Gold Coin Sales Halted After Retail Rush By Javier Blas in London Published:
September 25 2008 23:03 | Last updated: September 25 2008
23:03
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, it added.
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.