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Europeans rush to gold coins as Bank of Greece stops sales

[LONDON] European investors are increasing purchases of gold as Greece's turmoil boosts the appeal for an alternative to the euro.

Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement., an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers.

Investors are searching for a safe haven after Greece imposed capital controls, closed banks and stopped selling gold coins to the public until at least July 6. German Chancellor Angela Merkel and French President Francois Hollande have signaled they've reached the limits of their ability to safeguard Greece, offering the government no further concessions to step back from the brink.

"Most of our common gold coins are sold out," Daniel Marburger, a director of Frankfurt-based, said by phone. "When people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold."

Gold futures climbed 0.4 percent to US$1,177.90 an ounce by 11:10 am on the Comex in New York. The metal is little changed for the year.

GoldCore Ltd, which buys and sells bullion, reported coin and bar demand rose "significantly" on Monday. Sales to UK and Ireland today are about three times the average level for the past three Mondays, the Dublin-based firm said in an e- mailed statement. The US Mint sold 61,500 ounces of American Eagle gold coins this month, the most since January, its website showed.

BullionVault, which says it operates the largest online physical gold trading platform, reported a jump in sales during the first half of this year, a sign of a broader increase.

Customers globally added 1.4 metric tons of gold to their account, the biggest increase since 2012, the London-based company wrote in a press release. More clients want their gold stored in Switzerland, a country that isn't in the European Union, Adrian Ash, head of research at BullionVault, said by telephone.