U.S. Bullion Coins Spike on November Gold Dip Posted by Adam King on December 03, 2012
A softer U.S. Dollar Index prompted new bargain buying in the gold market after selling pressure last week. In early trade on Monday, U.S. gold futures for February delivery gained $8.80 to $1,721.50 per troy ounce. The spot price of gold gained $4.50 to $1,720.25 per troy ounce.
November sales of U.S. Mint American Eagle Gold Coins more than doubled sales from the previous month and more than tripled from the same period last year. Current sales levels mark the best month since July 2010 and the best November since 1998.
Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC, said there is a significant amount of industry selling in anticipation of higher taxes related to the fiscal cliff. He added that on the other hand, there is a fair amount of retail buying, but in this case Wall Street tends to win.
Frank Lesh, broker and futures analyst at FuturePath Trading, said markets are now hostage to the fiscal cliff debate as it is now risk on or risk off at any moment and no one really knows how the situation will turn out. He added there is also some end-of-year profit taking and tax selling going on, but until there is more clarity on this issue, he expects gold to chop around in a range, and prompts market watchers to look for prices to be steady.
Kitco’s weekly gold survey is bullish for gold prices next week with 18 participants seeing prices higher, 2 expecting them to fall and five neutral.
United States Mint distributor ordered even more bullion coins on Friday, contributing to the already exceptional sales for the month. As yet, November bullion product sales have not been officially closed but sales levels are not likely to change. American Eagle Gold Coins sold 136,500 ounces, more than doubling the October sales at 59,000 ounces and more than tripling the 41,000 ounces moved in November 2011.
The most recent month to perform better than November 2012 was July 2010 when sales reached 152,000 ounces.
American Eagle Silver Coins sales reached 3,159,500 ounces, just over the 3,153,000 ounces sold in October and twice the 1,384,000 ounces moved in November 2011.