Bloomberg News

U.S. Mint Gold-Coin Sales Fall as Record Prices Curb Purchases

October 25, 2011

Oct. 25 (Bloomberg) -- U.S. Mint sales of American Eagle gold coins may fall 32 percent in October, dropping for the second straight month as near-record prices curb demand.

Sales were 41,500 ounces this month through Oct. 20, on track to reach 62,250 ounces, according to the Mint’s website. That compares to 91,000 ounces in September and 112,000 ounces in August.

Gold reached a record $1,923.70 an ounce on Sept. 6. While the precious metal has dropped 14 percent since then, it is still up 16 percent this year. The 100-day historical volatility for gold jumped to 26.42 percent yesterday, the highest since 2009, data compiled by Bloomberg show.

“We have seen a slowdown” in sales, said Michael Kramer, the president of New York-based MTB, one of 11 dealers authorized to purchase bullion coins directly from the mint, said in a telephone interview. “The volatility is keeping people away because they want to know which direction prices will go.”

Coin sales totaled 843,500 ounces for the year through September, down from 954,500 ounces in the same period last year, according to the Mint’s website.

Gold prices fell to $1,535 on Sept. 26 on the Comex in New York, the lowest for a most-active contract since July 8, before jumping to a three-week high of $1,696.80 on Oct. 17.

“People want clarity on the Europe debt issue,” Savneet Singh, the chief executive officer of New-York based Gold Bullion International, which offers precious-metals storage to investors, hedge funds and financial institutions, said by telephone. “People are holding onto cash because of the volatility in the market.”

Yesterday, gold futures for December delivery gained 1 percent to $1,652.30 on the Comex. The metal is heading for an 11th straight annual gain.

Michael White, a public relations officer at the U.S. Mint, declined to comment about the sales data.

--With assistance from Terry Barrett in Washington. Editors: Daniel Enoch, Millie Munshi.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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