Gold Coin Sales Keep Falling as Investors Buy Bullion Exchange Traded Funds

Humans have been hoarding shiny flecks of gold for ages, but investors are beginning to shift from physically stashing away gold under their mattress to gold-related exchange traded funds.

U.S. Mint’s gold-coin sales have fallen 25% from 2011. It was the third straight year of declines.

In contrast, gold in global gold exchange traded products rose about 44% over the past three years as investors sought an easy way to hedge against inflation, the falling dollar or even a breakdown in the financial system.

The demand for gold futures has also lifted gold prices to their 12th consecutive annual gain. Gold currently sits at about $1,680 an  ounce. Consequently, some observers believe that the higher cost of gold has constrained physical gold coin hoarders. It was much easier to buy gold coins when gold was a couple of hundred bucks.

On the other hand, investors can now choose among a variety of physically-backed gold Exchange Traded Funds, including SPDR Gold Shares (NYSEArca: GLD), iShares COMEX Gold Trust (NYSEArca: IAU), ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and ETFS Physical Asian Gold Shares (NYSEArca: AGOL).

“The ETFs are appealing because they are an investment product as opposed to a physical product,” Nolan Watson, president and chief executive officer of Sandstorm Gold Ltd., said in a recent article. “If you buy ETF shares, you don’t have to hide them under your mattress or bury them in your back yard.”

Source:  Tom Lydon and Max Chen, ETF Trends

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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