This Month in Gold – December 2013

US Mint Silver Coin Sales Hit Yearly Record
Bloomberg – By the second week of November, the US Mint’s American Eagle silver coin sales had reached 40.2 million ounces for 2013, a new annual record. The previous record was ~39.9 million ounces for all of 2011. Strong retail sales are attributed to lower silver prices since April and uncertainty created by the government shutdown in October. The mint will sell its last batch of 2013 coins on December 9th, which metals dealers suspect will push retail premiums higher.
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China Officially Surpasses India as Top Gold Consumer
CNNMoney – China has passed India as the world’s largest gold consumer, according to the latest World Gold Council data. China has bought 798 metric tons of the metal this year, while India bought 715. China’s total purchases are expected to surpass 1,000 metric tons by year-end. Strong Chinese demand is attributed to a growing middle class with greater disposable income. Also, Chinese stocks and property have under-performed relative to gold this year, driving greater demand for the metal. Indian demand was down 32% YoY in the third quarter due to government restrictions, while Chinese demand rose 18% YoY in the same period.
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European Refiners Recast Gold for Asian Demand
Bloomberg – The World Gold Council reported that larger bars of European gold are being refined into the smaller sizes preferred by Asian consumers. This is part of a trend, the Council has noted, of gold moving from West to East. European gold demand fell 11% in the year ending in September, while Asian and Middle Eastern demand climbed 30% in the same period. A 2,000-ton storage vault opened this month in Shanghai to accommodate growing Asian demand.
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Perth Mint Considers Expanding to Meet Demand
Wall Street Journal – The Perth Mint, one of the world’s largest producers of gold coins, is considering expanding its refining capacity to meet ongoing robust demand. Even operating its factory 24/7 on weekdays and throughout the weekend, it still sold out of 1-ounce silver and gold Australian Lunar coins in just one month. Sales and marketing director Ron Currie attributes the strong demand to consumers believing the gold price has bottomed. Germany is the mint’s largest buyer, though Chinese demand is increasing – with the mint now the largest foreign importer of gold into the PRC. The mint currently refines 10 million ounces of gold per year. The timeline and size of expansion remains unknown. 
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