American Eagle Gold Coin Sales Jump as Financial Collapse Fears Rise Posted by Adam King on December 19, 2012
The price of gold steadied in early morning trade on Wednesday following a slide to a three and a half month low during the previous session as a rally occurred in stock markets and the euro hit multi-month highs on relative progress in U.S. fiscal talks.
The spot price of gold reached $1,669.26 per troy ounce, little changed from the close, and U.S. gold futures for February delivery shed $0.90 to $1,673.70 per troy ounce.
Following the reelection of President Barack Obama, data shows the sale of American Eagle Gold Coins more than tripled during the month of November compared with the same time period a year ago. Approximately 131,000 ounces of gold sold as the debate of the U.S. fiscal cliff coupled with the certainty the Federal Reserve and Ben Bernanke would continue the current ultra-loose monetary policy.
November sales were the strongest showing in 14 years, but analysts and gold bullion experts suggest that growing numbers of investors will protect their wealth, as well as profit from a degradation of the financial sector, by moving to gold bullion.
Projections for gold place the precious metal at higher prices in 2013. While a few banks and investment houses have continued to place gold over the $2,000 per troy ounce level, many have revised projections to more conservative numbers, but virtually all place the spot price of gold higher than it is today. Fundamental reasons given include the staggering national debt, currently over $17 trillion.
Arthur McGuire, vice president of Gold Coin, said in a press release that the fiscal cliff is causing a huge stir in investment markets, and this is precisely why gold coin sales skyrocketed in November. He added that many wise investors know that no matter what the fiscal cliff resolution is, the U.S. economy is still in a deep financial hole, and this is good for gold.
Gold has been a safe-haven store of wealth for millennia, serving as the best store of wealth as a tangible asset with an inherent value that can’t be debased. Since the financial collapse in 2008, gold’s qualities have made it one of the best performing assets in the market. In 2012, that performance has waned a bit with volatile price performance.
However, during the month of November, a decoupling between the price point and the physical demand in the market finally took effect. Many analysts had long looked at the physical market and our economic situation trying to make sense of the lack of physical demand. With the 131,000 gold ounces moving in November and the 33,742,500 ounces of American Silver Eagle Coins sold out this year, that physical demand has entered the market.