UK Mint Increases Gold Production

Both interest in and demand for gold increases around the world.

Take a look at these highlights from a Bloomberg article by Thomas Biesheuvel and Nicholas Larkin:

>> UK’s Royal Mint more than quadrupled production of gold in the 3rd quarter

>> Gold is set for a ninth annual gain which would be the longest winning streak since 1948

>> Gold has gained about 29% this year while the dollar has decreased by 7.3%

>> Sales of American Gold Eagles more than doubled in the first 3 quarters to 954,000 ounces

>> Global gold demand climbed 10% in the 3rd quarter to 800.3 metric tons

>> The Austrian mint, the world’s largest marketer of pure gold coins, sold 1.9 million ounces so far in 2009 which is 23% more than all of 2008

>> Harrods, the London department store, began selling gold bars and coins for the first time in October

>> India bought 200 metric tons of gold last month followed by a smaller purchase by Maritius

>> Bank of America Merrill Lynch, Societe Generale SA and Barclays Capital forecast further purchases by central banks.

>> The UK mint’s use of silver increased 56% over the previous year

>> Bullion holdings in some exchange-traded funds have risen to records in recent months

>> David Russell, a director at Dublin-based brokerage and bullion dealer GoldCore Ltd., said in an interview, “There’s still a total lack of confidence in the financial system . Investors are seeing the benefits of diversifying into gold. Smaller investors are clued into the fact that inflation possibilities are a worry for the future. It’s a tangible asset, and its value can be quickly and easily realized. We’re seeing very good demand in the coin market. Many investors are aware that they’ve been poorly diversified over the past few years.”

To view the Bloomberg article, click on this link U.K. Royal Mint Quadruples Production of Gold Coins

Perhaps a key point in this article is “gold is a tangible asset.”

Corporations struggle and their stocks and bonds decrease in value. Those stocks and bonds – at least some of them – become worth only slightly more than the paper or digital memory they are printed on.

But, gold, the heavy metal with a deep yellow gleam, can be held. To many, that touch provides comfort and reassurance that they have a worthwhile asset instead of near worthless shares of stock.

By the way, on a side note, that 200 tons of gold purchased by India for $6.7 billion dollars would cost over $7.3 billion dollars this week.

Oh, and remember, while this global demand for gold is increasing, the gold production from raw ore is decreasing on a per ton basis.

The saga continues….just how high will the price of gold go with increased demand and dwindling supplies?