Citing extraordinary demand, the U.S. Mint has broadened its freeze on sales of gold bullion coins, as individual investors who are priced out of the futures markets have been piling up their holdings of the metal as a hedge against market uncertainty.
“Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high,” the Mint said in a memorandum late Monday, released to its authorized purchasers.
The Mint added in the memo that it’s halting the production and sales of several gold and platinum coins while putting a few other coins under allocation sales. The move came after the Mint halted sales of two other coins in September and August.
While the bulk of the 160,000-ton above-ground gold stock (about 5.1 billion ounces) is used in jewelry and the electronics industry, about 16% is held by investors for pure investment purposes, according to the World Gold Council. The gold investment market is dominated by big institutions, which trade with one another directly in large orders through over-the-counter markets. – wsj