Tuesday, July 3, 2012

Gold prices rise back over $1600 as demand for gold coins increases

Even in a shortened holiday market, gold was the largest winner as it climbed $25 to $1624.  This move is on top of a $44 climb last week as investors realize there is little safety in bonds or currencies around the globe.

At the same time, outside the euro area, global crisis has entered a stage of stabilization (not growth, yet), which means that demand for gold as safe haven (rather than a hedge) should be moderating as well. This can be expected to have a more modest impact on coins sales than on gold sales and especially ETFs-instrumented gold sales.

In other words, fundamentals (inflation expectations, longer-term savings and investment objectives) should be driving current demand for gold coins.

And, this is exactly what we are seeing. In June 2012, the US Mint sold 54,500oz of coinage gold, up on 53,000 in May 2012. Total for H1 2012, US Mint sales of gold coins in terms of total weight sold are down 41.3% on H1 2011 and it is down 49.8% on H1 2010 and 50.3% on H1 2009. Dramatic? Sure, when one disregards consideration of drivers for 2009-2011 demand for coins being coincident with extreme risks in other markets. - Goldcore via Zerohedge
As the global banking system and sovereign nations keep trying to push the cratering economic system another few months, more and more consumers are not only taking their cash from insolvent banks, but realizing that gold is the only wealth protection their have.


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