Gold’s lackluster performance is turning off coin buyers, with sales at the U.S. Mint heading for the biggest annual drop in eight years.
Purchases of American Eagle gold coins reached reached 524,500 ounces in 2014, down 39 percent from 856,500 ounces in 2013. In December, sales fell almost 70 percent from a year earlier.
Gold prices are little changed this year, trailing advances for equities, the dollar and Treasuries. Gains for the U.S. economy cut demand for a store of value, while a collapse for oil futures signaled inflation will stay low.
“People wanted to be in assets that were winning,” George Gero, New York-based precious metals strategist who helps manage $500 million at RBC Capital Markets, said in a telephone interview. “There is very little interest in gold and we have seen interest in gold decline through the year.”
Holdings in exchange-traded products backed by gold have dropped to the lowest since 2009, with about $6.3 billion wiped from the funds this year. Open interest in New York futures and options dropped 5.3 percent in 2014, set for a second straight annual loss and the biggest slump since 2011, U.S. government data show.
While gold-coin sales fell, purchases of silver coins rose to a record 44 million ounces this year, mint data show.
“Slow sales of coins is reflective of complete lack of interest in the gold market,” Frank McGhee, the head dealer at Alliance Financial in Chicago, said in a telephone interview. “Silver was the bright spot this year for coin sales, but it’s very difficult to say if the momentum will sustain.”
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