Gold ‘Panic’ Buying Ends, Reducing Austrian Coin Sales by 80%

March 19 (Bloomberg) -- Muenze Oesterreich AG, the Austrian mint that makes the best-selling gold coin in Europe and Japan, said sales have fallen 80 percent this year after buyers began to regain confidence in the global economy.

“We’re getting back to business as usual rather than the hectic, panic demand we’ve seen over the last couple of years,” Vienna-based Marketing Director Kerry Tattersall said late yesterday in an interview.

Sales of all gold coin types fell to 53,930 ounces in the first two months of 2010, compared with 267,091 ounces in the same period a year before, he said. Gold bar sales fell 74 percent to 69,636 ounces. Muenze Oesterreich minted a record 1.04 million ounces of gold coins in 2009, including 903,047 of its top-selling 1-ounce Philharmonic coins.

Speculators turned to gold as a haven last year after the worst financial crisis since the Great Depression shook confidence in equities and currencies. The metal’s fourfold rally since the end of 2000 has attracted investors including John Paulson, Paul Tudor Jones and David Einhorn.

“There’s no more upward surge in gold price to titillate buyers,” said Tattersall, who retires this year after more than two decades with the mint. “A lot of people feel more relaxed about the economic crisis.”

Gold declined, paring its best weekly performance in a month, as a stronger dollar eroded the precious metal’s appeal as an alternative investment. Bullion for immediate delivery fell as much as 0.5 percent to $1,122.10 an ounce in London, and traded at $1,124.05 at 8:33 a.m.

American Eagle

The metal has dropped from a Dec. 3 record high of $1,225.56 after recovering economies helped push up the dollar. The Washington-based International Monetary Fund increased its forecast for world economic growth in 2010 to 3.9 percent in January, from 3.1 percent in October.

Tattersall, a Sydney native who helped introduce the Philharmonic in 1989, said the gold price has “established” itself at more than $1,000 an ounce. Austria lost market share to the Canadian Maple Leaf coin last year and is the world’s No. 3 producer of gold coins, he said. The American Eagle 1-ounce coin is the top seller.

Japan is “shell-shocked from the performance of their economy” and customers have cut back on gold purchases, Tattersall said. Muenze Oesterreich AG sees “a certain amount of saturation” among Japanese gold buyers.

For the whole of 2010, Tattersall said he expects the mint’s sales to fall to 2006 levels, without providing figures. Austria’s mint says it supplies about a fifth of the global gold-coin market and makes about half of all gold coins sold in Europe.

Sales of silver and coins made from niobium are holding up, Tattersall said at the former Habsburg palace in Vienna where the 800-year-old company mints coins.

The niobium coin, with a 25-euro face value, “created a minor sensation in the coin collecting market,” Tattersall said. The coin has a retail value of 48.40 euros ($65.90).

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net.

Last Updated: March 19, 2010 06:08 EDT