Monday, January 27, 2014

Mints Running 24 Hours a Day To Keep Up With Demand

I've mentioned previously that Swiss gold refiners are running flat out 24 hours a day, 7 days a week to keep up with demand from Eastern central Banks. Now Bloomberg reports that demand for gold coins around the world has increased due to lower prices in 2013.
Austria’s mint is running 24 hours a day as global mints from the U.S. to Australia report climbing demand for gold coins even while Goldman Sachs Group Inc. says this year’s price rebound will end.
Austria’s Muenze Oesterreich AG mint hired extra employees and added a third eight-hour shift to the day in a bid to keep up with demand. Purchases of bullion coins at Australia’s Perth Mint rose 20 percent this year through Jan. 20 from a year earlier. Sales by the U.S. Mint are set for the best month since April, when the metal plunged into a bear market.
Global mints are manufacturing as fast as they can after a 28 percent drop in gold prices last year, the biggest slump since 1981, attracted buyers of physical metal. The demand gains helped bullion rally for five straight weeks, the longest streak since September 2012. That won’t be enough to stem the metal’s slump according to Morgan Stanley, while Goldman Sachs Group predicts bullion will “grind lower” over 2014.
“The long-term physical buyers see these price drops as opportunities to accumulate more assets,” said Michael Haynes, the chief executive officer of American Precious Metals Exchange, an online bullion dealer. “We have witnessed some top selling days in the past few weeks.”
 This follows a recent story on US Mint demand:
  The United States Mint's bullion program delivered stellar results during the fiscal year ended September 30, 2013. A sharp increase in demand drove record sales volume of 45,862,000 ounces of gold and silver bullion. Total revenue for the segment grew by 31.8% to more than $3.2 billion with net income more than doubling to $59.3 million.
After two previous years of declines, the US Mint saw gold bullion sales rebound sharply during the year. American Gold Eagle sales grew by 51.9% to 983,000 ounces and American Gold Buffalo sales grew by 66.7% to 235,000 ounces. The increased demand was driven in part by a decline in the market price of gold. When gold posted its largest one day percentage drop in 30 years on April 15, 2013, authorized purchasers ordered more than 100,000 ounces of gold during the next three days. The jump in demand resulted in the temporary sell out of the one-tenth ounce sized American Gold Eagles.
The US Mint achieved record breaking volume in silver bullion coin sales at 44,644,000 ounces across the two offerings. Sales of the American Silver Eagle bullion coins grew by 29.2% compared to the prior year, while the lower volume America the Beautiful Silver Bullion Coins saw growth of 143.8%. Amidst high demand, the Silver Eagles remained subject to allocation from January 28 through the end of the fiscal year.
During times when demand exceeds available supply, the US Mint has used an allocation program to ration the available number of coins amongst authorized purchasers.
During the fiscal year, the average daily spot price of gold was $1,521.61 per ounce, down by 8.4% from the prior year. The average daily spot price of silver was $26.79 per ounce, down by 13.4% from the prior year.

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