UK mint gold coin production up 75 percent

Section:

By Thomas Biesheuvel and Nicholas Larkin
Bloomberg News
Thursday, May 7, 2009

http://www.bloomberg.com/apps/news?pid=20601102&sid=aohCdbLOY3BU&refer=u...

LONDON -- The Royal Mint, established in the 13th century, used 75 percent more gold in the first quarter amid a surge in demand for bullion to diversify investments.

The U.K. mint made 28,496 ounces of gold coins in the quarter, compared with 16,317 ounces a year earlier, according to data obtained by Bloomberg News under a Freedom of Information Act request. Production last year rose 30 percent to 53,089 ounces, the data show.

Demand for gold and exchange-traded funds linked to the metal accelerated as equities collapsed and governments spent trillions of dollars to combat recessions. The Austrian mint, Muenze Oesterreich AG, sold a record 1.5 million ounces of gold last year, while the U.S. Mint’s sales of 1-ounce American Eagle gold coins more than quadrupled in January to 92,000.

"People are worried about their savings and banks, and a lot of people realize it's a safe-haven asset," said Mark O'Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin. "Very few people are selling."

Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, has expanded to 1,104.45 metric tons, overtaking Switzerland as the world's sixth-largest gold holding. Gold has advanced for eight consecutive years, the longest winning streak since at least 1948, according to data compiled by Bloomberg.

The Royal Mint is now based in Llantrisant, Wales. Its 2009 Gold Proof Sovereign coin, made from 22-carat gold and weighing 7.99 grams (0.26 ounce) sells for 299 pounds ($450), according to the government agency’s Web site. Gold for immediate delivery averaged $904.18 an ounce this year, compared with $872.25 an ounce last year.

The Mint's use of silver declined 10 percent to 74,793 ounces in the first quarter, the data show. Production last year fell 14 percent to 240,759 ounces. The metal fell 23 percent last year in London.

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