Gold, Silver & Platinum 2009 Second Quarter Performance
July 3, 2009 | Filed Under Gold, Platinum, Silver | Leave a Comment
With the second quarter behind us, let's take a look at the performance of gold, silver, and platinum for the second quarter of 2009 and year to date.
All of the metals posted gains, but at single digit levels. The best performer for the second quarter was silver with a gain of 6.33%, followed by platinum with a gain of 5.52%, and then gold with a gain of 1.96%. The closing numbers don't tell the full story. At the beginning of June, precious metals prices had spiked. At this recent peak, silver had been up as much as 22% for the quarter. Platinum and gold were also showing heftier gains at this time.
| 2009 Second Quarter Gold, Silver, and Platinum Performance | ||||
| 31-Mar-09 | 30-Jun-09 | Change | Percent | |
| Gold | 916.5 | 934.50 | 18.00 | 1.96% |
| Silver | 13.11 | 13.94 | 0.83 | 6.33% |
| Platinum | 1,124.00 | 1186.00 | 62.00 | 5.52% |
On a year to date basis, the top precious metal performer remains as platinum with a gain of 32.07% on the year. This is followed by silver with a gain of 29.19% and gold with a gain of 7.44%. The performance of the metals had lined up in the same manner at the close of the first quarter.
| 2009 YTD Gold, Silver, and Platinum Performance | ||||
| 30-Dec-08 | 30-Jun-09 | Change | Percent | |
| Gold | 869.75 | 934.50 | 64.75 | 7.44% |
| Silver | 10.79 | 13.94 | 3.15 | 29.19% |
| Platinum | 898.00 | 1186.00 | 288 | 32.07% |
Precious Metals Investment Tax Rates
July 1, 2009 | Filed Under Legislation | Leave a Comment
Gains from the sale of investments in precious metals are currently subject to a tax rate of 28%. This compares to the current long term capital gains rate of 15%, which applies to other investment classes such as stocks and bonds. A bill has been introduced which seeks to tax precious metals investors at the same preferential rates afforded to other investors.
Precious metals investments are considered "collectibles" under the current tax code. Gold, silver, and other precious metals are lumped into the same classification as works of art, rugs, antiques, and stamps. The tax rate for "collectibles gains" is currently 28% regardless of whether the assets were held for more than one year.
The classification as collectibles comes from the section of the Tax Code which describes the capital gains tax rates which apply to different asset classes. This section references a definition of collectibles found in another section of the code, which interestingly provides an exception for certain precious metals. This exception is curiously disregarded for the purposes of capital gains taxation.
The bill S. 1367 Fair Treatment for Precious Metals Investors Act seeks to rectify the disadvantageous tax rates imposed on precious metals investors. The bill would amend the Tax Code to preserve the exception created for certain coins and bullion. After the amendment, common precious metals investments such as American Eagle bullion coins would no longer be classified as "collectibles" and would be eligible for lower long term capital gains rates.
In order to become law, the bill would need to be approved in the House of Representatives, the Senate, and signed by the President. A similar bill was introduced in 2007, but it never gained the support necessary to become law. You can following the progress of the current bill on GovTrack.
US Mint Cancels 2009 American Gold Buffalo Bullion Coins
June 23, 2009 | Filed Under US Mint | Leave a Comment
CoinWorld has reported that the US Mint has canceled the American Gold Buffalo bullion coin offering for 2009. The production of one ounce proof coins for collectors is still planned. This bullion coin program was originally launched in 2006, as the first 24 karat gold bullion coin offering from the United States Mint.
While the majority of the United States Mint's gold bullion sales are derived from the 22 karat American Gold Eagle bullion coins, the Gold Buffaloes still account for a sizable amount of sales. Last year, Gold Buffalo bullion sales tallied 172,000 ounces, while Gold Eagle bullion sales tallied 860,500 ounces.
The Gold Buffalo Coins were also viewed as an offering which allowed the US Mint to compete with other world mints that offer 24 karat gold coins. The US Mint does continue to sell First Spouse Gold Coins minted in 24 karat gold, however, these coins are sold directly by the US Mint at high premiums usually associated with collectors coins. The half ounce gold coins are currently priced at $616 for the uncirculated finish.
News of the canceled bullion coin offering is particularly surprising given the news that the US Mint had ended rationing for other gold and silver bullion coins. This seemed to be an indication that supply constraints were lifting and heavy demand was falling, suggesting a return to normality. Also of note, other world mints are taking steps to expand their bullion coin offerings during this time of increased interest in precious metals.
The cancelation of American Gold Buffalo bullion coins raises many questions, but I doubt reasonable answers will be forthcoming.
Platinum & Palladium Bullion from Royal Canadian Mint
June 23, 2009 | Filed Under Platinum, palladium | Leave a Comment
The Royal Canadian Mint has revived two bullion coin programs that had been previously been suspended for a number of years. This includes the Platinum Maple Leaf, with bullion coins already available, and the Palladium Maple Leaf, which is planned for later this year.
The Platinum Maple Leaf was originally launched by the Royal Canadian Mint in 1988 and offered in 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz sizes. The platinum bullion coins were offered until 1999 when the price of platinum started to rise and demand for the coins started to drop. Ten years later, the RCM revived the program due to demand from distributors. So far, the 2009 Platinum Maple Leaf has only been produced in 1 ounce size. The RCM does not sell the coins directly, but they can be purchased through most bullion dealers.
For 2009, the RCM seems to be the only major world mint producing platinum bullion coins. The United States Mint typically produces the popular Platinum Eagle bullion coins. In late 2008, the US Mint announced that the launch of 2009 dated coins would be delayed. To date no coins have been available and no details have emerged about the status of the program.
The Palladium Maple Leaf was the world's first palladium bullion coin offered. (Note: Some mints have issued commemorative or special issue coins minted in palladium.) The coins were introduced in 2005 and limited to production of only 40,000 coins, which were all sold. The novelty of palladium bullion wore off by 2007 when only 15,000 coins were sold and the program was ended.
Palladium bullion coins currently carry high premiums due to the fact that no major world mints currently produce the coins, and the brief production by the RCM was in very limited numbers. So far the RCM has stated that they intend to begin producing palladium bullion coins for 2009, but no availability date has been provided.
US Mint Gold and Silver Rationing Ends
June 17, 2009 | Filed Under Gold, Silver, US Mint | Leave a Comment
The United States Mint unceremoniously ended the allocation programs which had been limiting the number of Gold and Silver Eagle bullion coins that authorized purchasers could order. The announcement came in the form of a memorandum sent to authorized purchasers on Monday.
June 15, 2009
MEMORANDUM TO ALL AMERICAN EAGLE GOLD AND SILVER BULLION
AUTHORIZED PURCHASERSSUBJECT: American Eagle Gold and Silver One Ounce Bullion Coin Allocations
Effective immediately, the United States is lifting the allocation process.
You may place your orders under the standard ordering procedures. The ordering minimum and incremental quantities apply.
Thank you for your patience during this past year. We appreciate your continued support.
Amidst high demand for precious metals and a constrained supply of precious metals blanks, the US Mint had implemented allocation programs for Gold and Silver Eagle bullion coins. The allocation program for the American Silver Eagle began on April 21, 2008 when the price of silver was $17.88 per ounce. The allocation program for American Gold Eagle began on August 15, 2008 when the price of gold was $786.50.
The United States Mint had also taken other measures to deal the physical precious metals shortage. First, they had restricted production to only one ounce gold and one ounce silver bullion coin options. Typically a range of fractional bullion coins including 1/2 ounce, 1/4 ounce, and 1/10 ounce coins is offered. Second, they had announced the temporary delay of production for platinum bullion coins and 24 karat Gold Buffalo coins. Third, they delayed the production of gold and silver coins produced for collectors in order to divert all precious metals blanks to the production of bullion coins.
The US Mint has not announced whether production fractional bullion coins, 24 karat gold bullion coins, platinum bullion coins, and gold and silver collector coins has resumed.
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