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Last Updated: Oct 28th, 2008 - 17:57:18 |
NEW YORK (Reuters) - The U.S. Mint said it must allocate the American Eagle bullion coins among dealers to cope with overwhelming demand as it resumed taking orders for the popular coins on Monday.
"The unprecedented demand for American Eagle gold one-ounce bullion coins necessitates our allocating these coins among the authorized purchasers on a weekly basis until we are able to meet demand," the U.S. Mint told its authorized American Eagle dealers in a memo dated August 22.
Last week, soaring demand forced the U.S. Mint to suspend temporarily sales of the American Eagles, creating a shortage in the one-ounce version of the coins, which are also available in other weights and denominations.
American Eagle gold coins have been popular novelties among collectors and investors since their introduction in 1986. The coins offer people an easy, tangible way to invest in the gold market, as opposed to buying an exchange-traded fund or other financial instrument.
Coin dealers from the United States and Canada reported a surge in buying of bullion coins and other gold products since prices plummeted from highs last month, contributing to supply fears.
The buying spree and the subsequent shortage of the Eagles have improved momentum in gold as market participants interpret it as a sign of increasing retail investor interest in gold and other precious metals.
The Mint said that it will equally divide its Eagles inventory available for sale each week into two equal pools, with the first allocated equally among all authorized dealers, and the second pool distributed according to the dealers' past sales performance.
Allocation will continue for the American Eagle silver bullion coins, another popular item, the U.S. Mint said.
In addition, the Mint said that it currently has inventory for American Buffalo one-ounce 24-karat gold coins, American Eagle gold fractional coins, including the half-ounce, quarter-ounce and 1-10th ounce, and American Eagle Platinum in all denominations.
Spot gold traded at $822 an ounce on Monday, sharply below its all-time high of $1,030.80 on March 17.
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