U.S. Mint Bullion Coin Sales Dip As Buyers Take Advantage Of Secondary Market

by: Clint Siegner*

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In all but one year thereafter the Mint set a new record. Sales peaked in 2015 at 47,000,000 Silver Eagle coins – 5 times the number sold before the world discovered just how rickety the global financial system actually is.

Memories are short, however, and investor complacency is setting in.

Sales to date in 2017 are just short of 16 million coins and are set to finish the year very close to the 2008 totals.

U.S. Mint sales are viewed as a proxy for bullion sales in the broader market. There isn’t much else available in the way of published data. However, Mint statistics don’t tell the whole story.

While retail buying activity is still stronger than retail selling, we’ve seen a meaningful increase in customer selling of coins, rounds, and bars over the past year. A lot of the American Eagles traded today are therefore resale coins which don’t show up in the Mint’s reporting of new minting activity.

Government Mint Bureaucrats Don’t Respond to Market Conditions

Private mints and refiners are responding to weaker sales by lowering premiums on rounds and bars. The government bureaucrats which run the sovereign mints, including the U.S. Mint, largely ignore these competitive forces. To date, they have not adjusted pricing.

Demand for government-minted products therefore suffers the most as buyers take advantage of significant premium discounts available in other products and secondary market items.

While retail bullion demand in the U.S. is certainly weaker overall, it is way better than the Mint’s statistics might imply. In a sense, the bullion markets are more balanced. National dealers like Money Metals Exchange make more of a two-way market, both buying from and selling to clients.

That is good news for buyers. The days when new production Silver Eagles were strictly allocated and supply fell hopelessly short of demand are behind us, at least for now. Investors can get those coins for around $2.50 over melt value, instead of paying up to $6.00 and waiting for delivery – which has been the case on a few occasions over the past 5-7 years.

Any buyer who doesn’t have to have a sovereign coin will find plenty of other silver products with premiums under a buck – such as rounds and bars. Gold premiums and availability are also improved.

Premiums could go even lower if retail demand does not increase despite the renewed bull market in precious metals that began in late 2015.

Much will depend on spot prices. Many people are impatient with the seemingly gradual rise in gold and silver prices off the 2015 bottom. If prices accelerate upwards, investors will finally start believing in the new bull market.

Perhaps an even bigger variable is the atmosphere of complacency in the markets and how much longer that will persist. Our view is that virtually all markets are severely underpricing risk. More investors should be buying safe-haven assets rather than selling.

It is hard to reconcile the world we find ourselves in today with record stock market prices, at least not without the artificial forces of central bank stimulus in massive amounts and algorithmic trading. Those forces are formidable, to be sure. But how much longer can bankers (both central and Wall Street) forestall the ultimate reckoning for all of their excesses?

Investors asking the same question should take advantage of the buyer’s market in metals while it lasts.

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Appetite for gold and silver coins surging

By Frank Holmes, CEO and Chief Investment Officer for U.S. Global Investors

Bullion coins are hot sellers right now - usfunds.com

Precious metals are going insane right now, thanks in large part to the weaker U.S. dollar. Year-to-date, palladium is up 7 percent, platinum 19 percent, gold 21 percent and silver 25 percent. A correction at this point would be healthy, but looking ahead, this rally appears to have legs.

Precious Metals Stocks Rally on Weaker U.S. Dollar
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Many analysts are already making comparisons between now and 2007, when commodities skyrocketed in an unprecedented bull market that ended in September 2011 with gold hitting its all-time high of $1,900 an ounce.

Now, Paradigm Capital analysts observe that “a new upcycle has begun in the gold sector,” estimating that “a ‘standard’ upcycle would take us to $1,800 an ounce over the next three to four years.” Another analyst sees it climbing to $3,000.

Whether or not this turns out to be the case, it’s clear that sentiment in precious metals has shifted dramatically, giving the group new found momentum.

Bullion Bonanza

This shift has helped fuel demand for American Eagle gold (and silver) coins. Spirited sales preceded gold’s recent bottom late in 2015 and have remained strong even as the precious metal rebounded in its best opening in 30 years, with many coins selling out within minutes of becoming available for purchase. Sales in April jumped nearly 180 percent from March and 257 percent from the same time in 2015. Silver coins are also moving fast after hitting an all-time sales record of 44.8 million ounces in 2015.

U.S. Gold Coin Demand Responds to Gold Prices
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Canada’s appetite for physical metals has surged as well. In its third quarter 2015 report, the Royal Canadian Mint reported record bullion sales on the weak Canadian dollar relative to the greenback, which made the yellow metal more attractive to buyers in the Great White North.

U.S. and Canadian Gold Prices Diverged
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And it’s not just Canadian citizens who are buying. During the third quarter, the Canadian Mint shipped to a reported 12 countries, up from nine countries during the same period a year earlier.

Big surge in Silver Eagle sales in early January – but down on 2014

Lawrence Williams

Silver Eagle coin sales by the U.S. Mint took their usual strong sales pattern on the first day they became available this year, but the figure was still a little down on the 2014 initial sales day.  To read full article and view chart go to Mineweb.com 

LONDON

We are indebted to Steve St Angelo of SRSrocco Report in the U.S. for the following note on a big jump in the U.S. Mint’s Silver Eagle coin sales with pent up demand seeing huge purchases on the first trading day of this year.  This was followed by a rather less hectic second day of sales, but nonetheless sales over the first two trading days are at over 75% of last year’s total January sales levels.  See chart below courtesy of Steve’s www.SRSroccoreport.com .  But perhaps not too much should be read into this so far as sales always start the year off strong and fall away through the remainder of the month.

Steve noted in a report on his website that sales of U.S. Mint Silver Eagles started off at this high level again this year with 3.6 million sold in the first two reporting days of 2015.  The U.S. Mint also started selling Gold Eagles last week with 51,500 ounces reported on the first day of sales.  The U.S. Mint released the official first day of Silver Eagle sales on January 12th.

As we can see from the chart below, the U.S. Mint sold 2,958,000 Silver Eagles on January 12th, then another 656,000 on Tuesday, January 13th.  So far this year, the U.S. Mint has sold 3,614,000 Silver Eagles compared to 56,500 oz of Gold Eagles – a 70:1 ratio, which, probably coincidentally, ties in remarkably well with the 73:1 Gold:Silver price ratio at the time of writing……..

To read full article and view chart go to Mineweb.com