Gold demand a tasty treat

Are we in the opening days of a new gold buying boom?

We could be. Headlines of the Mint’s November gold sales can easily be interpreted that way as I scan the Internet.

But are the headlines correct?

As every chef knows, how you present the food both in look and service determines to a large degree how much the diner will enjoy it.

Gold investors should be more hardheaded than that, but news headline writers can often sway how statistics are interpreted simply by choice of words.

The U.S. Mint sold 129,500 1-ounce gold American Eagles in November. Headlines and stories have trumpeted the fact that this is triple what was sold in November 2011.

This comparison is absolutely true.

However, the November 2011 numbers were the lowest of that calendar year.

It could be correctly pointed out that the November 2012 sales number is the highest for 2012 so far. Only the January figure of 84,500 is anywhere near the current number.

But if we point out that 594,000 of these gold coins have been sold so far in 2012 compared to 844,500 during the first 11 months of 2011, you can say that gold demand is awfully weak.

So what do we have, a strong gold bullion coin market demand situation or a weak one?

I wouldn’t want to bet my future on just one month’s numbers, but I can report that because of the high November demand for gold coins that the Mint has increased its planned 2012 production of 1-ounce and tenth-ounce gold coins because of the November surge.

This is significant because we are at the time of year when 2013 production starts and adequate supplies need to be available for the annual January surge in demand when both bullion buyers and collectors want examples of the new date.

So it would seem that no matter how the U.S. Mint’s November gold coin sales numbers are served, on a fine china plate or a diner’s platter, they are a tasty treat.

Buzz blogger Dave Harper is editor of the weekly newspaper "Numismatic News."