Bullion buyers bank on gold coins
Justacommeman
Posts: 22,847 ✭✭✭✭✭
Maybe some of the 0 to 10 folks in the poll thread can start here 
MJ
SAN FRANCISCO (Marke----tch) -- Apart from a New York City phone book listing, gold dealer Manfra, Tordella & Brookes, Inc. does no advertising. Lights are on all day because the shop sits in a basement.
Yet MTB, as the firm is known, has never been busier. Every day, people find their way to the Manhattan store with one thing in mind: getting their hands on gold bullion coins, as soon as possible and as much as possible, before the financial Armageddon they fear renders the dollars in their pockets worthless.
Welcome to the world of bullion coin investing, a business that has soared alongside the popularity of gold despite its disadvantages. The world's thirst for gold coins has risen more than sovereign government mints can quench it, with demand on track this year to outpace 2009, itself a record.
Bullion coin investing may cost youInvesting in bullion coins has risen alongside gold's popularity, catering to a small subset of investors who want physical possession regardless of how much more they may pay. Claudia Assis reports.
The coin craze is part of gold's growing investment allure, based on fears of currency debasement, inflation, a debt debacle in Europe, and rising debt levels in the U.S. But the boon has also brought the practices of some retailers in the industry to question, with at least two U.S. companies under investigation for allegedly misleading consumers.
Bullion run
Bullion coin investing caters mostly to a subset of investors who want physical possession of gold and regard anything else as lesser investments, no matter how much more they have to pay, ounce per ounce, over gold futures prices or the difficulties they are likely to face when unloading their bullion.
Long having captured the hearts of a few in the periphery of the investment world, gold has won over some of Wall Street's elite. Investment stars such as Paul Tudor Jones, of giant hedge fund Tudor Investment Corp. and John Paulson, of Paulson & Co., all have invested heavily in gold in recent years.
Investing in bullion coins is not to be confused with investing in collectable coins, although both are manufactured and sold by mints across the world. Bullion coins are valued entirely for their metal content, not for their collectible value or the denomination hammered on them. For many, they are an affordable and portable way to invest in gold.
It's no coincidence that May was one of the best months in recent memory for the bullion coin business, and gold in general. It was also the month that concerns about a European debt crisis reached their highest note, and gold hit its first nominal record high since December.
"It's been unbelievable. May was phenomenal," with June sales and so far July a bit slower but still way above average, said Michael Kramer, one of the owners of MTB.
Precious-metals research firm GFMS estimated that 229 metric tons of gold coins were sold in 2009, up 22% from the 187 metric tons of 2008 and almost 70% from the 135 metric tons that moved in 2007.
"It looks as though we are going to surpass 2009," said Phillip Newman, research director of the U.K.-based firm.
The U.S. mint ran out of some bullion coins last year and in 2008, and the Austrian mint added a third shift to catch up on their stocks. In his Manhattan store, Kramer caters to about 45 coin buyers a day, up from fewer than 10 a day in previous years, as the firm's forte is wholesale.
MTB is one of only eight authorized firms in the U.S. able to purchase U.S. Mint bullion coins directly and sell them to coin shops nationwide and abroad. The U.S. Mint does not sell bullion coins to the public, as it does with commemorative and other coins.
Europe's Week Ahead: BP and Shell reportEuropean markets will get their first chance to react to the bank stress tests, with the latest earnings from BP, Royal Dutch Shell, Deutsche Bank and UBS all likely to be closely watched.
In addition to the new swarm of retail customers, MTB saw heightened interest from European coin retailers. "They couldn't find enough coins in Europe, and they were buying from us."
The Austrian mint, which, alongside Canada's mint and the U.S. Mint is a top mint by sales, had to add a night shift to its two day shifts to counter delivery delays of two to three weeks and depletion of stocks.
"We did run out of stocks, we were living off our daily production." said Kerry Tattersall, director of marketing at the Vienna-based mint. The third shift was recently discontinued after the mint built up its inventory.
MJSAN FRANCISCO (Marke----tch) -- Apart from a New York City phone book listing, gold dealer Manfra, Tordella & Brookes, Inc. does no advertising. Lights are on all day because the shop sits in a basement.
Yet MTB, as the firm is known, has never been busier. Every day, people find their way to the Manhattan store with one thing in mind: getting their hands on gold bullion coins, as soon as possible and as much as possible, before the financial Armageddon they fear renders the dollars in their pockets worthless.
Welcome to the world of bullion coin investing, a business that has soared alongside the popularity of gold despite its disadvantages. The world's thirst for gold coins has risen more than sovereign government mints can quench it, with demand on track this year to outpace 2009, itself a record.
Bullion coin investing may cost youInvesting in bullion coins has risen alongside gold's popularity, catering to a small subset of investors who want physical possession regardless of how much more they may pay. Claudia Assis reports.
The coin craze is part of gold's growing investment allure, based on fears of currency debasement, inflation, a debt debacle in Europe, and rising debt levels in the U.S. But the boon has also brought the practices of some retailers in the industry to question, with at least two U.S. companies under investigation for allegedly misleading consumers.
Bullion run
Bullion coin investing caters mostly to a subset of investors who want physical possession of gold and regard anything else as lesser investments, no matter how much more they have to pay, ounce per ounce, over gold futures prices or the difficulties they are likely to face when unloading their bullion.
Long having captured the hearts of a few in the periphery of the investment world, gold has won over some of Wall Street's elite. Investment stars such as Paul Tudor Jones, of giant hedge fund Tudor Investment Corp. and John Paulson, of Paulson & Co., all have invested heavily in gold in recent years.
Investing in bullion coins is not to be confused with investing in collectable coins, although both are manufactured and sold by mints across the world. Bullion coins are valued entirely for their metal content, not for their collectible value or the denomination hammered on them. For many, they are an affordable and portable way to invest in gold.
It's no coincidence that May was one of the best months in recent memory for the bullion coin business, and gold in general. It was also the month that concerns about a European debt crisis reached their highest note, and gold hit its first nominal record high since December.
"It's been unbelievable. May was phenomenal," with June sales and so far July a bit slower but still way above average, said Michael Kramer, one of the owners of MTB.
Precious-metals research firm GFMS estimated that 229 metric tons of gold coins were sold in 2009, up 22% from the 187 metric tons of 2008 and almost 70% from the 135 metric tons that moved in 2007.
"It looks as though we are going to surpass 2009," said Phillip Newman, research director of the U.K.-based firm.
The U.S. mint ran out of some bullion coins last year and in 2008, and the Austrian mint added a third shift to catch up on their stocks. In his Manhattan store, Kramer caters to about 45 coin buyers a day, up from fewer than 10 a day in previous years, as the firm's forte is wholesale.
MTB is one of only eight authorized firms in the U.S. able to purchase U.S. Mint bullion coins directly and sell them to coin shops nationwide and abroad. The U.S. Mint does not sell bullion coins to the public, as it does with commemorative and other coins.
Europe's Week Ahead: BP and Shell reportEuropean markets will get their first chance to react to the bank stress tests, with the latest earnings from BP, Royal Dutch Shell, Deutsche Bank and UBS all likely to be closely watched.
In addition to the new swarm of retail customers, MTB saw heightened interest from European coin retailers. "They couldn't find enough coins in Europe, and they were buying from us."
The Austrian mint, which, alongside Canada's mint and the U.S. Mint is a top mint by sales, had to add a night shift to its two day shifts to counter delivery delays of two to three weeks and depletion of stocks.
"We did run out of stocks, we were living off our daily production." said Kerry Tattersall, director of marketing at the Vienna-based mint. The third shift was recently discontinued after the mint built up its inventory.
Walker Proof Digital Album
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
0
Comments
I saw the article on MW. The scores of comments on that site for this article make fascinating reading.
Edited
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Good question. A couple-few weeks ago the Economist had an article on this. This is from memory, I'm probably missing one or more:
Demand:
reduced jewelry purchases in Asia
reduced/negligible industrial demand
massive increase in Western investment demand
Supply:world mine supply decreasing slightly YoY
central bank selling pretty much dried up
massive increase in salvage/jewelry selling- developing world and developed
Basically, prices at the margin are being driven by investment demand from the West.Massive scrap supplies in the first half of 2009 lead to over 1600 tons of additional gold supply that was eagerly absorbed by the market. There was a 62% increase from 4Q2008 to 1Q2009. And a net increase of 27% from 2008 to 2009. But this is no longer the case in 2010 as scrap supplies are now on a downtrend. The easy scrap has been picked off. That along with steady to declining mining supply leads to a deficit. Note that world gold mine production in 2008 was the lowest since 1995, not particularly bullish with gold having exceeded $1000 for the first time. The neglect done to mining infrastructure since the early 1990's is clearly shown. Bullion banks have also become net buyers for the first time. When they were sellers the annual GFMS reports included their selling in annual gold supplies. But as CB's have become net buyers during the last several quarters of 2009 the annual gold reports have not included the CB's in buying demand, a big oversight as they now add a couple hundred tons of gold demand per year.
With additional taxation, nationalization, and tree-hugging seeming to gain traction, it doesn't appear that the miners are going to increase supplies drastically any time soon. The build up in mining from the 1970's gold boom didn't appear until the mid-1980's, half a decade after the price went bust.
roadrunner
TD