Gold buying trend - relation to growth of GI's : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Here is a link to an interesting article on the gold market.

February 24, 1999

Y2K Bug Is a Goldmine for Bullion Market

Predictions for possible consequences of the Year 2000 bug have ranged from the ludicrous to the bizarre.

Few analysts, however, could have foretold that the seemingly simple computer glitch would result in an unprecedented boost for the world's bullion market.

As fear of the millenium bug spreads globally, some consumers are taking precautionary measures and converting a portion of their assets into gold. People all over the U.S. appear to be out on an extended gold-buying spree.

"Gold Demand Trends," the quarterly publication of the World Gold Council, an organization of the world's gold producers, reveals a significant rise in the demand for gold.

As per their statistics, sales in the U.S. increased by 19 percent in the third quarter of 1998 as compared to the same period in 1997. The demand for jewelry is also up six per cent, but the big surprise comes from coin sales -- in 1998, investment soared by a whopping 133 per cent to tip the scales at 50.3 tons.

George Milling Stanley, World Gold Council's manager for Gold Market Analysis, attributes this phenomena to three reasons: the low dollar price of the precious metal, high reinvestment of profits from stocks sold, and -- amazingly -- the Year 2000 computer glitch.

"I don't know the truth of it, but Y2K problem seems to be contributing,'' Stanley says. "From coin dealers in the U.S. we learn that there is a lot of imbalance in their deliveries, a lot of coins are going to Silicon Valley, the heart of the computer industry in the U.S."

David Madge, who supervises gold bullion sales in North America for the Royal Canadian Mint, reinforces the idea that apprehension about the possible consequences of the Year 2000 bug is contributing to climbing gold sales.

According to Madge, the mint's total sales of Maple Leaf gold coins have risen from 538,000 ounces in 1997 to 650,000 ounces sold so far this year -- a growth rate of over 20 per cent. He even claims to know of a U.S. resident who coughed up $15 million for 50,000 ounces of Maple Leaf gold coins. "That sale was directly related to Y2K," he said. "It's pretty serious business."

The Bank of Nova Scotia, which has a big retail gold business, also reports rising sales of small coins and bars. George Parrill, director of ScotiaMocatta Precious Metals, feels that buyers are no longer limited to Y2K fringe groups, although such groups have definitely made a significant contribution to the business.

Aside from arousing academic interest in the spin-offs of the Y2K problem, this trend underscores the fact that widespread concern about the Year 2000 bug could result in economic problems if investors withdraw their money from banks all over the country.

With just a year to go for the millenium to roll over, it looks like we're heading for this century's Gold Rush.

Any thoughts?


-- Mike (, February 25, 1999


As always, take care of heat, water and food issues first. Barter items come second.

Gold and silver are a way of preserving any extra wealth after the basics have been taken care of. It is hard to say, though, if the price of gold will go up much. Deflation right now seems to be more of a threat than inflation.

The interest in gold right now is more in gold coins than in bars of gold.

I've also heard that sales of junk silver coins started going way up in December.

-- Kevin (, February 25, 1999.


1/10 oz Golden Eagles went up yesterday $4.20 each. Personally I am buying silver like a starved man after food. Warren Buffett has purchased 129.7 million ounces and is still buying and so will I. According to the posters at forums and precious metals are getting ready to breakout. The people that post at those forums are mostly professional PM traders. Today according to a post I read but have not yet verified, Silver Eagles went up $2.20 apiece. Its happening and I'm glad I am, and have, gotten in before the herd.

May GODS Will Be Done


-- flierdude (, February 25, 1999.

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