American Eagle Gold Coin Sales At 11-year High

With faith in paper currencies plummeting around the world, gold in a number of forms is being acquired by investors, and for phyiscal gold, the one-ounce American Eagle gold coin enjoyed the highest sales for May in 11 years.

The U.S. mint said they sold approximately 190,000 American Eagle gold coins in the month, as an increasing shortage of physical gold coins has investors pouring into the market.

Not long ago when Germany agreed to be part of the bailout of Greece, German gold coin sellers ran out of product in about one day, as Germans have experienced a failed currency in the recent past, and many remember the effects it had on those unprepared for it.

Mints from around the world have said demand for gold coins has risen substantially, as well as for small gold bars. One reason for the smaller gold bars rather than larger ones is portability, which is considered if a crisis emerges which disrupts the economic system.

For retailers of any sort, they know May is one of the worst sales months of the year, and gold sellers are looking forward to a terrific summer if May is any indication of the growing demand out there.

While gold is sold in much higer quantities through other outlets, the growth of the physical gold market comes from the fears of a geo-political collapse, where money wouldn't do anyone much good.

J.P.Morgan's (NYSE:JPM) Gold Storage Facility

J.P.Morgan (NYSE:JPM) announced today it will be opening a new gold storage facility in Singapore in the latter part of 2010, built in response to growing demand from institutional and retail investors looking for a place to store their gold bullion.

A number of those holding physical gold bullion want or need multiple places to store their bullion, which a new one in Singapore will help meet those demands.

The new storage facility will also help serve the market dealing with physical settlement of futures contracts, which while including gold, will also help with other precious metals as well.

It'll also serve as a storage vault for exchange traded funds and other deals which involve physical settlement of gold or other precious metals.

SPDR Gold (NYSEArca:GLD) Record Bullion Holdings

SPDR Gold Trust

Gold bullion held by SPDR Gold Trust (NYSEArca:GLD) has reached record levels, as the exchange-traded fund added 9.7 metric tons of gold to its reserves, the highest ever held by the ETF.

Holding as of Thursday for SPDR stand at 1,140.43 tons after adding the physical gold to their holdings.

The increase in gold was the largest addition in over six months, and represented an increase of 0.9 percent.

SPDR said their net asset value stands at $42.09 billion.

China Giving Gold Prices Support

China and Gold Price Support

Even though there has been a pull back in gold prices lately, leading the usual clueless commentators to question gold prices going forward, China remains a solid customer of gold, and recent changes in their laws had freed up its citizens to acquire more jewelry and hold a bunch of physical gold.

Of course this is small potatoes compared to the inflation and safety factor being priced into investing in gold, and that isn't going to change for a long time to come.

But adding the physical gold freedom in China and you have even more reason for gold to continue to rise for years to come.

China and Gold Price Support

Physical Demand for Gold Increases Ahead of Indian Religious Festivals

Gold is expected to rise based on physical demand, as the Indian religious season is close at hand, and analysts have said the demand is so high at this time for finished products that refiners are having difficulty keeping up with it.

Even so, the major mover of gold prices, the U.S. dollar, is still expected to be the primary mover of gold prices, as many believe gold hasn't bottomed out yet, and until the U.S. dollar corrects, the yellow metal will struggle to make gains in any significant way.

Gold Rises on Oil Price Increase and Inflation Concerns

Gold went as high as $936.50 an ounce today before settling at $926.60/928.40 on the last quote in New York. That's a slight increase over Monday's close of $935.30/926.10.

Record-breaking oil prices continue to hold the gold market up, even as other economic data put downward pressure on the metal. Oil closed at $113.79 a barrel, up by $2.03.

Even so, there was some sell-off as prices for U.S. producers was better than expected. That makes it more possible the Fed won't cut interest rates at their next meeting.

"Oil is clearly a factor. Technically also, gold looks better because it broke through a weak trend line resistance," said Michael Jansen, analyst at J.P. Morgan Securities.

"But I think we will continue to consolidate. The recovery from under $900 is not hugely convincing and there are still concerns that the physical market is very subdued. Overall, we will tend to trade in the $900-$950 range for a bit longer."

With the India wedding season in full swing, physical demand for gold remains fairly strong, although high prices have kept other parts of Asia from buying.

Gold futures in the U.S. ended at $932 an ounce for June delivery, up by $3.30.

Sharia Law Now Governing New Gold Security

The announcement that Dubai Multi Commodities Centre and the World Gold Council have created a new company to launch an ETF gold security that will comply to Sharia law is fascinating, in that many people in the United States, for non-Sharia reasons, have looked to do similar things. I'm referring to the shares being backed by physical gold.

The fund, named Dubai Gold Shares, will trade on the Dubai International Financial Exchange once approval is garnered from the Dubai Financial Services Authority.

The World Gold Council is an industry body that is funded by the top gold mining companies in the world. The WGC, along with the DMCC didn't reveal their stake in the joint venture.

As far as the gold bars backing the shares go, they will be of Dubai and London Good Delivery Standard, and will be placed in the vaults of DMCC, and a sub-custodian, HSBC.

Dubai Gold Shares will be denominated in U.S. dollars.