April 20, 2026

2009 Proof Silver Eagle Canceled

October 7, 2009 by Leave a Comment

Yesterday, some very significant news broke which put to rest long standing speculation about the status of some of the United States Mint’s bullion and collector coin product offerings. Essentially, the United States Mint canceled all collectible 2009 Gold and Silver Eagle Coins, but announced the limited production of collectible proof 2009 Platinum Eagles and Gold Buffalo Coins, as well as bullion fractional Gold Eagles and one ounce Gold Buffalo coins. I will be breaking this announcement down into several posts over the next few days.

The United States Mint has offered Proof Silver Eagles since their bullion counterparts were first released in 1986. This coin has become a modern favorite for collectors and has been one of the US Mint’s core numismatic product offerings.

Last year, the US Mint was forced to end sales of the 2008 Proof Silver Eagle coin around August 2008. The coins are typically available through the end of the year and have been a highlight of the US Mint’s holiday gift offerings. The unannounced and unexplained unavailability of the coins was later revealed to be related to the “unprecedented demand” for silver bullion products.

Under law the United States Mint is required to produce American Silver Eagle bullion coins in quantities sufficient to meet public demand. During 2008, higher demand taxed the resources of the US Mint and they had been forced to briefly suspend sales and subsequently impose a rationing program which limited coin sales at the dealer level.

As long as the US Mint was unable to meet full public demand for bullion coins, they believed it was their requirement by law to source all incoming silver blanks to the production of bullion coins and suspend production of collector coins.

The situation continued into the following year, but seemed to be abating when the US Mint finally lifted bullion coin rationing programs in June. Since this time, the US Mint has apparently been unable to build up enough inventory of silver blanks to produce collector coins.

The announcement marks a tremendous disappointment for collectors who have been assembling the Proof Silver Eagle series since 1986. There will now be a gap in the collection of at least one year. The US Mint states that they will attempt to obtain a greater supply of silver bullion blanks so production of collector coins can resume with the 2010 Silver Eagles.

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US Mint Cancels 2009 American Gold Buffalo Bullion Coins

June 23, 2009 by 2 Comments

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.

Update: 2009 Gold Buffalo bullion coins and 2009 Proof Gold Buffalo coins have been offered by the US 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.

Update: CoinWorld published a subsequent story stating that the 2009 Gold Buffalo Bullion coins are not canceled. The information received from the US Mint which was the basis of their initial story was not correct.

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US Mint Gold and Silver Rationing Ends

June 17, 2009 by 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 PURCHASERS

SUBJECT: 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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US Mint Suspends Production of More Gold and Silver Coins

March 14, 2009 by 51 Comments

The United States Mint has officially announced the suspension of another slate of gold and silver products. The affected products are 2009 dated American Gold and Silver Eagle coins produced for collectors. These coins are considered collectible versions of the bullion coins.

Although these are collectible coins, they represent a sizable amount of precious metals sales and represent a method of gold and silver investment for many individuals. Last year, the US Mint sold 1,157,911 ounces of silver in the form of Silver Eagle coins minted for collectors. They also sold 155,740 ounces of gold in the form of Gold Eagle and Gold Buffalo coins minted for collectors.

The following message was posted on the US Mint’s website in the space where the collectible Gold Eagle coins typically appear. The proof coins has been offered uninterrupted since 1986. The uncirculated version has been offered since 2006.

Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.

A similar message is posted in the section where collectible American Silver Eagle coins would typically appear. The proof coins have also been offered uninterrupted since 1986 and the uncirculated coins since 2006.

Production of United States Mint American Eagle Silver Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Currently, all available silver bullion blanks are being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”

The United States Mint will resume the American Eagle Silver Proof and Uncirculated Coin Programs once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.

This adds to the lengthy list of 2009 dated precious metals products that have been “temporarily delayed” or suspended by the US Mint. In my previous post Actions of the US Mint Discourage Gold Ownership, I mentioned the delayed release of 2009 Gold Eagle fractional coins, 2009 Gold Buffalo coins, and all 2009 Platinum Eagle coins. The delay, which was first announced in November 2008, continues with no further explanation provided.

For those keeping track, here is a list of the US Mint’s 2009 precious metals products that have been “temporarily delayed” or suspended:

  • 2009 American Gold Eagle 1/2 oz. (bullion)
  • 2009 American Gold Eagle 1/4 oz. (bullion)
  • 2009 American Gold Eagle 1/10 oz. (bullion)
  • 2009 American Platinum Eagle 1 oz. (bullion)
  • 2009 American Platinum Eagle 1/2 oz. (bullion)
  • 2009 American Platinum Eagle 1/4 oz. (bullion)
  • 2009 American Platinum Eagle 1/10 oz. (bullion)
  • 2009 American Gold Buffalo 1 oz. (bullion)
  • 2009-W Proof American Gold Eagle 1 oz. (collector)
  • 2009-W Proof American Gold Eagle 1/2 oz. (collector)
  • 2009-W Proof American Gold Eagle 1/4 oz. (collector)
  • 2009-W Proof American Gold Eagle 1/10 oz. (collector)
  • 2009-W Proof American Gold Eagle 4 Coin Set (collector)
  • 2009-W Uncirculated American Gold Eagle 1 oz. (collector)
  • 2009-W Proof American Silver Eagle (collector)
  • 2009-W Uncirculated American Silver Eagle (collector)

In addition, the following precious metals related products were discontinued by the US Mint for 2009. These discontinuations were announced in November 2008. Amidst the environment of unprecedented demand for precious metals, the US Mint determined that these products were “unpopular.”

  • Uncirculated American Gold Eagle 1/2 oz. (collector)
  • Uncirculated American Gold Eagle 1/4 oz. (collector)
  • Uncirculated American Gold Eagle 1/10 oz. (collector)
  • Unriculated American Gold Eagle 4 Coin Set (collector)
  • Uncirculated American Gold Buffalo 1 oz. (collector)
  • Uncirculated American Gold Buffalo 1/2 oz. (collector)
  • Uncirculated American Gold Buffalo 1/4 oz. (collector)
  • Uncirculated American Gold Buffalo 1/10 oz. (collector)
  • Unriculated American Gold Buffalo 4 Coin Set (collector)
  • Proof American Gold Buffalo 1/2 oz. (collector)
  • Proof American Gold Buffalo 1/4 oz. (collector)
  • Proof American Gold Buffalo 1/10 oz. (collector)
  • Proof American Gold Buffalo 4 Coin Set (collector)
  • Uncircualted American Platinum Eagle 1 oz. (collector)
  • Uncircualted American Platinum Eagle 1/2 oz. (collector)
  • Uncircualted American Platinum Eagle 1/4 oz. (collector)
  • Uncircualted American Platinum Eagle 1/10 oz. (collector)
  • Uncircualted American Platinum Eagle 4 Coin Set (collector)
  • Proof American Platinum Eagle 1/2 oz. (collector)
  • Proof American Platinum Eagle 1/4 oz. (collector)
  • Proof American Platinum Eagle 1/10 oz. (collector)
  • Proof American Platinum Eagle 4 Coin Set (collector)

That makes a total of 38 precious metals products which have been delayed, suspended, or discontinued by the US Mint.

As it currently stands, investors or collectors looking to purchase newly minted American Eagle or American Buffalo precious metals products have only two options available. These are the 2009 1 oz. American Gold Eagle and the 2009 1 oz. American Silver Eagle. Both of these products continue to be subject to rationing.

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2009 Ultra High Relief Gold Double Eagles: US Mint Can’t Deliver Their Own Hype

February 25, 2009 by 22 Comments

Back in December, I examined the upcoming 2009 Ultra High Relief Double Eagle Gold Coin offering from the US Mint. I expressed the opinion that the US Mint would have problems handing demand for the new coin. Several months later, the US Mint has had problems with virtually every aspect of the product, from the inability to obtain gold blanks to the botched production of paperback books.

The Ultra High Relief Double Eagle recreates the original design for the 1907 Gold Double Eagle created by Augustus Saint Gaudens. Each coin contains one ounce of 24 karat gold and is struck on a specialized blank, which is 50% thicker than the blanks used for most one ounce gold bullion coins.

The US Mint began publicly touting the coin as early as March 2008, calling it a “recreated masterpiece” and the “nation’s most beautiful coin.” US Mint Director Edmund Moy has called it “one of the best coins ever made in the world throughout all of history” and likened owning the coin to owning a Monet.

Perhaps the current environment of limited gold blank supply was not the best time for the high profile launch of a flashy gold prestige coin.

Pricing and Availability

Sales of the Ultra High Relief Gold Coins began on January 22, 2009. The US Mint tried to head off the anticipated high demand by setting an ordering limit of only one coin per household. This ordering limit remains in place. Coins were initially priced at $1,189 per coin. This price has been raised three times in the subsequent months to its current level of $1,339 per coin. When sales began, the US Mint indicated that orders for the coin might take six to nine months to complete.

Many people attempted to get around the order limitation by enlisting the help of friends and family with unique household addresses. Coin dealers were also forced to try to find a way to circumvent the ordering limit. They offered a gauranteed premium to anyone willing to order the coins for them. Some customers felt that the price was set too high, but complaints were not widespread. Many were dismayed about the prospect of waiting six to nine months for their orders.

Limited Gold Blank Supply

Several days after the coins went on sale, Edmund Moy revealed that so far the US Mint had only able to obtain enough blanks to produce 29,000 coins. Customers had ordered approximately this number of coins during the first day of sales. To date more than 48,000 coins have been ordered.

The implication is that anyone who had ordered on the first day might receive their coins soon, but customers who placed their orders after the first day, might be in for a long wait. There has been no indication of whether the US Mint has been able to procure additional blanks beyond the first reported batch of 29,000.

Shipping Delays and Miscommunications

During the weeks that followed, US Mint customers began receiving a series of emails which provided a confusing array of estimated shipping dates. Some customers received four or five emails which included a different shipping date each time. These shipping dates often conflicted with the estimated shipping dates available in customer account screens. Some of the earlier dates came and went with no coins shipped.

Amidst the wave of emails, the first coin actually received in hand was reported February 9, 2009 at online social networking site Coin Network. After this first report, many assumed widespread shipping of the first 29,000 coins would follow. As the days passed, it became apparent that only a small number of coins had actually shipped. The rest were inexplicably delayed.

Shipping Problems and Website Security Issues

Following the arrival of the first coin, US Mint customers began to report shipping issues for other US Mint orders, as well as security issues that were impacting Ultra High Relief Double Eagle coin orders. The US Mint’s shipping contractor had reportedly been leaving packages filled with thousands of dollars of gold coins on customer doorsteps without signature or any other confirmation of delivery. The US Mint’s website had an easily exploited security flaw which caused some customers to have their orders canceled without authorization.

The US Mint disabled some of the functions of their website to prevent the further unauthorized cancellation of orders. They never broadly informed customers of the underlying problems or the potential resulting delays.

Production Problems for the Companion Book

The final and most recent problem in the Ultra High Relief saga relates to the Companion Book, which the US Mint produced to accompany the gold coin. Apparently, a production problem caused the book covers to warp or curl.

Today, the US Mint sent an email to all customers announcing that they would resume shipping of the Ultra High Relief coins, and the companion books would be shipped separately. The email did not mention the shipping problems, website security problems, possible gold blank limitations, and overlooked the fact that customers had never been informed of a shipping delay in the first place. Besides the series auto generated emails with inaccurate shipping dates, this was the first email sent to customers to explain why they haven’t received their coins.

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Silver Investment Demand

February 3, 2009 by 3 Comments

In a previous post, I reviewed the amount of silver bullion sold by the United States Mint during 2008. With this post, I will take a longer term look at silver demand, which highlights the absolute explosion in demand which has occurred in recent years.

The supporting data for the charts included with this post comes from a new section of Gold and Silver Blog which collects the US Mint Silver Bullion Sales data since the inception of the program in 1986. You can visit the page to find the monthly sales figures for any date from 1986 to present. The section also calculates the approximate silver bullion value of each period’s sales based on the average monthly price of silver.

Silver Bullion Sales in Ounces

Here’s a chart summarizing the total ounces of silver bullion sold by the US Mint each year since 1986. (Click on the chart for a larger version.)

During 2008, the US Mint sold 19,583,500 ounces of silver through its bullion program. As explored previously, this marks an all time high for the program. It represents an increase of more than 98% from the prior year, and an increase of 92% from the previous all time high reached in 2002.

One important thing to note when considering the magnitude of the increase for 2008 is that the number of ounces sold could have been much greater. The US Mint suspended silver bullion sales during February before resuming sales on a rationed basis. When the rationing first began, one dealer claimed that he could have sold 500,000 ounces of silver per week, but was only allocated 100,000 ounces.

2008 Silver Bullion Sales in Dollars

Here’s a second chart which illustrates the explosion in demand for silver in even more dramatic fashion. The chart shows the approximate dollar value of silver bullion sold by the US Mint each year. As mentioned, this was calculated based on monthly silver bullion sales and the average monthly price of silver. (Click on the chart for a larger version.)

Silver Bullion Sales Value Chart

During 2008, The US Mint recorded silver bullion sales of approximately $286,451,715. This marks an all time high and an increase of 114% from the prior year, which was also the prior all time high.

The magnitude of the increase is more pronounced when compared to silver bullion sales from earlier years of the program. Throughout the majority of the 1990’s, the US Mint was selling less than $30 million worth of silver each year. The year for the lowest value of silver bullion sold was 1996 with $17,434,050. During 2008, the US Mint recorded monthly sales exceeding this level for ten out of twelve months.

Silver Bullion Sales and the Price of Silver

But what about the price of silver amidst this explosion in demand?

Here’s a third chart which plots the value of US Mint silver bullion sales from the last chart, together with the average annual price of silver for each year. (Click on the chart for a larger version.)

Silver bullion sales increased from a low of $17,434,050 to last year’s high of $286,451,715 representing an increase of 1,543%. The average annual price of silver increased from a low of $3.95 per ounce to last year’s high of $14.99 representing an increase of 203%. While this is a respectable gain, it pales in comparison to the increase in demand.

Everyone has been waiting for the disconnect between the demand for silver and the price of silver to resolve itself. Will it finally happen in 2009?
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US Mint Raises Premiums on Silver Eagle Bullion Coins (Again)

January 27, 2009 by 4 Comments

Today, the United States Mint published notification that they would be raising the premiums charged for American Silver Eagle bullion coins. This refers to the premium above the price of silver at which the US Mint sells the bullion coins to Authorized Purchasers. The premium will increase from $1.40 per coin to $1.50 per coin. The increase will be effective from February 9, 2009.

The US Mint cited the recent price increase for “raw materials silver” as the reason for the increase. Less than four months ago on October 14, 2008, the US Mint had raised premiums from $1.25 per coin to $1.40 per coin. At that time they had cited “increases in the cost of acquiring silver blanks.”

Silver Eagle bullion coins sold by the US Mint continue to be subject to rationing. This “allocation program” has been in place since April 2008 as the US Mint’s solution to the ongoing overwhelming demand for silver. I am sure most would prefer to pay even higher premiums for Silver Eagles if they were allowed to buy the coins in unrestricted quantities.

The full notification of the current premium increase as published in the Federal Register is included below.

[Federal Register: January 27, 2009 (Volume 74, Number 16)]
[Notices]
[Page 4830]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja09-87]

DEPARTMENT OF THE TREASURY

United States Mint

Notification of United States Mint Silver Eagle Bullion Coin Premium Increase

ACTION: Notification of United States Mint Silver Eagle Bullion Coin Premium Increase.

SUMMARY: The United States Mint is increasing the premium charged to Authorized Purchasers for American Eagle Silver Bullion Coins, a program authorized under 31 U.S.C. 5112(e). Because of the recent price increase for the premium for raw materials silver, the United States Mint will increase the premium charged to Authorized Purchasers for American Eagle Silver Bullion Coins, from $1.40 to $1.50 per coin, for all orders accepted on or after February 9, 2009.

Authority: 31 U.S.C. 5112(e)-(f) & 9701.

Dated: January 22, 2009.
Edmund C. Moy,
Director, United States Mint

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Actions of the US Mint Discourage Gold Ownership

January 21, 2009 by 16 Comments

Over the past several months, the United States Mint has announced a series of actions and policy changes that make it more difficult for the average individual to buy gold. There have always been plausible or semi-plausible explanations, but the consequence of each action has been to limit or discourage gold ownership.

The recent actions of the United States Mint in relation to gold are presented below. I have also included the US Mint’s explanation for each situation, taken from official memorandums or press releases.

August 2008: The US Mint suspends sales of Gold Eagle bullion coins. Sales resume two weeks later on a rationed basis.

On August 14, 2008, the US Mint announced that they were suspending sales of American Gold Eagle bullion coins. The suspension was in place until August 25, 2008, when sales resumed under an allocation program. The program divides available gold coins into two pools. The first pool is divided equally among all authorized bullion purchasers. The second pool is allocated based on past sales performance.

When gold coin rationing (termed “allocation”) was introduced, it was presented as a temporary measure. More than four months later, gold coin rationing continues. There has been no indication when authorized bullion purchasers will be able to order unrestricted quantities of gold bullion coins.

US Mint explanation:

“The unprecedented demand for American Eagle gold one-ounce bullion coins necessitates our allocating these coins among the authorized purchasers on a weekly basis until we are able to meet demand.”

September 2008: The US Mint suspends sales of Gold Buffalo bullion coins. Sales resume more than one month later, but only to clear remaining inventory.

On September 25, 2008, the US Mint announced the sales suspension of 24 karat American Gold Buffalo bullion coins. Sales did not resume until November 2, 2008 when the US Mint was able to offer only its remaining limited inventory on an allocated basis.

US Mint explanation:

“Demand has exceeded supply for American Buffalo 24-Karat Gold One-Ounce Bullion Coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins.”

October 6, 2008: The US Mint announces that production will be halted for all but one gold bullion coin option.

Production was immediately halted for one-half ounce and one-quarter ounce American Gold Eagle bullion coins. Production of one tenth-ounce gold bullion coins was halted following depletion of the remaining blank supplies. Production of one ounce Gold Buffalo bullion coins was also halted following depletion of the remaining blank supplies.

These coins represent the US Mint’s only fractional gold bullion coin offerings and the US Mint’s only 24 karat gold bullion offering. The production halt seemed to be a temporary measure that would impact 2008 dated coins. The production halt has continued into 2009. There has been no indication when production will resume.

US Mint explanation:

“The United States Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the United States Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins.”

November 10, 2008: The US Mint announces the discontinuation of numerous gold and platinum numismatic products.

The discontinuation of 22 different gold and platinum numismatic products was included as a broader measure to refocus the US Mint’s line of products for coin collectors. Discontinued gold coin products included fractional uncirculated Gold Buffalo coins, one ounce uncirculated Gold Buffalo coins, fractional proof Gold Buffalo coins, and fractional uncirculated Gold Eagle coins.

Although the US Mint has constantly referred to the “unprecedented demand” for gold, they deemed their gold numismatic products to be “unpopular.” Following the discontinuation announcement, sales of the 2008-dated versions of the discontinued coins surged and all numismatic Gold Buffalo and platinum coin offerings sold out in less than a month.

US Mint explanation:

“We are responding to the collector community which has spoken loudly and clearly. Customers have told us there are just too many products.  We agree, and it’s time the United States Mint trims down and concentrates on the products our customers love most.”

November 24, 2008: The US Mint announces the delayed release of all but one 2009 gold bullion coin option.

This delayed release served to prolong the previously announced production halts for fractional gold bullion coins and the 24 karat Gold Buffalo bullion coins. As noted previously, the production halt continues with no indication of when it might end.

The single 2009 gold bullion offering from the US Mint continues to be subject to rationing. As noted previously, there has been no indication of when the rationing will end.

US Mint statement:

“The quantities of blanks that we have been able to acquire from our suppliers continue to be very limited, while demand for bullion coins remains high. As a result, it is necessary for the United States Mint to delay the launch of other bullion coins until later in 2009. We will continue to monitor the situation and keep you informed as additional information becomes available.”

January 6, 2009: The US Mint establishes a new pricing policy for gold and platinum numismatic products.

The new US Mint pricing policy adjusts the prices for gold and platinum numismatic products as often as weekly based on the average London AM Fix gold price. The prices for coins are based on a published table which seems to impute higher premiums than the old pricing system.

In the past, prices were established at the start of sales and remained fixed unless there was a significant move in the price of the underlying precious metal. At times gold numismatic products could be purchased for premiums as low as 10%. Under the new policy, prices are adjusted weekly to preserve permanently high premiums. Current premiums run 30% or more depending on the product.

US Mint explanation:

“Transparency, agility, and customer service are the catalysts for our new pricing method. The volatile precious metals market prompted our customers to suggest that we re-vamp our process, and we listened.”

Conclusion?

The series of incremental changes outlined above has resulted in the following situation:

  • Production was halted for all of the US Mint’s fractional gold bullion and 24 karat gold bullion offerings several months ago. There has been no indication when production might resume.
  • The only 2009 gold bullion coin available from the US Mint is the one ounce American Gold Eagle. Sales of this single bullion coin offering remain subject to rationing.
  • The US Mint’s gold numismatic offerings for 2009 have been significantly reduced from the prior year. The remaining product offerings will be priced at prohibitively high premiums under a newly established pricing policy.

Whether or not it was the US Mint’s intention, every significant action they have taken since August has either limited gold availability, eliminated gold product options, or increased the cost of acquiring gold. Has it all just been a consequence of surging global demand for gold, supply chain mismanagement, and bad timing for policy decisions? Or is there something else going on here?

Thank you to APMEX for confirming the status of the US Mint’s 2009 gold bullion coins for this post.

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2008 US Mint Gold, Silver & Platinum Bullion Coin Sales

January 13, 2009 by 3 Comments

With the dust somewhat settled for the prior year, we now have some complete US Mint sales data on sales of gold, silver, and platinum bullion coins. As expected, the numbers show some large percentage increases from prior year sales. In particular silver bullion sales reached an all time record high with sales of nearly 20 million ounces.

While the bullion coin sales figures go a long way to highlighting the immense demand for physical precious metals experienced in 2008, it’s only part of the picture. These strong numbers were achieved amidst periodic suspensions and rationing programs which impacted all bullion coin programs at one point or another during the year.

Sales of silver bullion coins were suspended on February 4, 2008 and again on March 19. Sales were resumed more than one month later on April 21, but on a rationed basis. Similarly, gold bullion coin sales were suspended and then resumed on a rationed basis. And finally, sales of some platinum and gold coins were ended prematurely, prior to the end of the year.

2008 US Mint Gold Bullion Coin Sales

Coins Ounces
1 oz Gold Eagle 794,000 794,000
1/2 oz Gold Eagle 50,000 25,000
1/4 oz Gold Eagle 58,000 14,500
1/10 oz Gold Eagle 270,000 27,000
1 oz Gold Buffalo 171,500 171,500
Total 1,343,500 1,032,000

The US Mint sells a 22 karat gold coin known as the American Gold Eagle. This coin is sold as a one ounce coin as well as in 1/4 ounce, 1/2 ounce and 1/10 ounce fractional denominations. The US Mint also sells a 24 karat one ounce gold coin known as the American Gold Buffalo. Gold Eagles have been sold since 1986 and Gold Buffaloes have been sold since 2006.

Across all options, the US Mint sold 1,032,000 ounces of gold through its bullion coin programs in 2008. This represented a jump of more than 78% from last year’s combined total of 577,000 ounces of gold. Notably, the total for 2008 is still far from the all time high of 2,055,500 ounces reached in 1999.

2008 US Mint Silver Bullion Coin Sales

Coins Ounces
1 oz. Silver Eagle 19,583,500 19,583,500

The US Mint sells a one ounce silver bullion coin known as the American Silver Eagle. These bullion coins have been sold since 1986.

For 2008, the US Mint reached an all time record for ounces of silver sold through their bullion program at 19,583,500 ounces. This represents a 98% increase from last year’s sales of 9,887,000 ounces of silver. The previous record for ounces of silver sold through the US Mint’s bullion coin program was set in 2002 with 10,475,500.

2008 US Mint Platinum Bullion Coin Sales

Coins Ounces
1 oz. Platinum Eagle 20,800 20,800
1/2 oz. Platinum Eagle 12,800 6,400
1/4 oz. Platinum Eagle 20,800 5,200
1/10 oz. Platinum Eagle 13,000 1,300
Total 67,400 33,700

The US Mint sells 99.95% platinum bullion coins known as the American Platinum Eagle. These coins are available in one ounce as well as 1/2 ounce, 1/4 ounce, and 1/10 ounce fractional sizes. The platinum bullion coins have been offered since 1997.

During 2008, the US Mint sold 33,700 ounces of platinum through their bullion program. This was up 272% from last year’s platinum bullion coin sales of 9,050 ounces. The all time record for platinum bullion sales by the US Mint was 175,650. This record was set in 1998 when platinum was significantly cheaper.

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US Mint Unveils New Pricing Policy

January 7, 2009 by Leave a Comment

The US Mint unveiled a new pricing policy which covers all Gold and Platinum Numismatic Products. This pricing policy does not refer to any of the bullion offerings, but only the numismatic products which the US Mint sells to coin collectors. The new policy represents a significant shift in the handling of collectible coins with precious metals content.

The US Mint cites “fluctuating gold and platinum commodity costs” as the reason for the change.

In the past, the US Mint has announced prices for products one to two weeks prior to release. The pricing was presumably based on the market price of the precious metals content plus production costs and a profit margin. This initial price could only be adjusted via publication of new pricing in the Federal Register. Since this process takes time, price changes were preceded by sometimes lengthy suspension periods. Even during the most volatile years for precious metals, prices were changed only three to four times at most.

The US Mint’s new pricing policy will allow them to change prices as frequently as once per week. Price levels would be set based on the average weekly price of gold based on London Fix prices for the preceding week, Thursday to Wednesday. If the average price moves across certain thresholds, prices will be adjusted up or down on Thursday at 10:00 AM ET. The new policy will go into effect January 12, 2009.

This is a significant change of policy that will make numismatic products seem more like bullion products, albeit with very high premiums. It will be interesting to see how this new policy sits with coin collectors and whether there will be any kinks in the implementation.

Below is the text of the US Mint’s notification published in the Federal Register.

[Federal Register: January 6, 2009 (Volume 74, Number 3)]
[Notices]
[Page 493-496]

DEPARTMENT OF THE TREASURY

United States Mint

Notification of New Pricing Methodology for Numismatic Products
Containing Platinum and Gold Coins

SUMMARY: The United States Mint is implementing a new pricing methodology for its numismatic products containing platinum and gold coins to mitigate the effect that fluctuating gold and platinum commodity costs has on the pricing of these products. The new pricing methodology is based primarily on the London Fix weekly average (average of the London Fix prices covering the previous Thursday a.m. Fix through the Wednesday a.m. Fix) platinum and gold prices, which reflect the market value of the platinum and gold bullion that these products contain. As required by law, the prices of these products also must be sufficient to recover all other costs incurred by the United States Mint, such as the cost of minting, marketing, and distributing such products (including labor, materials, dies, use of machinery, and promotional and overhead expenses). This pricing methodology will allow the United States Mint to change the prices of these products as often as weekly so they better reflect the costs of platinum and gold on the open markets.

DATES: The new pricing methodology, as further explained in the SUPPLEMENTARY INFORMATION section, will go into effect on January 12, 2008.

SUPPLEMENTARY INFORMATION: Pursuant to the authority that 31 U.S.C. 5111(a)(3), 5112(i), 5112(k), 5112(o), and 5112(q) grant the Secretary of the Treasury to mint and issue gold and platinum coins and to prepare and distribute numismatic items, the United States Mint sells to the public numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin. In accordance with 31 U.S.C. 9701 31 U.S.C. 9701(b)(2)(B), the United States Mint is changing the prices of these coins to reflect a new methodology in pricing.

Effective January 12, 2009, the United States Mint will commence selling numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin at prices established by using the new pricing methodology. Specifically, each Wednesday, the United States Mint will apply the average London Fix for platinum and gold (average of the London Fix prices covering the previous Thursday A.M. Fix through the Wednesday A.M. Fix) to the below pricing schedules. Price adjustments as a result of this process, if any, will be effective at 10 a.m. E.S.T. on the immediately following Thursday.

The pricing charts included with the release follow. Click for large version.


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