Mint Quadruples Production of Gold Coins
By Thomas Biesheuvel and Nicholas Larkin
The U.K.’s Royal Mint, established in the 13th
century, more than quadrupled production of gold
coins in the third quarter after demand for the
metal increased as investors sought to hedge
against a weakening dollar.
Output rose to 32,735.8 ounces from 7,500.2
ounces a year before, according to data obtained
by Bloomberg News under a Freedom of Information
Act request. Production in the first nine months
more than tripled to 100,391.3 ounces, the data
Gold is set for a ninth annual gain as countries
have cut interest rates to near zero percent and
spent $2 trillion to pull the global economy out
of the worst recession since World War II. The
metal reached a record in London yesterday and
has gained about 29 percent this year, while the
dollar has dropped 7.3 percent against a basket
of six currencies.
“There’s still a total lack of confidence in the
financial system,” David Russell, a director at
Dublin-based brokerage and bullion dealer
GoldCore Ltd., said in an interview. “Investors
are seeing the benefits of diversifying into
gold. Smaller investors are clued into the fact
that inflation possibilities are a worry for the
Sales of American Eagle gold coins by the U.S.
Mint more than doubled in the first nine months
to 954,000 ounces, its Web site showed. Harrods
Ltd., the London department store, began selling
gold bars and coins for the first time in
Global gold demand climbed 10 percent in the
third quarter to 800.3 metric tons from the
previous three months after investors bought the
metal as a currency hedge and jewelry purchases
picked up, the World Gold Council said today.
Bullion fell for the first time in five days in
London after reaching $1,152 an ounce yesterday.
Gold for immediate delivery declined $10.50, or
0.9 percent, to $1,135 by 2:56 p.m. local time.
A ninth annual gain would be the longest winning
streak since at least 1948.
Muenze Oesterreich AG, the Austrian mint that’s
the world’s largest marketer of pure gold coins,
sold 1.9 million ounces of gold so far in 2009,
its President Kurt Meyer said last month. That
was 23 percent more than last year’s total
sales, he said.
“It’s a tangible asset, and its value can be
quickly and easily realized,” Russell said.
“We’re seeing very good demand in the coin
market. Many investors are aware that they’ve
been poorly diversified over the past few
Bullion holdings in some exchange-traded funds
have risen to records in recent months. India
last month bought 200 metric tons, followed by a
smaller purchase by Mauritius. Analysts at Bank
of America Merrill Lynch, Societe Generale SA
and Barclays Capital have forecast further
purchases by central banks.
The U.K. mint moved to Llantrisant in Wales from
London’s Tower Hill in 1968, three years before
Britain switched to a decimal currency system.
It makes coins including the 22-carat 2010 Gold
Proof Sovereign, weighing 7.99 grams (0.26
ounce) and costing 299 pounds ($500), the state
agency’s Web site shows.
The mint’s use of silver rose 56 percent from a
year earlier to 94,343.3 ounces in the third
quarter, the figures show. Production in the
first nine months increased 31 percent to