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Accelerated business
continues to be the norm in US physical gold markets. The U.S.
Mint turned out 90,000 1-ounce gold Eagles in October, and
another 37,500 the first week of November. Yet it hasn’t been
enough. We offered up some 1,000 1-ounce gold Eagles early this
week, only to sell them all in six hours of trading. It was bad
enough to have to turn away subsequent customer inquiries for
gold Eagles for the rest of the week – it turned worse when we
learned that next week’s gold Eagle release from the Mint will
be even smaller. The US Mint will turn out 1-ounce and some
tenth-ounce Eagles in the next few weeks, but quarter- and
half-ounce size gold Eagles will not be newly available until
they release 2009-dated product in January. Platinum Eagles are
no longer available this year in the 1-ounce size. Silver Eagles
are still being produced, but in such small numbers that the
distributors are charging $4.75-$5.50 over spot - and getting
it.
As we reported here a few weeks ago, the production bottleneck
for the US Mint is the supply of gold (and silver) blanks from
which to strike their popular Eagle coins. The Mint announced
last week that bid proposals are out seeking new planchet
suppliers to help increase production even more. We hope it
happens soon.
The Rand refinery in South Africa has put on extra shifts to
strike additional quantities of the world-famous Krugerrand, now
being exported to Europe and the US in numbers not seen this
century. Yet still production is not enough to meet demand.
Barring some miracle, we will be offering only 100 Krugerrands
this week.
Up in Canada, the royal Canadian Mint has ceased production of
the limited edition 5-9s gold Maple Leaf, suspended production
of 100- gram and kilogram bars, and postponed the change-over to
2009-dated coins, in a so-far unsuccessful effort to meet
today’s demand for the regular gold Maple Leaf coin, a demand I
would estimate at somewhere between five and ten times what
prevailed in the more ‘normal’ times of 2007.
We are happy to report that the Pamp Suisse company continues to
come through with ample supplies of their bullion bar products.
We introduced 100-gram .9999 pure gold bars right before
Halloween, and have now sold most of a thousand bars to
gold-starved customers. And for larger purchasers, increasingly
the .9999 gold kilogram bar has become the gold unit of choice.
Supplies have been tighter for Pamp Suisse’s more
time-and-labor-intensive die-struck 1-ounce and ten- ounce,
factory sealed Fortuna bars. Nevertheless, it has been a wise
business decision by Pamp to aggressively respond to today’s
record demand by emphasizing quantity over fancy packaging while
this gold rush is on.
Over the next few weeks, there is at least some hope that we
will be able to broaden our offerings of gold bullion products,
as traditionally the Thanksgiving to New Years season is
normally a time of lessened bullion demand.
However, these times are far from normal. As Eric Sprott of
Sprott Asset Management calls it, in his October commentary,
“Cash or Gold?:”
“We are in the midst of a financial crisis – not just any
financial crisis mind you, but arguably the worst and most
pervasive the world has seen in almost a century (second only to
the Great Depression… thus far). In the sea of financial assets
and currencies that are being decimated the world over, the one
true safe haven continues to be gold."
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