Perth Mint working flat-out on weekends to satisfy gold rush
Australia's Perth Mint, which refines nearly all the nation's bullion, said demand has jumped to the highest level in five years after prices plunged, with the factory kept open through the weekend to meet orders.
There has been strong interest, including from the US, with buyers speculating the metal will rebound from the decline, Perth Mint's sales and marketing director Ron Currie said.
Bullion plunged 14 per cent in the two sessions to April 15, the most since 1983, spurring buyers to boost physical holdings.
Billionaire John Paulson, the biggest investor in the largest exchange-traded product backed by bullion, reiterated his bullish view on prices.
Coin sales by the US Mint are set for the highest month since December 2009, while premiums to secure supplies in India rose to five times the level before the slump.
"We haven't seen levels like this since the 2008 global financial crisis," Mr Currie said. "Compared to March sales, April sales have doubled or tripled."
Gold for immediate delivery fell 0.7 per cent to $1465.10 an ounce on Tuesday. While prices have gained 11 per cent from a two-year low on April 16, they are still heading for the biggest monthly loss since December 2011.
Increased physical purchases may help to offset declining holdings in exchange-traded products, which are on course for a record contraction in tonnage terms this month, according to data compiled by Bloomberg. Holdings have contracted 168 tonnes in April as prices entered a bear market.
The US Mint said on April 23 it suspended sales of coins weighing a 10th of an ounce after demand more than doubled from a year earlier. The US Mint has sold 209,500 ounces of gold coins so far in April, up from 62,000 in March. The UK Mint said purchases tripled in April.
"We worked all weekend to keep the factory running to make more stock - and that was only to fill orders," Mr Currie said. "We're being inundated with people buying products."
Mr Paulson told clients that central-bank buying and demand in Asia would support the metal in the near term, according to a letter from Paulson & Co. The hedge fund manager began investing in gold in 2009 for protection against eventual inflation and currency debasement as central banks pumped an unprecedented amount of money into the global economy.
"We're seeing people are coming into the market because the price has come down; they think they can afford it now and expect that it will go up again," Mr Currie said. "The US has got the money to purchase metal and is doing so as a hedge. It's extremely busy for us in the US."
Russia and Kazakhstan boosted official gold reserves for a sixth month in March, while central banks are predicted to buy as much as 550 tonnes this year after increasing holdings by 534.6 tonnes last year, the most since 1964.