Gold Coins on the Rise

Gold coin retailers largely consider May as the worst month for the sale of gold coins. This year however, there has been a record selling of gold coins even in this month. During the first week of May itself, the U.S. Mint is reported to have sold as many as 41,500 American Eagle 1-ounce gold coins. This is huge when compared to a total of 60,500 ounces for the entire month of April 2010. Not just physical gold, the investors showed a rush for gold ETFs. The bullion holdings of SPDR Gold Trust (GLD) increased by 20 tonnes on May 06, the biggest single day gain in the last 15 months. The continued trend ensured a sale of as many as 190,000 American Eagle gold coins by the U.S. Mint in the month of May. The success has bid the retailers a likely splendid summer.

Not just in the U.S., but globally, a similar gold surge has been observed. In the month of March, a buying spree was experienced in Germany as well when the government decided to pour in hefty sum for Greece’s bailout. Though, this was attributed more to the distasteful past experience of the Germans, to their unpreparedness towards a failed currency situation. The slow recovery from the recent international monetary crisis further fueled the panic. The Austrian Mint also witnessed a six-fold increase in its Vienna Philharmonic coin for the month of May over the previous year. The Royal Canadian Mint reported a similar surge. It received orders for about 120,000 of its Maple Leaf coins against the usual sale volumes of 5,000-25,000.

Experts suggest a lowered confidence in paper currency and monetary markets as a reason for this observation. Gold is emerging as a hedging instrument for people during economic uncertainty. In effect, they are not just buying coins, but also other portable forms like small bars. The spill over effect of the Euro zone crisis is seen as another reason for an increased sale of gold in the U.S. in May 2010.