Reuters (London) is reporting demand for gold coins has risen sharply, according to mints around the world, as interest in the precious metal soars on the back of financial instability and concerns over the inflation outlook. The Royal Canadian Mint, which produces Maple Leaf bullion coins, said it quadrupled its production capacity late last year as demand for gold and silver bullion products leapt.

Gold was one of the few commodities to rise last year as turmoil in the financial sector sharpened investors’ appetite for assets seen as a safe store of value, such as bullion. Spot gold rallied to an 11-month high of $1,005.40 on February 20 as a slide in equity markets increased interest in the precious metal.

Demand for physical gold products such as coins and bars has been particularly strong, traders say. The United States Mint said sales of its one-ounce American Eagle gold bullion coins rocketed to 710,000 ounces in 2008, from 140,000 ounces a year before.

“The demand for gold and silver has been unprecedented,” a spokesman for the Mint told Reuters.

The chairman of the French Mint, Christophe Beaux, said sales roughly doubled last year in value terms and are expected to rise by another 50 percent this year. The 2009 catalog the mint had produced was almost entirely pre-sold, he said. The French Mint produces 100 euro gold coins, and plans to mint 10-ounce and 1-kilo coins this year.

In South Africa — the world’s second-largest gold producer — Natanya van Niekerk, deputy general manager for numismatics at the South African Mint Company, said she had seen a big increase in demand for gold. “I think we will see this same trend in this and the next quarter,” she said. “Gold surely has been resilient in these times.”

Michael O’Kane, head bullion trader at the New Zealand Mint, said many overseas buyers had come into the New Zealand market. “We’re seen as a safe-haven market,” he said. He said buying had been strong since the collapse of U.S. investment bank Lehman Brothers in September, as investors moved money from banks into hard assets like gold.

The mint was averaging “a month’s transactions in a day,” he said, adding he saw demand continuing to rise.

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Anytime you are dealing in the buying or selling of gold, you have to watch out for gold scams. San Diego residents can read about recent gold scams in our state in this article: California Gold Scams on the Rise.

If you ever come across some gold bullion coins at a San Diego pawn shop and are considering buying them, there are a few things that you should keep in mind:

Remember that gold prices fluctuate all the time, sometimes quite dramatically. So be sure to check the current day’s spot price. What is gold’s spot price? That’s the current market price for the precious metal. In contrast, a gold bullion coin’s “melt value” refers the value of the coin if it is melted down and sold.

If you plan on buying a fractional gold bullion coin (that is, a coin weighing less than one ounce) you can expect to pay a higher percentage over melt value than if you were buying a one ounce coin.

The folks at the Professional Numismatists Guild say that the average retail commission that a seller charges is 5-6%. So if it seems like the pawn shop from which you are thinking about buying a gold bullion coin is charging a higher commission than that, you can likely get a better deal elsewhere

Lastly, as a general rule of thumb, remember that Kruggerrand bullion coins are usually sold for less than the American Eagle and Canadian Maple Leaf bullion coins.

If you are really keen on buying gold bullion coins, your best bet may be to look up a San Diego ANA (American Numismatic Association) bullion dealer by clicking here.

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People in San Diego often ask us just what the history of pawn shops is, where and how the whole business got started. For the curious, SDJB has now written: A Brief History of Pawn Shops.

San Diego gold buyers won’t be able to purchase any gold buffalo coins this week. The United States Mint is temporarily halting sales of its American Buffalo 24k gold coins because it can’t keep up with soaring demand. The Associated Press reports that sales from the Mint were being suspended because demand for the coins, which were first introduced in 2006, has exceeded supply and the Mint’s inventory of the coins has been depleted.

The Mint had to temporarily suspend sales of its American Eagle one-ounce gold coins on Aug. 15 and then later that month announced sales of the American Eagle coins would resume under an allocation program to designated dealers. According to the AP, the Mint said it expected to soon start distributing available Buffalo gold coins through a similar allocation program. Through Thursday, the day the Mint suspended sales of the American Buffalo, the Mint had sold 164,000 of the coins this year, up 54 percent from the same period a year ago.

The Mint introduced the American Buffalo gold coin, the country’s first 24-karat gold coin, in 2006. Congress authorized production of the coin in an effort to capture a portion of the global market for pure gold coins, competing with such coins as the Canadian Maple Leaf.

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If you are a San Diego watches and clocks collector then the following news is for you: NAWCC Announces SW California Regional.