Gold Hits Records in Rupees, Sterling and Euros

Source:

...the Perth Mint has doubled its output of Kangaroo and Nugget coins over the past six months and reports that it sold 62,630 ounces of these coins in the three months to September 20th, compared with 154,501 ounces for the whole of the twelve months to June 30th - so on a pro rata basis the September quarter sales were running at 62% higher than in the financial year 2008.

The gold price fixed at $900.50 on Friday afternoon (October 10th), $123 or 12% below its record of $1,023.50 as the professional market swung between safe haven buying and distress selling. Gold has been sharing its safe-haven status with US Treasuries, which is one of the elements that has been buoying the dollar and helping to boost gold to record levels in other currencies, including sterling, the euro and - possibly significantly - the rupee, given that India typically absorbs 20% of world gold fabrication and bar hoarding demand.

In the past it has often been a question of "either the dollar or gold" as the ultimate safe haven. This time they are sharing the spotlight and although this might seem counter-intuitive, there are good reasons for both to be in demand.

First, the dollar. The purchase of Treasuries, which have been highlighted as one of the key safe havens and which provide liquidity, requires dollars...

Gold lease rates bounded higher in the first week of October, with gold for one month reaching 2.7% before easing slightly, as a result of strong physical demand at both the retail and professional level. Demand for coins has rocketed. After a temporary suspension of one-ounce Eagle sales in August due to massive demand, the US Mint has now said that "blank supplies are very limited" and that it is necessary to focus bullion production primarily on one-ounce gold and silver coins...

In Australia, the Perth Mint has doubled its output of Kangaroo and Nugget coins over the past six months and reports that it sold 62,630 ounces of these coins in the three months to September 20th, compared with 154,501 ounces for the whole of the twelve months to June 30th - so on a pro rata basis the September quarter sales were running at 62% higher than in the financial year 2008.

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