Spain approves $43 million to expand its gold coin options amid surging demand
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) The Spanish government approved up to 40 million euros (USD $43 million) in its new budget for minting high-quality gold coins following a surge in demand.
The Spanish National Coin Factory (FNMT) can use the money to buy gold for the coins. The goal is to have more gold coins available for investors seeking safe-haven assets during times of uncertainty and high inflation, Spanish finance newspaper Cinco Días reported.
The 40 million euros is an unusually high amount for Spain. In the past, the approximate budget was around 10 million euros. The amount approved this time is based on estimates of the cost of contracts and expected demand based on 2021 and 2022 numbers, Cinco Días noted.
According to reports, the National Coin Factory will use the budget to buy high-quality unminted one-ounce gold and mint the coins themselves, allowing for orders to be placed in advance and guaranteeing availability.
Spain began minting gold coins via this scheme in 2021. The first minted gold coin was dedicated to the Iberian Lynx and had a circulation of 12,000 units. Another popular coin was Toro, with a maximum circulation of 15,000 units. The coins are sold nationally and internationally.
Bullion coins have seen a massive surge in demand in Spain, so the government is allocating more money to meet investors' needs. But what Spain is seeing is reflected in many other countries across the globe.
According to the World Gold Council, the overall gold demand hit a decade-high last year. Demand jumped 18% in 2022 to 4,741 tonnes, almost on par with 2011, the WGC said earlier this year.
And retail investors were one of the leading forces behind this surge. Global bar and coin demand rose to a nine-year high of 1,217 tonnes, up 2% from 2021.
"The need for wealth protection in the global inflationary environment remained a primary motive for gold investment purchases," the WGC said. "Continued weakness in the US dollar, growing recession risks, a continued high bond-equity correlation, and elevated geopolitical risk form the backbone of a positive tactical case for gold in 2023."