UPDATE 1-US Mint halts some American Eagle coin production
(Adds details, background, gold price)
By Frank Tang
NEW YORK, Oct 7 (Reuters) - Unprecedented demand for precious metals and volatile markets forced the U.S. Mint to cease production for the half-ounce and quarter-ounce popular American Eagle gold coins for the rest of this year and to supply other bullion coins on an allocation basis.
"Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high," the U.S. Mint said Monday in a memorandum to its authorized coin dealers.
"The U.S. Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the U.S. Mint to focus remaining bullion production primarily on American Eagle Gold one-ounce and Silver one-ounce coins," the Mint said.
The Mint said it would continue to supply one-ounce American Eagle gold coins and one-ounce American Eagle silver coins on an allocation basis to coin dealers.
For half-ounce and quarter-ounce American Eagles, the Mint said that inventory was depleted last week and no more coins would be produced for the rest of 2008.
In addition, the Mint said it would produce 1-10th ounce Eagles based on current coin blank supplies, but would cease production for the rest of this year once the remaining inventory was depleted.
Produced from gold mined in the United States, the 22-karat American Eagles have been novel items among collectors and investors since their introduction in 1986. Each coin has a face value of $50 but it is sold by authorized dealers at a premium to the price of gold.
AMERICAN BUFFALO, AMERICAN EAGLE PLATINUM
The Mint said it would continue to supply 24-karat American Buffalo one-ounce gold coins based on current blank supplies, but would halt production once the remaining inventory was out.
The Mint had suspended sales of the Buffalos in late September due to strong demand and inventory depletion.
Similarly, the Mint said that all denominations for American Eagle platinum bullion coins were depleted last week, and it would halt production for the rest of the year once the remaining inventory was depleted.
Coin dealers from the United States to Canada have recently reported a surge in buying of bullion coins.
Gold has soared as much as $200 in the last 30 days as panic investors flocked to gold as a worsening global financial crisis prompted people to seek a safe haven.
Spot gold <XAU=> traded at about $884 an ounce on Tuesday, while the gold contract for December delivery GCZ8 on the COMEX division of the New York Stock Exchange was at $886 an ounce. (Reporting by Frank Tang; editing by Jim Marshall)
© Thomson Reuters 2008 All rights reserved
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