American Eagle Gold Coin in Short Supply?

Did you buy any gold coin recently? I didn’t, but it looks like there’s some kind of shortage of gold coins.

Gold has gone through a volatile period lately as the U.S. dollar rebounded strongly against the Euro and commodities, including oil and precious metals, posted sharp decline. Traders abandoned gold as a hedge against the dollar, causing the bullion to reach a 8-month low of $786 an ounce on August 15th. However, gold didn’t stay in the sub-$800 territory for long. After a government data released on August 19th showed U.S. wholesale inflation jumped 1.2% in June due to soaring energy cost, the fastest pace in 27 years, gold started to recover. In two days, gold gained more than $45 to close at $833.85 today.

Though we don’t know whether this is a temporary bounce or the signal of a real recovery (gold reached $1,011/ounce on March 17th), the big drop in gold price last week did generate strong demands for the bullion. In fact, the demand was so strong that the U.S. Mint has temporarily suspended shipment of the popular American Eagle gold coins to bullion dealers, according to a Reuters story today.

Well, I didn’t take advantage of the drop. Maybe I should have. No, I am going to buy another gold coin. I am thinking of buy some extra shares of Tocqueville Gold Fund [[TGLDX]], my investment in the precious metal.

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2 Responses to “American Eagle Gold Coin in Short Supply?”

  1. Amit |  Aug 22, 2008 at 2:53 am

    Maybe the reason is, in a falling market, it pays not to have any inventory, buying at 820 and selling it at 800 is just not profitable at a point.