In case you missed this one from the Wall Street Journal - this is really significant as it signals the shift of gold into the retail investment market, and the mint can already not keep up!
Washington: The US Mint suspended sales of its one-ounce “American Eagle” gold coins after soaring commodity prices led collectors and investors to deplete supplies.
It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines. The coins also contain small amounts of alloy for hardening.
In a memo to dealers dated August 15, Cathy Laperle, a Mint official, said: “”Due to the unprecedented demand for American Eagle Gold One Ounce Bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins. We are working diligently to build up our inventory and hope to resume sales shortly.”
Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17 as the price of crude oil increased and the dollar weakened against the euro and other currencies. Commodity prices have since retreated. American Eagle coins, introduced in 1986, are also available in other weights as well as silver and platinum.
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Peter, though well-intentioned, I fear your information here is a bit sensationalistic and perhaps misleading. Keep in mind that the U.S. Mint also issues the 24-carat (pure gold) Indian Head/Buffalo gold bullion coins in the same fractional weights as the Eagle, and those Indian Head bullion coins are available without a problem. Also, the American Eagle gold coins in the lesser fractional amounts are still available. It’s just the one-ounce coins that are in shortage. Reference:
http://in.us.biz.yahoo.com/rb/080821/gold_eagle_shortage.html?.v=3
Snippet: “Michael White, a U.S. Mint spokesman, said that only the one-ounce 22-karat American Eagle coins are sold out, but the half-ounce, quarter-ounce, and 1-10th ounce coins as well as the less popular 24-karat American Buffalo coins are still available.
“We are working diligently to build up our inventory and hope to resume sales shortly,” the Mint said.”
I think that part of the problem is that many buyers in the U.S. are not even aware of the fairly new Buffalo gold coins, or, perhaps they just don’t like the Buffalo/Indian Head design and prefer the American Eagle coin over the Buffalo. But in reality, gold bullion coins ARE available, maybe just not the more highly desired one-ounce Eagles.
I belive investors are okay to buy and hold a variety of bullion coins, including the beautiful Canadian Maple Leaf and Chinese Panda types, among others. Though some variations in gold fine-ness in the different types of coins exist, basically, gold is gold. Also, many coin dealers offer bullion gold bars, which are an acceptable alternative to coins. In fact, bullion bars may be an even more economical investment if larger weights are desired. (Those premiums paid on individual coins start to add up quickly…).
Comment by Eric in Seattle — August 27, 2008 @ 11:52 am
Thanks I take your point - although it was an WSJ article not mine! But there does seem to be an emerging shortage of coins which now command a bigger premium over spot gold than in the recent past.
Comment by peterjcooper — August 27, 2008 @ 2:20 pm
Sole Maker of South African Krugerrands Today RAN OUT of Coins
The sole maker of South African Krugerrands today ran out of the iconic bullion coin after an ‘unusually large’ order from a buyer in Switzerland.
An unnamed Swiss buyer ordered a massive 5000 ounces, cleaning out the Rand Refinery’s gold stocks.The Krugerrand is the world’s best known gold coin and was introduced in 1967 to provide a convenient, easily tradeable form of bullion.
Rand Refinery has delivered more than 46m blank coins over the years.
Precious metal bullion is attracting investors as a haven against a sliding dollar and global conflict and has led to shortages.
Comment by Mark Herpel — August 29, 2008 @ 9:00 pm