Monday 2nd September 2013
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We note that many of the World’s mints are reporting strong demand for their minted products, particularly Gold coins. It does appear the increasing demand has “underpinned” the price which seems to have bottomed.
Examples of the Market Demands are:
According to data from the U.S. Mint, sales of its American Eagle gold coins rose 82 percent this year through to the end of July to 679,500 ounces as compared to a year earlier. Sales peaked at 209,500 ounces in April, before dropping back to 50,500 ounces in July.
Britain’s Royal Mint saw its Gold coin sales triple in April.
Perth Mint, which refines nearly all of the nation’s bullion, said this month that demand has jumped to the highest level in five years.
There has been increased demand in Asia due to the Gold price being some 26 percent below the record $1,921.15 set in September 2011. In India, the biggest user of gold in 2012, consumers kept buying and the demand grew by 71 percent in the second quarter as compared to the same period in 2012. The demand in China increased dramatically by 87 percent and pushed the sales of global gold bars and coins to a record level and jewelry consumption to the highest level since 2008. Surging demand for gold jewelry, coins and bars in Asia helped the gold price to rally by 21 percent since the end of June.
The Austrian Mint, which mints Philharmonic coins, increased its sales this year after the gold price dropped. Their sales of gold coins from January to July rose by 79 percent from a year earlier to 383,500 ounces, almost matching the level for the whole of last year of 400,000 ounces. This was after the price of gold dropped by 15 percent in April 2013.
Gold prices climbed as high as $1,433.60 this week, the highest since 14 May 2013. Gold-backed ETF holdings increased for the second week last week, narrowing this year’s decrease to 26 percent.
Gold demand promises to remain strong. The first leg of the next stage of the market in gold has started.
Gold may be set to nearly double from current levels, but it didn’t drop in a straight line and it won’t return to (and surpass) its previous highs in a straight line, either.
If you’re looking to start or add to a position in gold (or other precious metals), you should get ready to buy when the time is right for you. Watch your inbox for our updates.
Note there are a large number of products available now which allow an investor to gain exposure to the Gold markets.
Mining Company Shares
Unit Trusts which specialise in the Gold sector
Futures and Options
DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.
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