Gold Coin Sales Halted After Retail Rush By Javier Blas in London Published:
September 25 2008 23:03 | Last updated: September 25 2008
The rush by retail investors into gold on Thursday
forced the US government to temporarily suspend
the sales of the popular American Buffalo one-ounce bullion
coin after depleting its inventories.
The shortage of gold coins is the latest sign of investors
seeking a safe haven into bullion amid Wall Street woes. Gold
prices this week surged above $900 an ounce, up about 20 per
cent from its level before the collapse of Lehman Brothers.
Safe-haven buying spurred by a weakening dollar and rising
inflation on the back of high commodity prices have also benefited
gold sales, analyst said.
The US Mint said in a memorandum that demand has exceeded
supply and, therefore, it was temporarily suspending
sales of these coins. We are working diligently
to build up our inventory and hope to resume sales shortly,
Spot gold in New York on Thursday traded at $875 an ounce,
down $5 on the day. Traders said bullion prices came under
pressure from a strengthening in the dollar. Gold set a record
of $1,030.80 an ounce in March.
The US Mint said it has sold 164,000 ounces of gold in American
Buffalo one-ounce bullion coins since January, almost 54 per
cent more than in the same period of last year. Demand for
other gold coins from the US Mint is also very strong.
Last August, a shortage of American Eagles one-ounce bullion
coins, another popular gold investment, due to unprecedented
demand also forced the US Mint to suspend sales and
later to place limits on the number it ships to dealers.
The US Mint has sold since last January about 419,500 ounces
of bullion in the form of American Eagles coins, more than
double the 198,500 ounces it sold during the whole 2007. In
2006, it sold 261,000 ounces.
The scarcity of gold coins comes as investors in bullion-backed
exchange traded funds (ETFs) have amassed a record 1,054 tonnes
of bullion, becoming the largest holders of gold after the
reserves of the US, Germany, the International Monetary Fund,
Italy, France and Switzerland.