Capital Gold Group Report: Investors Gobble Up World Gold Supplies

Gold fever is spreading around the world.

Mints are cranking out as many gold coins as they can to meet international demand by investors jittery over the global financial crisis.

The gleaming financial security blankets sport likenesses of Canadian maple leaves, pandas, musical instruments, eagles, buffalo, kangaroos and more, all denoting their country of origin.

 

 

"Right now, our stocks (of bullion) are down to zero," says Brian Kotila, manger of the Old 'N' Gold store on Fort Street. Bullion refers to precious metals in the form of coins or bars.

The store typically hears from about six people per month wanting to buy bullion or sell it. Now, four or five calls are coming in daily and they are "all wanting to buy," Kotila said yesterday.

Last week, two buyers each purchased a 10-ounce gold wafer, said Bob McDonald, who owns Old 'N' Gold and Barclay's Exchange Inc. on Douglas Street. Gold prices vary daily depending on the markets but each wafer would have been close to $10,000 in value.

"We are getting more calls from buyers than we can presently supply," said McDonald, who also buys gold jewelry to sell in the store and for melting.

Canadian Maple Leaf one ounce gold coins are currently worth about $900, depending on the market, he said.

London gold futures for December delivery closed yesterday at $839.50 US, down $3, below March's record high of $1,033.90 US an ounce. As for its future value, Peter Munk, chairman of Barrick Gold Corp., owner of the world's largest gold reserves, predicts that bullion prices will continue rising, pushed by large-scale purchases by "major, major" holders of dollars worried about the U.S. government's bailout plan impact on currency.

Gold buyers would include central banks and sovereign wealth funds wanting to diversify investments and hedge against a weaker U.S. dollar, he said.

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