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cashinmattress

Royal Mint Doubles Production Of Gold Coins To Meet Surge In Demand

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Royal Mint doubles production of gold coins to meet surge in demand

Output climbed to 16,910 ounces from 8,030 ounces a year earlier, according to data obtained by Bloomberg News under a Freedom of Information Act request. First-half production jumped 86pc to 45,406 ounces, the figures show.

Demand for physical gold as a store of value and hedge against inflation has increased as governments spend trillions of dollars to combat the worst recession since World War II. Bullion holdings in gold-backed exchange-traded products rose to records in the second quarter. Gold is trading about 7pc lower than the record $1,032.70 an ounce reached in March 2008.

“There’s still interest in gold as a safe-haven asset,†said Stephen Briggs, an analyst at RBS Global Banking and Markets in London. “This whole sector will capture people who don’t have access to the futures market.â€

Individual investors typically buy gold coins, bars or shares in exchange-traded products. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were 1,120.55 metric tons on June 30, up 74pc from a year earlier. Investment in the fund, which reached a record 1,134.03 tons on June 1, was little changed from the first quarter.

The mint’s gold production in the second quarter, when the benchmark FTSE 100 Index of shares gained 8.2pc, fell 41pc from the prior three months. The index slid 11pc in the first quarter, its seventh straight retreat, helping to stoke demand for bullion as an alternative investment.

“Earlier this year, with the crisis, it led to huge uncertainty,†Briggs said. “Things have come off the boil a little bit. There’s not quite that urgency, but there’s still a sense that there’s inflation and uncertainty around the corner.â€

The UK mint moved to Llantrisant in Wales from London’s Tower Hill in 1968, three years before Britain switched to a decimal currency system. It makes coins including the 22-carat 2009 Gold Proof Sovereign, weighing 7.99 grams (0.26 ounce) and costing £299 ($503), according to the government agency’s web site.

The mint’s use of silver declined 60pc from a year earlier to 32,629 ounces in the second quarter, the figures show. First-half production fell 35pc to 107,423 ounces.

And of course this is not going un-noticed. Sale of Sov's is currently tax free, and the chances are that this asset will keep rising in value. This does not bode well for a failing politico and nosediving tax intake.

Will we see some draconian measures put in place to stop the citizens from hoarding this type of wealth? Taxes, restrictions, penalties?

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I'm so glad that half a year ago I never bought a room full of beans. Never bought gold either.

Starting to think I should use a few £k (Maybe £4k, wouldn't get much for it tho) to get some gold. Not sure - I don't know enough about this sort of thing. Would be just as well off paying off my student loan using that money.

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Royal Mint doubles production of gold coins to meet surge in demand

And of course this is not going un-noticed. Sale of Sov's is currently tax free, and the chances are that this asset will keep rising in value. This does not bode well for a failing politico and nosediving tax intake.

Will we see some draconian measures put in place to stop the citizens from hoarding this type of wealth? Taxes, restrictions, penalties?

Interesting point.

People who buy gold do so as a hedge against catastrophe.

They haven't thought things through that well if they buy gold coins issued by the Royal Mint and hold them in Britain. Bars in a valut in Switzerland are a better bet.

As you imply, financial catastophe that gold is supposed to hedge against will bring about social and political catasophes that might render the hedge ineffective.

If you are hedging against a very low probability but very high impact event, it is worth taking that last step to make your hedge as effective as possible.

Edited by LuckyOne

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Guest Daddy Bear
Interesting point.

People who buy gold do so as a hedge against catastrophe.

They haven't thought things through that well if they buy gold coins issued by the Royal Mint and hold them in Britain. Bars in a valut in Switzerland are a better bet.

As you imply, financial catastophe that gold is supposed to hedge against will bring about social and political catasophes that might render the hedge ineffective.

If you hedging against a very low probability but very high impact event, it is worth taking that last step to make your hedge as effective as possible.

so not gold... not shares..............hmmm what do you do with all that cash if you're just an average joe..or pensioners...etc...etc..

Hmmmmm........ i wonder?

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so not gold... not shares..............hmmm what do you do with all that cash if you're just an average joe..or pensioners...etc...etc..

Hmmmmm........ i wonder?

On the contrary, I am saying gold held in the right form and right place as a part of a rational person's portfolio (10% to 15% is about right).

Shares have their place as do Linker ETFs.

I accept what you are saying about the "Average Joe". I think that he needs to educate himself to understand that house prices collapse in nominal terms during deflationary times and collapse in real terms during inflationary times and to learn about other assets. Relying on an advisor or friends and family to do this is pointless. We need to take individual responsibility for our own finances.

As none of know what will actually happen in the future (no matter strongly we hold our convictions), anyone who believes that there is a higher likelihood than normal of either extreme in price changes occurring (as I do) should not waste money on a house when there are better ways to minimize the losses in real and nominal wealth if we are in for an extreme event with respect to the general price level.

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Investment strategy doesn't really matter as long you diversify. Don't fall into the obvious peril; outlined in this old, time tested and proven moniker:

Don't put all your eggs in one basket!

Too bad all the property chumps took no heed of it.

Edited by cashinmattress

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Investment strategy doesn't really matter as long you diversify. Don't fall into the obvious peril; outlined in this old, time tested and proven moniker:

Too bad all the property chumps took no heed of it.

Exactly.

The other age old wisdom is that leverage can kill.

A lot of people ignored that risk too ......

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