March 29, 2024

Did JP Morgan Jump or Were They Pushed?

JP Morgan has “quietly reduced” their short silver positions. So is this going to take off the block on the silver market?

In the short term then yes it will, but it is probably a good idea to be a bit wary, even while accepting that silver has a good way to go up.

So what was the issue with JP Morgan?  In essence JP Morgan had what was known as “naked shorts” which means that JP Morgan was essentially selling what it didn’t have.  JP Morgan would sell you forty pieces of silver, or whatever, in three months time in the hope that the silver price would go down from the price that was agreed. If the price went down then JP Morgan would make a small profit as you didn’t exercise the option that it sold you.  If the price went up, you’d make the profit and JP Morgan would make a loss.  This is fairly standard practice.

The problem that JP Morgan had was that they sold a significant market moving amount of silver options.  This was, so some more excitable silver followers claimed, lowering the price of futures which meant that the current price of silver could not help but be affected.  It also put JP Morgan into a tight spot as they were in beyond their means.  There were so much silver futures that JP Morgan would not be able to redeem it all meaning that it would have to scramble in the markets to buy the silver, meaning that it would be bankrupted.

Well that doesn’t seem to be happening.  This looks like part of a staged withdrawal, orchestrated by the major players.  The first step was a rise in the required margins on the options, which meant that all players had to have more silver on their balance sheets before playing with margins – and so cutting some of the frothiness out of the market.  This is stage two.

JP Morgan was sailing far too close to the wind, even if they were not going to go bankrupt, and this quiet withdrawal means that their losses are real but limited.  So there will not be that sudden spike as JP Morgan is held hostage by holders of physical silver that many silver bulls were expecting.

Silver is a really good inflation play, as well as being a reasonable industrial metal.  In the long term its fundamentals have improved thanks to the excitable statements being safely out of the way.

Gold and Silver Recap: Silver Price to $50?

Another Precious Week

Usually we start this column with some guff about gold.  And then after talking mostly about gold we may hit the other metals.  Let’s face it, gold is usually the most exciting metal there is.  If the world collapses about us, we will be using gold as the currency that helps us rebuild civilization.  And after all, what could be more exciting than that.

But the real action has been in the silver market.  Not all up, it must be said as silver took a real pounding on some days, but there’s some real excitement that J.P. Morgan may be about to bite it on silver.

Precious Metals Prices
Fri PM Fix Weekly Change
Gold $1,375.25 -28.25 (-2.01%)
Silver $28.79 +0.05 (+0.17%)
Platinum $1,673.00 -45.00 (-2.62%)
Palladium $737.00 -21.00 (-2.77%)

Gold-Silver Ratio: 47.77 (was 48.83)

First let’s look at some history.  Bunker Hunt and a few friends tried to corner the silver market by buying silver and buying silver futures.  They drove the silver price skywards, to a level that’s not been reached since.  Then the authorities did some dirty tricks with the silver futures contracts, the price of silver fell, and everyone brushed themselves off and got on with life.

Now J.P. Morgan has been accused of doing the same thing, but in reverse.  Instead of buying silver they are selling it short, that is they are selling it now to buy in six months time.  They have, it has been alleged, sold far more silver than they can possibly have.  This has meant that the rise in the silver price is going to kill them if we all buy physical silver.  You see, someone may want to see all this silver they’ve been sold, and then J.P. Morgan will have to buy it and up shoots the price.

The core idea here is that the gold silver ratio is ridiculously high.  Historically (going back to Biblical times) it has been 16:1, now it is around 48:1, although this week it fell quite fast.  A return to historical norms would mean that silver would get to $87 per ounce.

So there’s some correction that’s due.  Now, this doesn’t necessarily mean that silver has to go up.  There could be a new paradigm, or if not, the correction could be postponed for a very long time. If the correction does happen, then it could be that gold would go down to around $500 – where it was only a few years ago.

Gold could keep going down, but there’s enough uncertainty and inflation to suggest that it won’t get all the way to $500 per ounce.  The correction could be delayed by decades or muted, but the collection will come.  You could still lose money betting on it.

America the Beautiful Silver Bullion Coins Relaunch with Price Controls

After putting the program on hold earlier this week, today the United States Mint has relaunched the eagerly awaited America the Beautiful Silver Bullion Coins. If primary distributors wish to purchase the coins from the Mint, they must agree to a new set of terms and conditions, which includes price caps and very specific guidelines for distribution.

Despite extremely limited mintages of only 33,000 coins per design, the coins technically represent a bullion series. By law, the coins must be distributed through the United States Mint’s authorized purchaser network. A small group of 11 primary distributors are able to purchase the coins directly from the Mint based on the market price of silver plus a mark up of $9.75 per coin.

When one of the distributors started charging considerably more than their cost, customer complaints prompted the US Mint to put the program on hold.

The series has relaunched today with a new set of terms and conditions for authorized purchasers.

1.  Authorized Purchasers shall make available for sale to the public all 2010 America the Beautiful Silver Bullion Coins that they acquire.  The intention of this condition is to ensure that all 2010 America the Beautiful Silver Bullion Coins minted and issued by the United States Mint are sold to the public.

2.  Authorized Purchasers may charge to their customers a price no higher than ten percent above the price at which the Authorized Purchasers acquire 2010 America the Beautiful Silver Bullion Coins from the United States Mint.  Authorized Purchasers may charge their customers a reasonable shipping and handling fee; however, Authorized Purchasers may not charge any other fee, premium, or other expense to their customers to circumvent this ten-percent markup limitation.  The intention of this condition is to ensure that members of the public can obtain these coins at a reasonable and affordable purchase price.

3.  Authorized Purchasers must establish and enforce an order limit of one coin of each design for each household.  A household is defined as all persons of a family, or living as a family, at a single mailing address.  The intention of this condition is to ensure the broadest and fairest public accessibility to 2010 America the Beautiful Silver Bullion Coins, which are limited-mintage United States Mint products.

4.  Authorized Purchasers may not sell, either directly or indirectly, 2010 America the Beautiful Silver Bullion Coins to their officers or employees.  The intention of this condition is to ensure that 2010 America the Beautiful Silver Bullion Coins are available to the public and that Authorized Purchaser officers and employees do not have an unfair advantage over members of the public.

Although there was definitely a problem with the distribution system in this particular situation, by imposing price controls, the US Mint is treading into dangerous waters. There may be future implications for the authorized purchaser system and average consumers seeking to invest in gold or silver bullion.

Back in late 2008, the price of silver had plummeted to less than $10 per ounce. The rush to buy physical silver resulted in supply shortages, which pushed premiums to around 50% even for typically low premium products like 100 oz. silver bars. The United States Mint’s American Silver Eagle bullion coins were typically sold for a $4.50 per coin premium or more.

This represented a mark up greater than 10% above the cost to the primary distributors who, at the time, were able to buy the coins directly from the Mint at a $1.40 per coin premium. There weren’t many complaints to the Mint, presumably because all silver bullion products were priced at similar premiums.

The next time there is a silver supply shortage and premiums start to rise, will the US Mint seek to impose price controls for Silver Eagle bullion coins? How do you think that will work out?

America the Beautiful Silver Bullion Coins on Hold

The America the Beautiful Silver Bullion Coins should have been released on December 6, 2010, but instead the program has been delayed by the United States Mint. The delay was prompted by widespread complaints about secondary market prices, which had risen to more than two times the value of the 5 ounces of silver content.

As a bullion product, the coins were to be distributed through the US Mint’s network of authorized purchasers. A small group of primary distributors would be allowed to purchase the coins directly from the Mint at a price based on the market value of the silver content plus a premium of $9.75 per coin. Because of the expected high demand for the coins and the limited mintage available, the Mint urged the primary distributors to keep prices reasonable.

At least one primary distributor began offering the coins for sale at a premium of around $130 per coin over the market value of the silver content. Other bullion and coin dealers further down the distribution chain began offering the coins for even higher prices. The situation ultimately led to a flood of complaints, which caused the US Mint to halt deliveries to primary distributors while they determined the best course of action.

Based on a statement provided by the US Mint, they are currently, “evaluating these reports and collecting information in order to assess the appropriate course of action to make certain that our customers are best served in the distribution of the coins, and to ensure the widest possible availability, accessibility and affordability of these coins.”

The situation stems from the fact that each of the five 2010 America the Beautiful Silver Bullion Coins will have production of only 33,000 units each. The low mintage and high demand for the coins make them more akin to modern rarities than bullion coins. The other bullion coins distributed through authorized purchasers are produced in large quantities to ensure that they are priced and treated like commodities.

In order to accomplish their goals of “availability, accessibility, and affordability,” the natural course of action for the US Mint would be to distribute the coins directly to the public. The US Mint has sold low mintage numismatic products to the public in the past. They have imposed ordering limits or other procedures deemed necessary to achieve fair and widespread distribution.

Unfortunately, this option does not seem to be allowed under the law authorizing the bullion series, which calls for the coins to be distributed through the authorized purchaser network.

Other seemingly logical options such as selling the 2010 releases into the following year or completely scrapping the program for 2010 are also not possible under law. The Mint is required to strike and make the coins available for sale. The bullion coins may only be available for sale during the year in which the corresponding circulating quarter dollars are issued.

Keeping in mind the legal requirements, what options does the US Mint really have for the America the Beautiful Silver Bullion Coins?

  1. Distribute existing production through AP’s and require them to keep prices at a “reasonable” level set by the US Mint. The problem with this option is that the US Mint can only impose such pricing requirements at the primary distributor level. Most primary distributors don’t sell directly to the public, but resell to other bullion dealers. The retail prices would simply be marked up at the next level before reaching the consumer.
  2. Distribute the existing production through the National Park Service. The authorizing legislation allows the NPS to purchase the bullion coins directly from the Mint for resale to the public. Currently the NPS uses partner organizations or concessioners operating under contract to sell products at National Parks. Potentially, the NPS could create pricing and distribution guidelines for their concessioners to follow when offering the coins for sale. The US Mint could assist the NPS in formulating these guidelines.
  3. Increase the premiums charged to primary distributors to a higher level. It seems possible that the US Mint may have underestimated the costs of production anyway. One long time coin dealer stated that their calculations were likely based on much higher production levels, which would have allocated fixed costs over a greater number of units. The US Mint could recalculate the premium charged to primary distributors based on the actual limited production. This would prevent primary distributors from absorbing additional premiums, which were really just attributable to misallocated costs borne by the Mint.
  4. Increase the number of 2010 ATB Silver Bullion Coin minted to a level appropriate for a bullion product. The Secretary of the Treasury has discretion to establish the number of bullion coins available, so the number authorized could certainly be increased. However, with a complicated manufacturing process and less than one month to go, additional production is probably not be possible. Presumably, the low production level announced was the maximum number that the US Mint could reasonably produce before year end.
  5. Seek a change to the legal requirements for the coins. This would require some very prompt action from Congress, which seems unlikely. At mid year or earlier, the US Mint had asked for modifications to some of the more troublesome specifications for the 5 ounce bullion series. The bill containing these fixes (and a questionable modification to the Gold and Silver Eagle laws) was only recently passed in the House and Senate.

When the US Mint announced the halt of the America the Beautiful Silver Bullion Coin Program, I hope they realized that an easy solution was not apparent. Whatever choice they make to address the issues created by this year’s coins will likely upset someone. Even though they haven’t been issued yet, the coins have already been sold and resold on the secondary market based on a certain production and rarity perception.

How Much Gold and Silver Will the Treasury Secretary Determine is Sufficient to Meet Public Demand?

A bill, which seeks to provide greater Congressional oversight for circulating coin compositions, may have implications for the quantity of United States Mint gold and silver bullion coins that are available to precious metals investors.

The bill H.R. 6162 Coin Modernization, Oversight, and Continuity Act of 2010 primarily establishes rules for the Secretary of the Treasury to provide biennial reports to specified committees on the costs related to circulating coins, and make recommendations for new metallic materials or procedures. A final section of the bill deals with “meeting the demand for gold and silver numismatic items”, although the implications seem to extend to bullion coins.

Following the cancellation of the 2009 Proof Silver Eagles, the United States Mint sought greater flexibility to produce numismatic versions of the coin. The Director of the United States Mint requested such authority be granted to the Secretary of the Treasury at a hearing of the Subcommittee on Domestic Monetary Policy and Technology on July 20, 2010. The chairman of the subcommittee Melvin Watt was the one who introduced the bill H.R. 6162.

The following is Sec. 4 of the bill:

Subsections (e) and (i) of section 5112 of title 31, United States Code are each amended by striking ‘quantities’ and inserting ‘qualities and quantities that the Secretary determines are’.

Here’s how the law authorizing American Silver Eagles currently reads (emphasis added):

(e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which— (1) are 40.6 millimeters in diameter and weigh 31.103 grams; (2) contain .999 fine silver; (3) have a design— (A) symbolic of Liberty on the obverse side; and (B) of an eagle on the reverse side…

And here’s now the law would read if the bill H.R. 6162 is enacted (emphasis added):

(e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities and qualities that the Secretary determines are sufficient to meet public demand, coins which— (1) are 40.6 millimeters in diameter and weigh 31.103 grams; (2) contain .999 fine silver; (3) have a design— (A) symbolic of Liberty on the obverse side; and (B) of an eagle on the reverse side…

A similar change occurs for subsection (i), which deals with American Gold Eagles.

The inclusion of the word “qualities” was necessary to accomplish the presumed goal of the legislation to allow the issuance of numismatic versions of the coins, but what about the added phrase “that the Secretary determines are sufficient”?

Is the amount of gold and silver bullion coins that the Secretary determines are sufficient to meet public demand different that than amount which will actually meet public demand?

Even under the strict existing standard, there have been extended periods of time when full public demand was clearly not being met. The sale of Gold and Silver Eagle bullion coins have been completely suspended for brief periods, and rationed for considerably longer periods. Most recently, Gold Eagles were subject to rationing from December 2009 until March 2010, and Silver Eagles were rationed from December 2009 until September 2010.

What will happen if the standard becomes less strict and more indefinite?

US Mint Bullion Programs at the Treasury Secretary’s Discretion

Besides the American Gold and Silver Eagles, no other US Mint bullion programs carry the requirement to be produced in quantities sufficient to meet public demand. The language varies, but each program is effectively left to the discretion of the Secretary of the Treasury.

The 24 karat American Gold Buffalo coins, carry the requirements, “Not later than 6 months after the date of enactment of the Presidential $1 Coin Act of 2005, the Secretary shall commence striking and issuing for sale such number of $50 gold bullion and proof coins as the Secretary may determine to be appropriate, in such quantities, as the Secretary, in the Secretary’s discretion, may prescribe.”

The subsection dealing with American Platinum Eagles reads: “The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”

And, the recently issued 5 ounce America the Beautiful Silver bullion coins: “The Secretary shall strike and make available for sale such number of bullion coins as the Secretary determines to be appropriate that are exact duplicates of the quarter dollars issued under subsection (t)”

Granted that there is no public demand requirement, but how is the Treasury Secretary doing with these other gold and silver bullion programs?

Inventories of the American Gold Buffalo bullion coins were completely depleted by the end of September 2010. At that point, the US Mint indicated that no further inventory of 2010-dated bullion coins would be made available.

The American Platinum Eagle has not been available in bullion format for more than two years. After final inventories were exhausted in late 2008, the US Mint indicated that the 2009 release would be delayed. The 2009-dated bullion coins were eventually canceled. The US Mint has not provided any information on 2010-dated bullion coins, and none have been issued to date.

The America the Beautiful Silver Bullion Coins went on sale to authorized purchasers today. The supply was so limited that the US Mint urged primary distributors to keep prices reasonable. Market forces took precedence and the bullion coins have been selling for double the silver value, or more.

Conclusion

So what is the difference between “quantities sufficient to meet public demand” and “quantities that the Secretary determines are sufficient to meet public demand”?

In practice, we shall see if this represents a different standard, but at this point the change in wording makes me uncomfortable.  I want the supply of gold and silver bullion coins to be determined by demand in the marketplace, not determined by unspecified criteria established by the Secretary of the Treasury.

As the bill has already been passed in the House and Senate, and only requires the President’s signature to become law, it seems too late to do anything other than brace for the possible repercussions.

Another Precious Week: Back on Track – Record Breakers

Gold, Silver, Platinum, and Palladium Weekly Recap

So the price of gold has broken the $1,400 mark, whatever.  The biggest news is that we shrug off records such as these being broken.

The pundits are saying that this is a “flight to safety”, to which we say that’s so last week.  Literally last week.  If you’re memory was at the top end of the gold fish scale (and we’re talking about market pundits here) you’d remember that the flight to safety was last week when all the other metals were going down but gold was up.

Now gold is up less than the other metals, and we know what that means.  Inflation, baby.  Sure enough, oil is up as well.  In fact gold really didn’t show much form until Friday, and that was only because of Chinese figures.

Precious Metals Prices
Fri PM Fix Weekly Change
Gold $1,403.50 +48.50 (+3.58%)
Silver $28.74 +2.12 (+7.96%)
Platinum $1,718.00 +79.00 (+4.82%)
Palladium $758.00 +88.00 (+13.13%)

This inflation hedging should be slightly puzzling, after all the Quantitative Easing announcements were a few weeks ago and the bank rescues in Europe may have been mildly inflationary, but they are also a reminder that the whole thing could go down in a deflationary spiral that will hit precious metals.

That’s because we’re looking at the west.  As we’ve been arguing for some time the consumer demand in the east is where the action is.  And the Chinese are very worried about inflation.  China has released figures that have shocked the markets showing that the demand for gold is five times what it was last year.  This is about a third of the total consumer gold demand. The Chinese are scared stiff of inflation, which is going out of control, particularly with a weak currency due to the dollar link.

Precious metals are the answer, and China has historically been particularly fond of silver rather than gold.

Governments are also actively buying, particularly Russia which has overtaken Japan to become the eighth biggest Central Bank holding gold.  And they got the World Cup soccer competition.  Lucky Russia.

In the silver market the talk is about market manipulation and short positions, with some people speculating that the traders who took out the massive short positions need to cover their positions and actually buy silver.  Well perhaps.

Palladium and platinum have also proved to be very tight markets, with palladium getting to its highest price since April 2001.  Palladium in particular has a very narrow supply base, with much of the mines being in Russia.

New US Mint Silver Bullion Coin Series Starts Next Week

The release date, mintages, and premiums for  the United States Mint’s America the Beautiful Silver Bullion Coins were finally revealed this week. Precious metals investors and collectors were in for a few surprises.

As covered in a previous post, the coins will feature the same designs as the America the Beautiful circulating commemorative quarter dollars. This will result in five different issues per year from 2010 to 2020, and a single issue in 2021. The bullion coins will be struck in 5 troy ounces of .999 fine silver with the curious legal tender face value of 25 cents. Specifications include a diameter of 3 inches and thickness of 0.16 inch.

The release date for the new series will be December 6, 2010. This is the first date that the United States Mint’s authorized purchaser network can place orders for the new series. As with other bullion coins, the US Mint uses a small network authorized dealers to handle distribution. They purchase the coins in bulk quantities directly from the Mint and then resell them to other dealers and/or the public. Individuals are not able to buy the America the Beautiful Silver Bullion Coins directly from the Mint, but must purchase them from a bullion dealer or other market source.

The US Mint will only be producing 33,000 units for each of the 2010 designs. This results in total production of 165,000 of the silver bullion coins. It had previously been reported that 500,000 would be struck, but for unspecified reasons this amount was reduced. In terms of bullion, 825,000 ounces (165,000 of the 5 ounce coins) is an incredibly small amount. In the last  month, the US Mint sold more than 4.2 million ounces of silver bullion.

Premiums charged to authorized purchasers for the America the Beautiful Silver Bullion Coins will be $9.75 per coin. This is a very reasonable amount, but the premiums that are paid on the secondary market might be another matter. At the primary distribution level, the US Mint has warned authorized purchasers to set premiums at a level “competitive with those charged for other bullion coins.” I think the primary dealers will do their best to follow this mandate, but at subsequent levels of distribution, market forces will take precedence and drive prices higher.

In the first quarter of 2011, the US Mint will offer numismatic versions of the 5 ounce silver coins. These will be limited to only 27,000 units each. This will be another adventure waiting to happen. However, in this case the US Mint will sell the coins directly to the public at fixed prices, and will likely impose household limits to ensure broad distribution.

Details Awaited for America the Beautiful 5 oz. Silver Coins

Silver investors and coin collectors have been awaiting the final details of the United States Mint’s new silver bullion coins. Some preliminary information such as the design, specifications, and production levels have been revealed, but the premiums and exact release dates remain unknown.

The America the Beautiful Silver bullion coins will feature the designs of the new circulating commemorative quarter series struck in 5 ounces of .999 fine silver. Under Public Law 110-456, the coins will be produced with an unusually large diameter of 3.0 inches. By comparison, the Perth Mint’s 5 oz Lunar silver bullion coins have a diameter of about 2.58 inches. The larger diameter makes the US Mint’s coins more difficult to produce and potentially bendable by hand, due to the thickness of only 0.16 inches.

Following the America the Beautiful Quarters Program, a total of 56 different designs will be released between 2010 and 2021. The releases will feature a National Park or National Site from each of the 50 States, 5 U.S. Territories, and Washington, D.C. The order of release has been established based on the dates the areas were federally designated.

By law the US Mint may issue make the coins available for sale only during the calendar year that the corresponding quarter dollars are released. This means that the 2010 5 oz silver bullion coins featuring Hot Springs, Yellowstone, Yosemite, the Grand Canyon, and Mount Hood must be issued available for sale before the close of the year.

Overall production is left to the discretion of the Treasury Secretary. This is in contrast to the American Silver Eagle, which must be struck based on public demand. For 2010, the US Mint has planned production of 500,000 of the America the Beautiful Silver Bullion Coins, equally divided amongst the five designs.

The new silver bullion coins will be distributed through the US Mint’s authorized purchaser network, which currently distributes other bullion products. The premium that authorized purchasers will need to pay above the market value of the silver has not yet been announced. For the American Silver Eagle, the premium is currently $2.00 per coin. Premiums for American Gold Eagles range from 3% to 9% depending on the bullion weight.

Gold and Silver Recap: Prices Mixed, Eurozone Troubles

Another Precious Week

The big news is once again that the Euro zone is in trouble.  Ireland has rather bizarrely decided to take a bail out loan that it claimed that it never wanted, but that’s not the really, really big news.

No the really, really big news is that the rest of the Euro zone is in trouble.  Both Portugal and Spain are denying that they need bail outs, which to the international markets seems to mean “are in an early rather than a later stage of negotiation”.  Even Belgium is looking vulnerable.  And outside the Eurozone the British, who seem to have been remarkably smug, are also in trouble due to their mainly nationalized banks being up to their neck in bad Irish debt.  So chaos.

And then there’s Korea, where we could have war.  And so more chaos.

But not inflationary chaos, yet.  This has meant that gold and silver swapped places this week.  Gold went up (reflecting a greater danger that the world was going to end soon) while silver went down showing that inflation was probably not likely when everyone’s trying to work out how to wind up a small but rather expansive economy.

Precious Metals Prices
Fri PM Fix Weekly Change
Gold $1,355.00 +12.50 (+0.93%)
Silver $26.62 -0.45 (-1.66%)
Platinum $1,639.00 -11.00 (-0.67%)
Palladium $670.00 -25.00 (-3.60%)

This has not just shown in silver, palladium and platinum prices – it’s also shown in the price for crude oil.  The dollar’s strengthened and everyone’s worried about money going out of the system rather than going in.  Whether this will last is another question, after all although the Euro is a mad concept with a single currency over separate fiscal policies it had a reasonably strong central bank.  Sooner or later someone’s going to start the printing press up as they’ve already done in Washington, Tokyo and London.  And gold rose 3.8% against the Euro.

When looking at the market there hasn’t really been much government action.  The action, as it has been for much of this half of the year, has been among consumers.  For example the GLD ETF, a way of investing in gold if you really trust brokers rather than gold coins in your hand, has been soaking up a lot of the customer interest in gold.  As these ETFs, or exchange traded funds, are adding to the liquidity they could be setting the stage for a sharp reverse.

There’s also some action in Asia as the Indian wedding season is adding yet more pressure as the wedding season starts and Vietnam allows more gold to be imported. One interesting fact is that Chinese consumers have doubled the amount of savings they devote to gold this year to 2%.  There’s plenty of room for growth.

2010 Proof Gold Eagle Selling Quickly

Sales of the recently released 2010 Proof American Gold Eagle already account for more than 74,000 ounces of gold. The collector offerings were first available for sale from the United States Mint on October 7, 2010.

In addition to gold and silver bullion coins distributed through a network of authorized purchasers, the US Mint also typically offers collectible versions of the coins for direct sale. Numismatic products for the American Gold Eagle were canceled last year due to the demand for bullion coins. With the resumption of sales this year, collectors have returned in force.

Through November 21, the total sales for the 2010 Proof Gold Eagles measured in ounces, already exceed the final sales total for the 2008 offerings by more than 50%. The 2008 Proof Gold Eagles were available for a period of more than ten months.

2010 Proof Gold Eagle Sales through 11/21/10

Units Ounces
1 oz 25,000 25,000.00
1/2 oz 6,031 3,015.50
1/4 oz 5,194 1,298.50
1/10 oz 12,809 1,280.90
4 coin set 23,464 43,408.40
Total
74,003.30

2008 Proof Gold Eagle Sales Final

Units Ounces
1 oz 17,720 17,720.00
1/2 oz 10,085 5,042.50
1/4 oz 6,360 1,590.00
1/10 oz 15,599 1,559.90
4 coin set 12,517 23,156.45
Total
49,068.85

Maximum product limits for the 2010 Proof Gold Eagles have been established at 25,000 one ounce coins, 15,000 half ounce, 16,000 quarter ounce, 27,000 tenth ounce, and 39,000 of the 4 coin sets. So far the one ounce option has achieved the maximum.

If all options sell out, this would account for 111,350 ounces of gold.