May 5, 2024

U.S. Mint Sales of Gold and Silver Bullion Coins Jumps 100%

March 16, 2012 by 3 Comments

The U.S. Mint reports that March sales of the American Eagle Gold and Silver Bullion coins are on track to more than double from February sales levels.  Sales during February were unusually low with gold bullion sales down 77.3% and silver bullion sales down 54% from the prior year.  Shown below are the U.S. Mint sales figures for gold and silver bullion coins through March 15, 2012.

The U.S. Mint bullion program has been extremely popular with the public and sales of the bullion coins has soared since 2007.  The gold and silver American Eagle bullion coins are sold by the U.S. Mint to authorized purchasers who pay the U.S. Mint for the cost of the metal plus a mark up to cover operating costs.  The dealers, who are required to maintain a market for the coins, sell to the general public at the market price of the coin plus a premium to cover operating costs.  The weight, purity and content of each bullion coin is guaranteed by the United States Mint.

During the U.S. Mint’s fiscal year 2011, demand for bullion coins reached all time highs with sales of 45.2 million ounces of silver and gold bullion coins, up 26.2% from the prior year.  Total U.S. Mint revenue from the sale of the bullion coins also hit an all time record high of $3.5 billion.  Demand for the American Eagle Silver Bullion Coin was especially robust with sales more than doubling from the previous year’s total.   Last year’s sales of the American Eagle Gold Bullion coins, however, declined by 22.7% due to the higher price of gold and a change in the product release schedule for the American Gold Buffalo Bullion coin.

U.S. Mint Bullion Sales

The U.S. Mint also produces numismatic proof versions of the American Gold and Silver Eagles coins which are sold by the Mint directly to the public.  Due to unprecedented demand for gold and silver, the U.S. Mint was unable to offer the proof coins during fiscal year 2009.

The top selling numismatic coin for the past two years was the American Eagle Silver Proof 1 ounce coin with sales of 850,000 coins  in 2010 and 751,000 coins in 2011.

The 2012 American Silver Eagle Proof coin is scheduled to go on sale April 12, 2012 at an expected price of $59.95.

Filed Under: Bullion Sales, Featured, Gold, Silver, US Mint Tagged With: , , , , , , , , ,

Gold and Silver News and Headlines – Gold Owners Get Nervous

March 8, 2012 by 1 Comment

Precious metals advanced across the board today, with palladium the stellar performer with a 2.86% gain.  Gold gained $9.70 to $1685.30, silver tacked on $0.48 to $33.53, platinum rose $18 to $1633.00 and palladium jumped $19.00 to $689.00.

Although precious metals recently hit a selling storm (see The Flash Crash in Gold), precious metals remain up strongly on the year and gold is up $257.20 per ounce or 18% over the past year.  The following chart show the gains for the year on the precious metals group.  All prices per the London PM Fix closing price.

GOLD SILVER PLATINUM PALLADIUM
JAN 3RD $1,590.00 $28.78 $1,406.00 $664.00
MARCH 7TH $1,677.50 $33.17 $1,627.00 $678.00
$ GAIN $87.50 $4.39 $221.00 $14.00
% GAIN 5.50% 15.25% 15.72% 2.11%

Here’s a brief round up of some of the latest thoughtful coverage on gold and silver related news.

Free Von Nothaus from the tyranny of unjust government actions – Judging Silver or Something Else?

As I look at the circumstances, I do not see that von Nothaus or his Liberty Dollar products victimized anyone. In contrast, those who chose to keep Federal Reserve Notes and coinage of the U.S. Mint have been victimized by loss of purchasing power. If anything, and I say this with all due respect, it seems to me that it would be more sensible and appropriate to prosecute those who have victimized American citizens through the depreciation of the “money” issued by the U.S. government.

US Mint Drops Price of Gold Products

With all of the pricing data now available, the US Mint’s gold numismatic products are set for a two tier decrease. This will reduce prices by the equivalent of $100 per ounce of gold content.

Owning gold is a “privilege, not a right”.  Why The US Confiscated Gold in 1933 and Can It Happen Again?

We previously stated that gold ownership was made illegal on 1st May 1933. What we did not tell you was that U.S. citizens, under Order 6102, were allowed to own up to $100 in gold coin [+5 ounces].

Congress could easily revoke the privilege again. In fact, at no time during this century has the U.S. government recognized the right of private gold ownership.

The privilege, not right, to own gold was restored to U.S. citizens on the 15th August 1974 (not 1971, when Nixon floated the USD against gold and stopped foreign central banks from converting USD to gold). It is pertinent to the thinking behind this series, to understand the importance to government of gold and that the right to confiscate may not be restricted to individuals or institutions but could embrace a nation or two.

It’s believed that some 60% of Germany’s gold is stored outside of Germany and much of it in the Federal Reserve Bank of New York. If this is the case one has to ask, in the light of the massive currency swaps engineered by the Fed and the E.C.B. to raise the two tranches of cheap money for European banks, “Was gold swapped too, or was it pledged as collateral?”

The public pressure to repatriate national gold reserves has heightened considerably in the last year. Should Germany want its gold back home, we ask, “Can it get it back or has it already been used in these ways?

Germany to Review Bundesbank Gold Reserves in Frankfurt, Paris, London and Federal Reserve Bank of New York

German lawmakers are to review Bundesbank controls of and management of Germany’s gold reserves.  Parliament’s Budget Committee will assess how the central bank manages its inventory of Germany’s gold bullion bars that are believed to be stored in Frankfurt, Paris, London and the Federal Reserve Bank of New York, according to German newspaper Bild.

There is increasing nervousness amongst the German public, German politicians and indeed the Bundesbank itself regarding the gigantic risk on the balance sheet of Germany’s central bank and this is leading some in Germany to voice concerns about the location and exact amount of Germany’s gold reserves.

The eurozone’s central bank system is massively imbalanced after the ECB’s balance sheet surged to a record 3.02 trillion euros ($3.96 trillion) last week, 31% bigger than the German economy, after a second tranche of three-year loans.

The concern is that were the eurozone to collapse, Bundesbank’s losses could be half a trillion euros – more than one-and-a-half times the size of the Germany’s annual budget.

In that scenario, Germany’s national patrimony of gold bullion reserves would be needed to support the currency – whether that be a new euro or a return to the Deutsche mark.

Bernanke Spooks Gold

Instead, this selloff was sparked not by a development, but a non-development. In his address to Congress, Fed Chairman Ben Bernanke offered no clue as to when the Federal Reserve would unleash its next round of quantitative easing.

The markets took this as a sign that the monetary madness is coming to an end, which would bode poorly for precious metals. Metals are increasingly seen as substitutes for continuously debased fiat money, and tend to do well when new liquidity injections are announced.

Bernanke’s failure to telegraph more printing means nothing. Investors are craving a return to normalcy, which means more prudent monetary policy. As a result, many are grasping at straws. But I believe these hopes are premature, and that gold will be buoyed by easy money for quite some time.

In addition, gold will likely be favored by the greatest financial struggle of the coming decade: China’s plans to replace the United States as the dominant economic power.

Buy Japanese Bonds At 0.05% And Get A Gold Coin

Japan began selling special government bonds Monday aimed at raising funds for reconstruction from the March 2011 earthquake and tsunami, saying it will present buyers with commemorative gold coins imprinted with an image of the “miracle pine” that survived the killer tsunami when the bonds mature in three years.

The coins — worth ¥10,000 each, and silver coins worth ¥1,000 — are engraved with the design of the 30-meter-high pine in Rikuzentakata, Iwate Prefecture, that was the only one of about 70,000 pines on a stretch of coast to survive the massive tsunami.

Peter Schiff on why Buffett is wrong about gold – Buffett’s Bursting Bubble

The gold doomsayers have found their champion in the media’s favorite financial advisor and one of the world’s richest men. Warren Buffett, the man dubbed the “Oracle of Omaha,” has repeatedly and publicly denied that gold is an investment, and called gold buyers “speculators” and people “who fear almost all other assets.” In fact, Buffett claims that gold’s rise has the same characteristics as the housing and dot-com bubbles, and it is only a matter of time before it reverses course. He doesn’t mean that the price will decline because of austerity measures and a free-market interest rate, mind you. He just asserts that because he’s deemed it a bubble, it will inevitably burst.

Gold prices will only go down when governments change course and make significant cuts. Until then, gold is not in a bubble. It’s the only way to protect your wealth; and in the current economic condition, it’s poised to go much higher. I think it’s high time Buffett takes to heart his father’s wise words: “For if human liberty is to survive in America, we must win the battle to restore honest money.”

The Volatile Ride To Higher Gold

Back in 1980, Phase Three only lasted for 21 days, but increased 66% in that time span. Considering the ten year time span of Phase One, and my projection for Phase Two, I feel that Phase Three (which starts in 2015) will last for six months and drive gold up to over $6,000 per ounce. If the world’s financial leaders decide to return to a Gold Standard, or if gold bullion confiscation becomes the government’s reaction to severe inflation, my projections would escalate. Possible other government reactions that can affect my projections negatively are: limiting gold ownership, restrictions on transporting or trading, and any Gold windfall profits tax.

 

Filed Under: Bullion Sales, Featured, Gold, palladium, Platinum, Silver, Statistics, US Mint Tagged With: , , , , , , , , , , ,

Gold And Silver Bullion Coin Sales Plunge In February

March 1, 2012 by 1 Comment

The latest production figures from the U.S. Mint show a dramatic decline in the sale of both gold and silver bullion coins.

According to the U.S. Mint, sales of American Gold Eagle bullion coins in February 2012 totaled 21,000 ounces, a decrease of 83.5% from January sales of  127,000 ounces.  Gold bullion coin sales declined by 77.3% from the prior year when a total of 92,500 ounces were sold in February 2011.

Sales of the American Gold Eagle bullion coins during February is the lowest since June 2008 when the Mint sold 15,500 ounces.  During 2011, the U.S. Mint sold an average of 83,333 ounces of gold bullion coins each month and rang up annual sales of 1,000,000 ounces.  During 2011, sales of the gold bullion coins declined for the third consecutive year.

Sales of the American Silver Eagle bullion coins also declined dramatically during February.  The U.S. Mint reports total February sales of 1,490,000 silver bullion coins, down 76.6% compared to 6,107,000 during the previous month.  Sales of the silver bullion coins during February declined by 54% from February 2011 sales of 3,240,000 ounces.  Sales of the American Silver Eagle bullion coins were the lowest since November 2011 when the U.S. Mint sold 1,384,000 ounces.

Gold and silver sales detailed above do not include U.S. Mint gold and silver numismatic coins which are sold directly to the public.

The American Gold and Silver Eagle bullion coins cannot be directly purchased by the public from the U.S. Mint.  The U.S. Mint sells the gold and silver eagle bullion coins only to a network of authorized purchasers (AP’s) who in turn resell them to the public and secondary retailers.  The U.S. Mint determined that the AP distribution system was the most efficient means of retailing coins to the public at competitive prices.

Total yearly U.S. Mint gold bullion coin sales from January 1, 2000 to February 29, 2012 are shown below.

Gold Bullion U.S. Mint Sales By Year
Year Total Ounces Sold
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 536,000
2005 449,000
2006 261,000
2007 198,500
2008 860,500
2009 1,435,000
2010 1,220,500
2011 1,000,000
2012 148,000
7,397,500
Note: 2012 total through February 29, 2012

Shown below are the yearly U.S. Mint sales figures since 2000 for the American Silver Eagle bullion coins.   Sales totals for 2012 are through February.

American Silver Eagle Bullion Coin Sales
YEAR OUNCES SOLD
2000 9,133,000
2001 8,827,500
2002 10,475,500
2003 9,153,500
2004 9,617,000
2005 8,405,000
2006 10,021,000
2007 9,887,000
2008 19,583,500
2009 28,766,500
2010 34,662,500
2011 39,868,500
2012 7,597,000
TOTAL 205,997,500

The U.S. public has acquired over 200 million ounces of American Silver Eagle bullion coins since 2000 which are now valued at roughly $7.4 billion.  By comparison, the iShares Silver Trust ETF (SLV) currently holds 313 million ounces of silver bullion valued at $11.7 billion.

Filed Under: Bullion Sales, Featured, Gold, Silver, US Mint Tagged With: , , , , , , , , , , ,

Gold and Silver News & Headlines – February 2012

February 29, 2012 by Leave a Comment

Gold and silver continue their strong 2012 advance with relatively sparse mainstream press headlines.  Gold is now only $114 per ounce below the all time high of $1,895 reached on September 6, 2011 and silver looks more and more like it is getting ready to challenge the $50 range last seen in mid 2011.

Based on the closing London Fix Price, gold has advanced from $1,598.00 at the beginning of the year to today’s closing price of  $1,781.00, for a gain of 11.5% or $183 per ounce.  Silver’s advance has been even more dramatic.  Since the start of the year, silver has risen 23.7% to $35.60 per ounce, a gain of $6.82 per ounce.

Here are some recent links to excellent gold and silver related stories and blog posts:

One-Half Ounce Proof Gold Eagle Sold Out, Some Silver Products Suspended

The one-half ounce 2011 Proof Gold Eagles have sold out at the U.S. Mint.  The one ounce Proof Gold Eagle had previously sold out last October.  In addition, some silver numismatic product sales have been suspended pending pricing updates due to the rapid rise in silver prices.

The Financial System Is Sick – Are Precious Metals The Cure?

Over thousands of years, gold and silver are the only currencies that have not failed and have protected wealth.  With rampant worldwide money printing, the wealth of nations is being stolen through endless money printing.  Expect the severely undervalued gold stocks to rally strongly.

Gold Market of the 1970s Was A Dress Rehearsal

Jim Sinclair sees QE to infinity and persuasively argues that the only tool left in the toolbox is money printing which is required to prevent a global implosion from towering levels of debt.

Gold Should Be $2,100 – $2,200 Right Now

Great interview with Jim Puplava who discusses central bank money printing, financial repression, economic issues and why gold is undervalued by at least 22%.

Why The U.S. Government Confiscated Gold in 1933 – Can It Happen Again?

The U.S. government is already seizing the wealth of millions of Americans through financial repression.  Through executive order U.S. citizens were forbidden to own gold from 1933 through 1974.  Julian Phillips examines the reasons why this occurred and wonders if  it could happen again?

Silver Price Rises Twice As Fast As Gold As The Eurozone Floods With Money

Silver has been on a tear this year, up 24% compared to an increase of 12% for gold.  How should investors react to position themselves  if gold soars over $2,000 and silver spikes to over $50?

Ex-Fed Governor Warsh Again Confirms Gold Price Suppression

GATA highlights the role of governments in financial repression and suppression of gold prices.  Ex Fed Governor Kevin Warsh notes the growing call in Europe and the U.S. to devalue debts through money printing and higher inflation.  Warsh says that “Such an inflation tax would transfer wealth from those who have lent money, in good faith, to the borrowers.  Inflation is a blunt and inappropriate instrument for assigning winners and losers from profligate fiscal policy or excessive borrowing by private individuals and firms.”

If Gold Could Talk

Terrific article on the enduring characteristics of gold, why gold is money and how much gold should an investor own?  Be prepared to get your checkbook out after reading this article.  Whatever amount of gold you currently own, it’s not enough!

Filed Under: Bullion Sales, Featured, Gold, Gold Stocks, Silver, US Debt Crisis, US Mint Tagged With: , , , , , , , ,

Platinum To Gold Ratio Plunges – Is This A Buy Signal Or A New Metric?

February 7, 2012 by 1 Comment

Platinum is one of the rarest earth elements with the vast majority of deposits found in only one place on earth.  Annual platinum production is only 30 tonnes per year compared to approximately 2,800 tonnes for gold and 23,000 tonnes for silver.

Roughly 80% of annual platinum production comes from only three mines in South Africa.  Siberia and other geographically scattered locations provide the balance of annual platinum production.

Investment demand for platinum constitutes only 10% of annual demand .  Since 90% of platinum demand comes from jewelry and industrial users, the price of platinum can be very volatile.  During an economic downturn,car sales plunge and jewelry is a very discretionary purchase.  During the 2008 financial meltdown, platinum plunged by nearly two thirds of its value compared to a drop of only one third in the price of gold.

 

Platinum - courtesy kitco.com

The ongoing economic turmoil in Europe has contributed to a large drop in the price of platinum.   Last year, platinum declined from $1,887 in August to $1,354 at 2011 year end, a drop of $533 per ounce.  Although platinum has recovered to $1,609, it is considerably undervalued  when viewed through the lens of the platinum to gold ratio.  A platinum to gold ratio below 1.0 is historically a signal that platinum is selling at a bargain price.  The platinum to gold ratio is currently at .95, a level not seen since 1986.

 

Long term ratio - courtesy http://profitimes.com

 

Platinum to gold ratio - courtesy stockcharts.com

Has the long term historical significance of the platinum to gold ratio lost its relevance?  If the world plunges into a deflationary depression, platinum may wind up becoming a much greater bargain at a later date.  The more likely scenario is that a new pricing metric is not being established and that the multi-decade low in the platinum to gold ratio is a major buy signal for platinum.

The central banks of the world have made it abundantly clear that they will print and inflate their way out of the debt crisis.  Ownership of a precious metal such as platinum is one method of maintaining a store of value against depreciating currencies.

Numismatic versions of the platinum coin can be purchased by investors directly from the U.S. Mint.  The 2011 Proof Platinum Eagle has been available since May 26, 2011 with a maximum mintage of 15,000 pieces.  The current price to purchase the 2011 American Eagle one ounce platinum proof coin from the U.S. Mint is $1,892.00 with no order limit.  No sales tax is charged on the purchase and a credit card can be used to pay for the coins.

According to coinupdate.com, the United State Mint may bring back the American Platinum Eagle bullion coins.  The U.S. Mint has not minted the bullion versions of the platinum coin since 2008.  Production of the American Platinum Eagle is not required by law, as is the case for the American gold and silver eagles.  Production of the platinum coins are at the discretion of the Secretary of the Treasury.  The 2008 and earlier bullion version of the one ounce American Platinum Eagle coins are available from coin dealers and are currently priced at around $1,860 each.

Filed Under: Bullion Sales, Featured, Gold, Other Precious Metals, Platinum, Silver, US Mint Tagged With: , , , , , , , ,

Silver ETF Holdings Increase Slightly In January As The Stealth Silver Advance Continues

February 3, 2012 by Leave a Comment

Silver has started off the new year with a scorching performance

For the month of January, silver gained $5.42 per ounce closing at $33.60, up 19.2% from the 2011 closing price of $28.18.  January’s gain has more than erased the 8.1% loss on silver during 2011.  Silver has far outperformed gold which closed at $1,738.00 on January 31st, up 10.4% on the month from the 2011 closing price of $1574.50 (all prices from the closing London PM Fix Price).

The large gain in silver’s price has been somewhat of a stealth advance, with little coverage in the press.  In addition, an apathetic response to silver by investors can be seen in the volume statistics and bullion holdings of the iShares Silver Trust (SLV).

Silver holdings of the iShares Silver Trust reached a record 11,390.06 tonnes on April 25, 2011, shortly before silver reached its peak price of $48.70 on April 28th.  The value of silver held by the SLV on April 28th was $17.3 billion compared to its current value of $10.4 billion, representing a decline in both the price of silver and total ounces of silver held by the Silver Trust.

Although silver prices have soared since the beginning of the year, holdings of the SLV have increased only modestly.  At the end of 2011, the SLV held 9,605.79 tonnes of silver compared to 9,608.95 on January 31, 2012, a negligible increase of only 3.16 tonnes.  The small increase in silver held by the iShares Silver Trust indicates that investors are not participating in the silver rally, a very bullish sign from a contrarian point of view.

The silver ETF is structured in a somewhat complicated manner in which authorized participants (AP) buy or sell shares of the SLV depending on the discount or premium of the SLV to the market price of silver.  High buying demand for the SLV results in premium pricing which results in the accumulation of physical silver by the trust due to hedging activity by the APs.

SLV - courtesy yahoo.com

Investor indifference to the silver rally can also be seen in the low volume trading of the iShares Silver Trust.  We are nowhere close to the high volume seen last May that preceded the rapid correction in silver prices.  The low trading volume in the SLV, despite rising prices, is bullish from a contrary viewpoint since it suggests that many investors are still on the sidelines.  As these sideline investors start buying, prices will continue to advance.

Also supporting future price advances by silver is the relentless physical demand for silver as seen in the record purchase volume of the American Silver Eagle bullion coins.  Sales of the silver bullion coin hit at all time record of almost 35 million coins during 2011. Large demand continues in January with the U.S. Mint reporting sales of over 6 million ounces.  2012 could turn out to be a sterling year for silver.

Filed Under: Featured, Gold, Silver, US Mint Tagged With: , , , , , , ,

Gold Bullion Coin Sales Soar By 94% In January As Confidence In The Dollar Crumbles

January 31, 2012 by Leave a Comment

According to the latest production figures from the U.S. Mint, January sales of American Gold Eagle bullion coins soared by 93.8% over the previous month.

A total of 127,000 ounces were sold in January compared to 65,500 ounces in December 2011.  The surge in demand for gold bullion coins is now at the highest level since January 2011 when 133,500 ounces were sold.

Investors are taking opportunity of the bargain price of gold which remains below last year’s high.  After hitting a London PM Fix price of $1,895 on September 6, 2011, gold sold off by 19.2% to a closing low of $1,531.00 on December 29, 2011.

Since the beginning of the year, the price of gold has steadily advanced.  The closing London PM Fix price of $1,744.00 on January 31st represents a gain of $213 per ounce for the month, up 13.9% from the 2011 year end price.  The price of silver has also advanced strongly in 2012 with a gain of 26.8% from last year’s low amid record breaking demand for the American Silver Eagle bullion coins.

Sales of the American Gold Eagle bullion coins hit an all time record in 2009 when 1,435,000 ounces were sold.  A summary of annual gold bullion sales since 2000 is shown below.

Total yearly gold bullion coin sales from January 1, 2000 to January 31, 2012 are shown below.

Gold Bullion U.S. Mint Sales By Year
Year Total Ounces Sold
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 536,000
2005 449,000
2006 261,000
2007 198,500
2008 860,500
2009 1,435,000
2010 1,220,500
2011 1,000,000
2012 127,000
7,376,500
Note: 2012 total through January 31, 2012

The huge demand during 2009 for gold bullion coins came in the wake of the 2008 financial system meltdown as investors sought a safe haven from paper assets.  Here we are four years later and the financial system is more fragile than ever with insolvent banks  and governments being propped up by central banks that are printing money on a scale previously unimaginable.

Although I have been a precious metals investor for many years (more sometimes than I care to think about), many of the people I deal with on a personal  and professional level seemed to be totally confident holding only paper assets, even after the financial system came very close to a total collapse in 2008.

That confidence now seems  to be slowly but persistently eroding and I am seeing many people enter the precious metals market for the first time.  It is not an “all in” seismic shift but rather a thoughtful and fundamental portfolio reallocation based on the growing realization that paper dollars are being constantly debased.

A one time bout of money printing by the Federal Reserve to “save the system” can perhaps be quickly forgotten, but a persistent and deliberate effort to debase the currency is another matter.  The growing realization that the Federal Reserve is deliberately destroying the integrity of the dollar will be the basis for continual future demand for the only real money left – gold.

The growing movement to reallocate wealth into gold is still in its infancy which implies a future gold value many thousands of dollars higher than today’s price.

Filed Under: Bullion Sales, Featured, Gold, Silver, US Mint Tagged With: , , , , , , , ,

Silver Prices Will Soar To Record Levels In 2012 – “Record Breaking” Demand For Silver Bullion

January 31, 2012 by 1 Comment

Corrections are the norm in any long term bull market and silver is no exception.  The correction that began in May of 2011 and ended in December has set the stage for what will be an explosive move up during 2012 and beyond.

Since hitting the 2011 low of $26.16 on December 29, 2011, silver has climbed steadily, closing on Monday at $33.18, up 17.4% on the year and up 26.8% from last year’s low.  Today’s price should be viewed by long term silver investors as an exceptional opportunity for capital appreciation and wealth preservation.

The underlying fundamentals that will drive silver higher this year include unprecedented demand for both physical silver and silver ETFs, virtually limitless money printing by central banks worldwide to prevent a debt implosion and a growing realization by the public that the Federal Reserve is deliberating and systematically debasing the U.S. currency.

Sales of American Silver Eagle bullion coins by the US Mint may hit an all time record in January.  As of January 30th, the Mint has already sold 6,082,000 bullion coins.  The previous all time record for sales occurred in January 2011 when sales were 6,422,000 ounces.

Last January was atypical in that monthly sales of the Silver Eagles coins tapered off to about 3 million coins per month thereafter and only in September 2011 did sales exceed 4 million coins.  In the three previous years from 2008 to 2010, January sales volume established the baseline of monthly sales for the rest of the year.

For example, in 2009, January sales of the Silver Eagle came in at 1,900,000 coins and average sales for the remaining 11 months averaged 2.44 million coins.  If 2012 follows the pattern of 2008 through 2010, sales of the American Silver Eagle Bullion coins could average 6 million coins per month.  Average silver bullion coins sales of 6 million per month during 2012 would result in a record shattering purchase of 72 million coins, up 80% from last year’s record of 39,868,500 ounces.

American Silver Eagle Bullion Coins
YEAR OUNCES SOLD
2000 9,133,000
2001 8,827,500
2002 10,475,500
2003 9,153,500
2004 9,617,000
2005 8,405,000
2006 10,021,000
2007 9,887,000
2008 19,583,500
2009 28,766,500
2010 34,662,500
2011 39,868,500

The vast majority of holders in the iShares Silver Trust (SLV)  are solidly committed to owning silver and refused to sell positions during the sharp correction of 2011.  When silver hit a high of $48.70 (London PM Fix Price) on April 28th, the iShares Silver Trust held 11,053 tonnes of silver.  After a rapid and sharp correction to $32.50 on May 12th, the SLV silver holdings declined modestly to 10,516 tonnes as short term speculators and over-leveraged investors sold out at the bottom.

On December 29, 2011, as silver hit its low for the year at $26.16, the iShare Silver Trust held 9,605 tonnes.  A correction from the price high on April 28th to the low on December 29th took silver down by 46.3% but holdings of the iShares Silver Trust declined by a very modest 13.1%.  The vast majority of long term silver investors did not sell out during the correction in expectations of sharply higher prices in the future.

Silver - courtesy kitco.com

 

According to Reuters, precious metal dealers are reporting record breaking silver sales and “dollar sales of silver and gold products reached parity in January for the first time in its history – even though bullion costs 50 times more.”  In addition, dealers are selling record number of the Silver Eagle “Monster Boxes” which hold 500 one-ounce coins.

The European Central Bank, which in December lent a massive €489 billion of freshly printed euros to a collapsing banking system may have to provide double that amount (for a total of $1.27 trillion dollars) during the next round of emergency lending scheduled for February.  According to the Financial Times:

European banks are preparing to tap the European Central Bank’s emergency funding scheme for up to twice as much as the ECB supplied in its debut €489bn auction last month, providing further evidence of the sector’s liquidity squeeze.

Several of the eurozone’s biggest banks have told the Financial Times that they could well double or triple their request for funds in the ECB’s three-year money auction on February 29.

The gold to silver ratio, which on a long term historical basis, has been in the range of 16 is now at the bargain ratio of 52, suggesting strongly that silver could outperform gold on a relative value basis.  At a gold to silver ratio of 20, silver would currently be selling at $87 per ounce.

The Sprott Physical Silver Trust (PSLV) just completed a follow on offering of Trust Units in which investors snapped up additional trust units representing about 11 million ounces of silver.

Silver’s rapid price gains during January is a harbinger of what could turn out to be a very good year for silver investors.

Filed Under: Bullion Sales, Featured, Silver, US Debt Crisis, US Mint Tagged With: , , , , , , , , ,

Demand For Silver Bullion Coins Hits Record High On Bargain Prices

January 6, 2012 by 2 Comments

Sales of American Silver Eagle bullion coins hit an all time record high during 2011 according to production figures from the U.S. Mint.

Sales of the Silver Eagle bullion coins increased by 13.3% in December to 2,009,000 compared to last year’s sales of 1,772,000.  For all of 2011, total Silver Eagle sales came in at an all time record high of 39,868,500 ounces, up 15.0% from the prior year’s total of 34,662,500 ounces.

In addition to the silver bullion coins, the U.S. Mint also produces proof and uncirculated American Eagle silver coins which can be purchased by the public directly from the U.S. Mint.  Commencing in 2010, the U.S. Mint began producing the America the Beautiful Silver Bullion 5oz coin.  During 2011, the U.S. Mint sold 397,700 of the 5oz coins, which represents almost another 2 million ounces of physical silver demand during 2011.

The U.S. Mint does not sell the American Silver Eagle bullion coins directly to the public.  The bullion coins are purchased from the U.S. Mint by a network of authorized purchasers who in turn resell them to secondary retailers for public sale.

Monthly sales of the Silver Eagle bullion coins during 2011 are shown below.

Silver had a volatile year during 2011, reaching a high of $48.70 in April and then dropping to a low of $32.50 in May after the COMEX repeatedly raised margin requirements on silver futures (see How the COMEX Crashed The Silver Market).  After recovering to $43.49 in August, silver declined to end the year at $28.18, off 8.1% for the year.

Despite the volatility in silver prices during 2011, investor demand for physical silver remained exceptionally strong.  After the significant price pullback from the April high, many analysts and armchair commentators who never owned an ounce of silver in their life were predicting a plunge in demand for silver.  The exact opposite occurred as long term investors took advantage of what is another historic buying opportunity comparable to 2008.

The case for buying silver remains rock solid and patient long term investors have been well rewarded.  As opposed to buyers of paper silver products such as the iShares Silver Trust ETF (SLV), holders of physical silver are invested in precious metals as part of a long term wealth preservation and appreciation strategy.  While speculators in paper silver products trade in and out, usually winding up with losses from my observations, long term holders of physical silver have seen the value of their holdings rise significantly.

Silver - courtesy kitco.com

As central banks of the world continue to print money at an accelerated rate, 2012 should be a year of strong gains for both gold and silver.  A steady plan of silver and gold bullion accumulation remains a no-brainer decision.  Since 2008, sales of silver eagle bullion coins have soared.  Last year, extremely heavy demand for silver resulted in periodic product allocations by the U.S. Mint.

In an excellent article by Steve Angelo, it was shown that massive physical demand for both the American Silver Eagles and Canadian Maple Leaf coins resulted in official coin sales surpassing the total silver production of both the United States and Canada.

Expect demand for silver bullion products during 2012 to surpass the record year of 2011.  Shown below are the yearly sales figures since 2000 for the American Silver Eagle bullion coins.

American Silver Eagle Bullion Coins
YEAR OUNCES SOLD
2000 9,133,000
2001 8,827,500
2002 10,475,500
2003 9,153,500
2004 9,617,000
2005 8,405,000
2006 10,021,000
2007 9,887,000
2008 19,583,500
2009 28,766,500
2010 34,662,500
2011 39,868,500

 

Filed Under: Bullion Sales, Featured, Silver, Statistics, US Mint Tagged With: , , , , , , ,

Gold Bullion Coin Sales Jump 9% In December, But Decline 18% For The Year

January 3, 2012 by Leave a Comment

Demand for physical gold increased in December as buyers took advantage of a recent pullback in gold prices.

According to production figures from the U.S. Mint, sales of American Gold Eagle bullion coins in December totaled 65,500 ounces, an increase of 9.2% from December 2010.  Total sales of gold bullion coins for 2011 declined by 18% from the prior year.  For all of 2011, a total of 1,000,000 ounces were sold compared to previous year sales of 1,220,500 ounces.

The sales figures cited above do not include gold numismatic coins sold by the U.S. Mint.  Collector versions of gold coins such as the American Buffalo Gold Proof Coin can be purchased directly by the public from the U.S. Mint.

The American Gold Eagle bullion coins cannot be directly purchased by the public from the U.S. Mint.  Instead, a network of authorized purchasers (AP’s) buys the coins in bulk from the Mint at a fixed markup.  The AP’s in turn resell them to secondary retailers for public sale.  The AP distribution system established by the U.S. Mint was determined to be the most efficient method for selling gold bullion coins to the public at competitive prices.

Although sales of gold bullion coins increased during August and September when gold was soaring to all time highs, the largest  monthly sales of gold bullion coins occurred in January when gold was trading in the $1,350 range (please see chart below for monthly sales figures).

U.S. Mint Gold Bullion Sales By Month

 

2011 marks the third year in a row of reduced purchases of gold bullion coins but this is not indicative of an overall reduction in investment gold demand.  Competing investments such as gold trust ETFs may be responsible for a large part of reduced demand for physical gold.

Besides much lower transaction costs, investors in gold ETFs or other paper gold products do not have to worry about security and storage costs.  Since their launch in 2005, investors have poured billions of dollars into gold trust ETFs.  For example, the SPDR Gold Shares Trust (GLD) and the iShares Gold Trust (IAU) now hold gold bullion valued at over $82 billion.  By contrast, the approximate value of all American Eagle Gold bullion coins purchased last year amounts to only $1.6 billion.

The all time record sales of American Eagle gold bullion coins occurred in 2009 when 1,435,000 ounces were sold.

Gold Bullion U.S. Mint Sales Since 2000
Year Total Ounces Sold
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 536,000
2005 449,000
2006 261,000
2007 198,500
2008 860,500
2009 1,435,000
2010 1,220,500
2011 1,000,000
Total 7,249,500

 

Will gold bullion sales continue to decline?  The recent implosion of MF Global along with unrestrained money printing by central banks should provoke some clear headed thinking by investors.  Customers of MF Global who thought they had warehouse receipts for physical gold and silver were shocked to find that the bankruptcy trustee put all assets into a single pool to cover  claims of all customers who have lost billions of dollars.

Paper assets can be vaporized in an instant, even those that are allegedly backed by physical assets such as gold and silver.  A question well worth pondering is “Could what happened at MF Global also happen to investors in the gold trust ETFs”?

 

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