Gold Coin Demand in H1 2012 Shows Fundamentals Driving Current Demand

By Dr. Constantin Gurdgiev

Based on data from the US Mint we can now update H1 2012 figures for sales of the US-minted gold coins. As the background – new coins issued by the US Mint, in my opinion, represent a much more fundamentals-linked asset as the demand for these coins differs, if only subtly, from the demand for gold as an asset:

* Coins are purchased by long-hold collectors;

* Coins are easier to purchase and store than gold bars, attracting more demand from savers, rather than speculative investors; and

* Coins are used frequently to store inter-generational wealth and start family savings schemes

* All of this means that correlations between demand for coins and gold price should be less pronounced and that is exactly what we observe throughout the historical and current data:

So with that in mind, what should we expect from the gold coins sales. (Cont.)

Full text is available on Dr. Gurdgiev’s blog, True Economics

Mark OByrne

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