Australian mint suspends gold orders due to high demand

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switters's picture
switters
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Australian mint suspends gold orders due to high demand

Mint suspends orders amid rush to buy bullion

Sarah-Jane Tasker
| November 22, 2008

Article from: 
The Australian

FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.

With
retail and wholesale clients around the world stocking up on the
precious metal, the Perth Mint has been forced to suspend orders.

As the World Gold Council reported that the dollar demand for gold
reached a quarterly record of $US32 billion ($50.73 billion) in the
third quarter, industry insiders said the race to secure physical gold
had reached an intensity that had never been witnessed before.

Perth Mint sales and marketing director Ron Currie said the
unprecedented demand had forced the Mint to cease orders until January,
with staff working seven days a week, 24-hour days, over three shifts
to meet orders.

He said Europe was leading the demand, with Russia, Ukraine, Middle
East and US all buying -- making up 80 per cent of its sales. One
European client purchased 30,000 ounces for $33 million.

"We have never seen this before and are working right at capacity.
And we are seeing it from clients in the shop buying one ounce, right
up to 30,000 ounces from overseas clients," Mr Currie said.

Robert Jaggard, manager of bullion and rare coins dealer Jaggards,
said business had picked up strongly and he expected it to increase
further.

"All around the world there has been a heavy run on physical gold and there is a shortage of supply," he said.

Mr Jaggard, who has been dealing in gold for 40 years and is an
agent for the Perth Mint, said some clients were buying up to $1million
worth of gold, paying a premium above the spot price.

Late yesterday afternoon, spot gold in Sydney was trading at $US747.30 an ounce, up $US8.15 on Thursday's local close.

"Professional business people who have previously bought small
amounts now want more gold because they are suffering in other
markets," Mr Jaggard said.

At a conference this week in Munich, delegates were lined up 30-deep
to purchase physical gold. And reports out of the Middle East suggested
that there had been unprecedented gold buying in Saudi Arabia during
the first half of November, with an estimated $US3.5 billion purchased
in recent weeks.

The World Gold Council, releasing its global demand trends
yesterday, said identifiable investment demand, which incorporates
demand for gold through exchange-traded funds and bars and coins, was
the biggest contributor to overall demand during the quarter. It was up
to $US10.7 billion, double last year's levels.

The figures showed retail investment demand rose 121 per cent to 232
tonnes in the third quarter, with strong bar and coin buying reported
in Swiss, German and US markets.

The quarter also witnessed widespread reports of gold shortages
among bullion dealers across the globe, as investors searched for a
haven. Overall, quarter three saw Europe reach an all-time record 51
tonnes of bar and coin buying. France became a net investor in gold for
the first time since the early 1980s.

World Gold Council chief executive James Burton said gold's
universal role as a store of value had shone through during the
quarter, helping attract investors and consumers to all forms of gold
ownership.

"The rise in demand for gold bars and coins has been impressive," he said.

Demand in India, the largest market for gold, recovered during the
third quarter, encouraged by lower gold prices, a good monsoon and the
onset of the festive season. At 250 tonnes, total consumer demand was
31 per cent higher than the same period last year. In value terms,
demand hit the record quarterly sum of $US5 billion.

cnbbaldwin's picture
cnbbaldwin
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Joined: Apr 23 2008
Posts: 59
Re: Australian mint suspends gold orders due to high demand

Gold is on the move this morning.  Is this the beginning of a sustained movement that we have been anticipating?

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Australian mint suspends gold orders due to high demand

Hard to say.  I don't really trust rallies in this environment.  My sense is that people got pretty freaked out by the market freefall over the past couple of days and gold is now acting as a safe haven.  The dollar has also slid off its recent highs and that is probably affecting gold's price as well.  Did we hit bottom for gold and are we now on the way back up?  Your guess is as good as mine.

gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 549
Re: Australian mint suspends gold orders due to high demand

But certainly the increasing lag in getting actual delivery of physical gold will certainly not be pushing prices lower  ;-)

If there is a default in December as is rumoured there might be, well ..... all bets off?

Cheers Hamish

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