Mints struggling to meet gold coins demand

March 03, 2009

Commodity Online
MUMBAI: Analysts have said that the market for gold remains robust following a small dip in prices and could well rise to challenge a record $1,030 per ounce reached last year.

Although gold prices have dropped back slightly from more than $1,000 an ounce, an article in Financial Times predicts that they will climb further over the coming months, as retail demand remains strong.

A fall in the total global output of gold last year by nearly four per cent to 2,385 tonnes could fuel prices further, according to an expert.

Mark O’Byrne, a director at Gold and Silver Investments, told the newspaper: “Demand is set to remain strong for the foreseeable future while supply remains tight, especially as central banks are increasingly reluctant to sell their gold reserves.”

Mints around the world are “struggling” to meet rapidly growing demand for gold bullion coins, raising premiums and causing shortages, the paper reported.

A recent report in Financial Times suggested that rising demand is creating a shortage of gold coins as investors attempt to safeguard their money in the wake of the global economic slowdown.

The world is on a mad rush to buy gold coins as recession is looming large over the globe. As investors across the globe are scared of the security of their money, they tend to put all their investments in gold, that too in gold coins. That is why there is a huge rush to buy gold coins in New Zealand mints.

In fact, New Zealand had recently stopped selling gold coins because of the rush in demand.

Similarly, gold coins are the hottest commodity in India these days. Even as the price of gold continues to rise, sale of gold coins are taking place at brisk pace through banks, equity and commodity broking companies, finance firms and post offices across India.

As gold prices zoomed to record levels in February, buyers of the yellow metal are faced with a different kind of a problem in Middle East’s booming city of Dubai. There was an acute shortage of gold coins during the annual Dubai Shopping Festival.

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