American Eagle gold coin 2012 sales down but outlook bright

Thu Jan 3, 2013 5:35pm EST

* American Eagle gold coin sales hit lowest in 5 years
    * Demand from Sept. to Dec. up almost 40 pct yr-over-yr
    * US fiscal crisis, election uncertainties boost safe havens

    By Frank Tang
    NEW YORK, Jan 3 (Reuters) - Sales of U.S. American Eagle
gold coins in 2012 were the weakest in five years despite a
strong finish, hurt by declining price volatility and an
improving U.S. economic outlook, dealers said.
    Investors bought 753,000 ounces of American Eagles produced
by the U.S. Mint last year, 25 percent below 2011 sales of 1 
million ounces, data from the Mint's website shows.
    It was also the lowest annual American Eagle gold coin sales
since 2007, and the first time sales dropped below the 1 million
ounce mark since 2008, during the worst global economic crisis
since the Great Depression.    
    Increased gold selling ahead of U.S. tax increases in 2013
and flat demand had prompted the Mint to lower coin output, said
Edmund Moy, chief strategist of Morgan Gold, which offers U.S.
retirement accounts that include precious metals coins and bars.
    Easing fears about the European debt crisis and signs of
recovering U.S. job and housing markets also lessened demand for
hard metals as a safe haven from economic turmoil.    
    In 2012, gold ended up 7 percent for a 12th consecutive
yearly gain. A steadier market with less volatile price swings
dampened bullion buying interest by investors and speculators
alike, coin dealers said.
    Competition from gold-backed exchange-traded funds and
bullion coins such as the Canadian Maple Leaf and South African
Krugerrand also affected U.S. demand, dealers said.
    Still, last year's gold coin sales exceeded the ten-year
annual average of 676,000 ounces from 2002 to 2011, Mint data
shows.  
    
    STRONG PERFORMANCE IN LATE 2012 
    In just the last four months of 2012, however, sales of the
U.S. gold coins rose nearly 40 percent year-on-year on
safe-haven demand due to political and economic uncertainties.
    "The U.S. election played a big role. And then we had the
'fiscal cliff' and everybody jumped on the bandwagon," said
Terry Hanlon, president of Dillon Gage Metals, one of the
largest U.S. bullion dealers.
    Hanlon said the pace of buying at the start of the new year
was brisk. So far in the first week of 2013, the Mint has sold
57,000 ounces of American Eagles, its website shows, on track to
be one of the strongest monthly sales on record.
    The Mint shut its 2012 coin production in early December so
it could start minting the new year's edition, which is usually
highly sought after by coin dealers and collectors.
    
            Gold American Eagle coin sales (in ounces)
 Jan. 2012                   127,000
 February                     21,000
   March                      62,500
   April                      20,000
    May                       53,000
   June                       60,000
   July                       30,500
  August                      39,500
 September                    68,500
  October                     59,000
 November                    131,000
 December                     76,000
 
 (Editing by Steve Orlofsky)
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