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U.S. Mint Plant Halts Gold Coin Output Just as Demand Is Surging

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The clamor for retail investors to get hold of precious-metals coins is about to get more urgent.

The U.S. Mint said Wednesday it’s temporally halting production at its West Point facility in New York because of the risk to employees from the coronavirus. The site makes gold, silver, platinum and palladium coins which are sold through a network of distributors.

The shutdown comes as convulsive swings in financial markets spur a surge in demand among retail investors for precious metals as haven assets. Last month, the Mint said it sold out of American Eagle silver coins, while the gold coins it offers were snapped up in March at the fastest pace in over three years.

“The timing is awful,” said Everett Millman, a precious-metals specialist at Gainesville Coins in Florida. “It’s going to exacerbate the supply shortage” in the coin market when demand is soaring.

Premiums for gold coins are at 5%-10% over spot gold, compared with less than 1% in normal circumstances, Millman said. Gold for immediate delivery slipped 0.6% to settle at $1,717.03 an ounce on Wednesday.

The jump in coin sales, along with a record high this week for holdings in exchange-traded funds backed by gold, suggests buyers are seeking physical metal amid the turbulence in equities.

Coin investors bought most gold in over three years amid rush for havens

The Mint had previously redirected some silver bullion production to its Philadelphia facility, Michael White, a spokesman, said in an email. During the temporary suspension of operations at the West Point facility, it will continue to make American Eagle and America the Beautiful silver bullion coins available to its network of authorized purchasers. American Eagle and American Buffalo gold coins will not be available, White said.

 

Read Original Article at bloomberg.com

 

 

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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