According to an article published on Bloomberg.com on May 16, 2011, “Sales of gold coins are on track for the best month in a year amid the worst commodities rout since 2008, a sign that bullion’s longest bull market in nine decades has further to run, if history is a guide.”
Since May 1st the US Mint has sold 85,000 ounces of American Eagle gold coins while the spot price of gold fell 5.62%. According to Bloomberg.com the last time sales from the Mint reached those levels gold rose 21% in the following year, and according to a survey of 31 analysts the average predicted gain for this year is 17% to $1,750 per ounce, and will go higher in 2012.
The demand for physical gold is climbing as fear of the dollar losing value and inflation looms in the minds of investors. Rand Refinery Ltd. which makes the gold Krugerrand, said that gold sales this month were the highest since August of last year. These types of sales numbers from these two mints are indicative that the demand for physical gold is strong. The reason for physical gold over ETFs is due to insecurity. Physical gold gives its owners the most amounts of safety and security.
Even central banks are getting in on the physical gold game. It is estimated that in February and March, Russia, Thailand and Mexico bought around $6 billion worth of gold bullion. Central banks now own 30,575 tons of gold which represents 18% of all the gold ever mined.
Investment demand for gold overtook jewelry demand in 2009 and shows no sign of stopping. It is estimated by Morgan Stanly that investment demand will rise to 1,597 tons this year, a 9.9% increase over last year. They further predict an increase of 11% for 2012.
As demand increases so do prices, therefore expect to see gold prices continue to rise well into the future. There are different ways that you can buy gold coins depending on what your goals are. If you would like to get more information please call us and speak to one of our experts, and ask for gold 101.