(Kitco News) - As investors flocked to gold in search of a safe haven amid market turmoil, coin sales soared last month, according to the latest U.S. Mint data.
In January, the mint sold 124,000 ounces of the American Eagle gold coins, up 53.1% from sales during the same period last year, and its highest level since September.
Meanwhile, American Eagle silver coin sales reached their highest level since January 2013 at 5,954,500 ounces last month, up 7.68% year-over-year.
However, despite higher Eagle sales in January, American Buffalo gold coin sales were lower. The Mint’s data showed that 34,000 ounces of the Buffalo coin were sold last month, down 1.45% from the same month last year.
Analysts were expecting demand to pick up early in the year as they expected lower gold and silver prices to attract more retail investors. However, since the start of the year, both gold and silver prices have been rising on the back of market uncertainty.
Gold futures managed to push back above the key $1,110 level and rise a little over 5% in January as investors searched for a safe haven amidst market turmoil. At the same time, the metal hit a high of $1,128 an ounce, a level last seen in November. April Comex gold futures were last quoted up $9 at 1129.40 an ounce.
Despite being a little more volatile than gold, silver futures also posted gains of roughly 3.1% last month. After hitting a high last seen in early December, silver futures settled the month lower at $14.243 an ounce. Silver Comex march futures were last quoted up $1.70 an ounce at $14.26.
In January, analysts at Barclays said they were expecting higher coin demand in January due to the fact that “some demand in December was postponed to January, as most coins had been sold by the end of November 2015.”
Erica Rannestad, senior analyst of precious metals demand for Thomson Reuters GFMS, told Kitco News that she expects coin demand to continue to rise this year. For one, she said, demand growth in the first half of 2015 was “lackluster,” down roughly 2% year over year, which should push retail demand higher.
“This year, there is increased physical demand on the back of relatively lower prices, increased investor interest in safe-haven assets due to rising uncertainty about economic growth in China and emerging economies, and the looming U.S. presidential election, which is expected to add turbulence to investor expectations for the U.S. economy,” she added in an email response Monday.
Not only has domestic retail demand been healthy so far this year, but globally as well with the Perth Mint posting positive year-over-year coin sales. “The Australian mint likewise reported a substantial plus in gold coin sales in January to 47,800 ounces,” noted analysts from Commezbank in a research note Monday.
Likewise, analysts at Barclays said they expect coin investment demand in China to rise this year. “We expect gold coin and bar investment demand to continue growing in 2016, as equity sentiment is still weak, CNY is expected to depreciate further and the WMP (wealth management products) sector cools,” they said in a research note last week. “We forecast coin consumption to reach 25 tonnes and bar investment to reach 218 tonnes, both rebounding to 2012 levels, up 15% and 18% y/y, respectively, compared with 2015.”
By Sarah Benali of Kitco News; sbenali@kitco.com
Follow me on Twitter @SdBenali
