the market price of gold plus a small premium.
The government has sold 60,000 1-ounce gold coins this month, up from 47,500 in all of July and just 13,000 in June. Sales of U.S. silver Eagle coins, meanwhile, have been hot all year, leading to rationing of those coins by the Mint.
Coin dealers confirm that they’ve been swamped with orders over the last month as the price of gold dived from $977.70 an ounce on July 15 to $786 last Friday, the lowest since December.”
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