Wednesday, 27th August 2008 (540 views)

Following the announcement from the US Mint that production of the American Gold Eagle one-ounce coin had to be suspended, an industry insider has suggested it may be as a result of "Asian-style" metal hoarding.

Lawrence Williams from Mineweb said in Middle Eastern and Asian cultures, gold is often used as an "insurance policy" by investors and is bought up and sold in times of economic uncertainty.

Although in these cultures gold usually comes in the form of jewellery and are presented at weddings and other festivals, in Western cultures gold coins are used as they have smaller fabrication premiums - their real value is closer to what you pay for them.

The increase in gold sales may be evidence of this hoarding - in the first couple of weeks of August this year, 60,000 of the Gold Eagle coins were bought in the US compared to 12,000 a month in 2007.

Earlier this week, the US Mint announced production of the one-ounce coins would be temporarily allocated out to authorised dealers to help meet customer demand.

 

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