If Australia’s Perth Mint is any indicator, demand for both gold and silver skyrocketed in September. During a month in which gold climbed over $80, to 1780, and silver rose about $3, to about 34.70, the Perth Mint reported more than twice the previous month’s sales in gold, and almost four times August’s sales in silver.

Since the Perth Mint hasn’t provided monthly reports until this year, it’s difficult to gauge how this compares to last year. However, in the last six months the highest month for gold was 44,619 ozt, back in June. This compares to September’s whopping 81,095 ozt gold bullion sold.

Silver is much the same, with the highest month being back in March when they sold 590,636 ozt. Last month sales surged to a massive 1,251,580 ozt.

It’s difficult to say how much of this is marketing and how much is demand. Obviously there was some increased demand in precious metals, as reflected by the increase in prices. However, on September 3 the Perth Mint released the new 2013 dated coins, including special mintages of the 2013 Year of the Snake coins. The 2014 Australian Kookaburra silver coins were made available during this time as well.

We see much of the same thing at the beginning of each year here in the U.S. New coins are released, resulting in a surge of buying activity as collectors attempt to get a piece of the “first strike” pie. The advantage can be anywhere from a few bucks to several hundred dollars per coin, depending upon mintage and specific coins.

While metals have consolidated in the past couple of weeks, we should view this as a healthy contraction that should see us move upward into the end of the year. We might see new lows in the next month, offering new buying opportunities with every dip. However, many analysts are expecting what’s been affectionately termed the “Santa Rally” in December.

With this in mind, investors might start picking targets now, in case we see these higher prices toward the end of the year. Speculation regarding where prices will go in 2013 abounds. Some say it depends on who wins the election. Others expect a retraction from the Santa Rally. Historically January is relatively flat, with lower prices coming into February.

For long-term holders, we continue to see current prices as a buy, even if silver dropped off by a few bucks. The long-term outlook is simply too high to not be at least partially invested at this point. We can say the same for gold, though it might not have the upside potential we expect from silver due to the lopsided ratio between the two over the past few years.

For your prosperity,

J. Keith Johnson
The Gold Informant