The Perth Mint, which refines nearly all the bullion output from the world’s second-biggest producer, sees rising sales this year as global concerns trigger demand for haven assets.
Uncertainty over the new leadership in the U.S. and concerns over bank debt issues in Europe, as well as a drop in prices and demand for special edition Lunar New Year coins, helped boost sales recently, said Neil Vance, group manager of minted products at The Perth Mint. About 80 percent of the mint’s coins and minted bars are exported to the U.S. and Germany, he said.
“Certainly in terms of geopolitical issues, we still see people moving into precious metals for that safe haven,” Vance said in an interview on Feb. 14 from Perth, Western Australia. “We still see upside for having a good end to our financial year.”
Bullion fell last quarter by the most in more than three years as stocks rallied following the election of Donald Trump as U.S. president, and as the Federal Reserve increased interest rates in December. The decline in prices saw an increase in gold coin and minted bar sales in December and January, Vance said. People also bought the rooster coin in conjunction with the Lunar New Year celebrated at the end of last month, he said.
“We had stronger-than-normal sales in the U.S. market and we had exceptional sales in China, so a combination of the Perth Mint brand and the design of the rooster coin made it a very popular coin,” said Vance, who’s been with the mint for 14 years.
Gold coin and minted bar sales jumped to 63,420 ounces in December from 40,096 ounces a year earlier, while January sales were at 72,745 ounces compared with 47,759 ounces in 2016, according to the Perth Mint website. Sales of coins, minted bars and medallions more than tripled to a record 16.22 million units in the 2015-2016 financial year ended June 30 from 5.08 million a year earlier, the mint’s annual report showed.
The uncertain environment following Trump’s inauguration last month and concerns over some of his policies including the ban on travel from seven Muslim-majority countries saw investors move away from riskier assets and gold rallying to a three-month high last week. Bullion for immediate delivery was at $1,236 an ounce on Thursday, and is up 7.7 percent this year.
The outlook for gold is “very positive” given the geopolitical tensions and the potential for inflationary pressures to start emerging, Jake Klein, executive chairman at producer Evolution Mining Ltd., said on a post-earnings conference call on Thursday. U.S. year-on-year inflation reached 2.5 percent for January, the fastest pace since 2012, Labor Department’s figures showed Wednesday.