Investors Purchasing Physical Gold after Prices Drop

With commodities and stocks reducing in value, gold prices dropped. This followed on the heels of speculations that it was likely that Greece would default. Gold prices fell by $6.000 when talks between bond holders and Greece did not end in an agreement. A €130 billion rescue package leans heavily on the two parties reaching a compromise.

Individual Investors Prefer Gold Coins

Investors are making the most of the dip in gold prices. They are purchasing coins made from this precious metal. Current trends indicate that individual investors are opting for this form of investment more than professionals. Coin collectors and investors entered the markets after the value of gold fell quite sharply at the end of 2011. Those new to investing in precious metals took their first steps in the market in December 2011. One of the key factors that encouraged people to invest was that dollar’s future does not look promising. Others invested in gold as they wanted to diversify their investments.

Highest Volume per Year of Gold American Eagles Sold

114,500 troy ounces of gold American Eagles were sold this month. This is the highest volume sold in a year. As the most popular bullion minted coins, the sale of American Eagles indicates the extent of demand for the precious metal. With gold prices at a low at the beginning of 2012, collectors’ gold coins had a lot of buyers. According to the sales and marketing director of Perth Mint, the sale of gold coins has gone up by 80% in December 2011 and January 2012, when compared to the same months in 2010 and 2011.

While individual investors show a preference for gold coins, professional investors opt for gold bars. One of the reasons for this is that gold bars have a smaller premium for every ounce. This is unlike gold coins which have to go through more fabrication than bars. Royal Bank of Scotland’s head of commodity strategy stated that investors’ interest in precious metals is generally indicated in the sales of coins.

According to metal traders, the price of gold was strengthened when the demand for physical forms of the metal increased early this month. Gold’s spot price has increased by 11% since the beginning of the year.