Unprecedented Gold Coin Demand Suggests Asian-Style Precious Metal Hoarding Spreading to the West

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According to Richard Smith of coin dealers CSG Inc. in Phoenix - Another gold conspiracy unveiled! - the first two weeks of August saw 60,000 coins sold in the U.S. - around ten times the volume recorded in 2007 when sales were at around 12,000 a month.

Gold has long been considered a "safe haven" insurance policy by individual investors - and some institutional ones - against rising inflation and non-controllable political, natural and fiscal disasters. In Asian and Middle Eastern cultures this is especially the case with gold and other precious metals being kept against unpredictable needs - and, as a consequence, gold and silver are also used as wedding and festival gifts - indeed in some societies, particularly in India, such gifts are de rigueur in such ceremonies.

In Asia and Middle East, private gold hoarding of this type is mostly in the form of jewellery which is usually sold by weight and without the kind of fabrication mark-ups seen in the West, which is one of the reasons jewellery demand is such an important factor in precious metals supply and demand and why a country like India is so important in global demand figures...

It is thus significant that what the U.S. Mint describes as ‘unprecedented' demand is leading to slow deliveries from gold coin dealers who can't keep up with burgeoning demand and, even more significantly the recent halt in deliveries of U.S. one ounce Gold Eagles by the Mint because it has run out of the blanks necessary to mint the coins. According to Richard Smith of coin dealers CSG Inc. in Phoenix writing here a few days ago - Another gold conspiracy unveiled! - the first two weeks of August saw 60,000 coins sold in the U.S. - around ten times the volume recorded in 2007 when sales were at around 12,000 a month.

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