November 28, 2022

American Eagle Silver Bullion Coin Sales Up From Previous Year and On Track For Record Breaking 2014 Sales

silver eagleThe US Mint American Eagle silver bullion coins remain more popular with investors than ever, despite the decline in the price of silver.  Apparently there are plenty of long term silver investors who prefer to hold the physical metal and are viewing the decline in the price of silver as an opportunity to load up at bargain prices.

The latest report from the US Mint shows that November sales of the silver bullion coins totaled 3,426,000 ounces, down from the previous month but up by 1,126,000 ounces or 49% from the previous year.  October 2014 was the highest selling month of the year with total sales of 5,790,000 coins.

Sales of the American Eagle silver bullion coins year to date through November 30 now total 41,547,000, just shy of the all time record sales year of 2013 when the Mint sold 42,675,000 coins.  If December sales of the silver bullion coins surpass 1.1 million coins, which is very likely, 2014 will be another record breaking sales year.

Gold and silver investors can only shake their heads and wonder at investor confidence in central banks as an orgy of money printing continues worldwide and leveraged debt piles up at a rate and amount never seen before in history. The attitude seems to be “who cares – my stocks and bonds and real estate are going straight up.”

At some future point that no one can predict you can count on another financial accident on par or greater than that of 2008-2009 that will destroy confidence in paper money and the ability of governments to repay debt with sound money.  At that point the exchange rate between dollars and precious metals will amply reward the investors now buying bargain gold and silver.

Silver has now given back the bulk of its gains from the highs reached in early 2011 and could well go lower given the bearish sentiment and declining price pattern.

Since 2000 investors have purchased over 300 million American Eagle silver bullion coins.  Below are the sales by year with the 2014 total through November 30.

 

Gold Plunges After Swiss Voters Reject Central Bank Gold Buying

SNBGold can’t catch a break lately as Swiss Voters Reject Measure Forcing SNB to Acquire More Gold.

Swiss voters rejected a measure in a referendum requiring their central bank to hold a portion of its assets in gold, a measure its President Thomas Jordan termed an “invitation to speculators” that could have hurt the economy. Bullion tumbled to a three-week low.

The “Save Our Swiss Gold” proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 77 percent to 23 percent, the government said yesterday. Polls had forecast the initiative’s rejection. Two other initiatives on tax privileges for foreign millionaires and immigration limits also were rejected.

SNB policy makers estimated they would have needed to buy 70 billion francs worth of gold if the referendum had passed. Some economists estimated the SNB wouldn’t have had to sell euros to meet the requirement, given its dollar holdings. At the end of the third quarter, it held 45 percent of its 460 billion francs of foreign currencies in euros and 29 percent in dollars.

Even though the Swiss gold referendum was expected to be defeated gold prices plunged by over $38 per ounce in late Sunday trading and silver was pulverized with prices down almost 8%.

As stocks and bonds continue to soar on liquidity provided by central bank quantitative easing investors have been dumping gold by the tons from their portfolios.  The Swiss Gold Rejection simply gave investors another reason to stay away from gold which has been in a vicious bear market.

Gold has lost 19 percent since peaking in March and investor holdings of exchange-traded products are near a five-year low. While prices probably won’t be affected too much by the “no” vote of the initiative called “Save Our Swiss Gold,” approval would have improved sentiment and increased prices by as much as $50 an ounce, HSBC Holdings Plc estimated in November.

“Gold had received some support in the last couple of weeks” before the vote, Georgette Boele, an analyst at ABN Amro Bank NV in Amsterdam, said by phone. “We’ll get more pressure on gold. The overall outlook is not looking great.”

2014-proof-gold-eagle

Even the surprise news that India had ended curbs on gold imports did nothing to support prices.  In a bear market all news is bad and gold can’t seem to find a support level.  The irony of it all is that the massive euro holdings of the Swiss National Bank were purchased with Swiss francs manufactured out of thin air by the SNB to prevent its currency from appreciating against the euro.  Governments world wide have turned an experiment with quantitative easing into  national policy and are churning out trillions of dollars of printed fiat currencies.  Last I heard the value of anything depreciates as the quantity increases.  Although it’s a tough market right now, long term I’m betting that it’s a smart move to have some gold on hand.

Bargain Gold and Silver Prices Boost Worldwide Coin Demand

feature-300x200Bargain prices for gold and silver is fueling global demand for bullion coins.

During September sales by the U.S. Mint of American Eagle gold and silver bullion coins increased dramatically.  Sales of the American Eagle gold bullion coins during September rose to 58,000 ounces, up from 25,000 in August.  Sales of the American Eagle silver bullion coins rose to 4,140,000 ounces in September, more than double the 2,007,500 ounces sold in the previous month (see also Must Know Facts Before Buying American Eagle Silver Bullion Coins).

The increased demand for gold and silver coins seen in the U.S. was mirrored at other major world mints which have seen steadily increasing demand during the third quarter.

The Perth Mint of Australia, one of the largest mints in the world, has also experienced a sales spike in demand for gold and silver bullion.  During September The Perth Mint sold 756,839 ounces of silver bullion up from under less than 450,000 ounces earlier in the year.  The Perth Mint actually sold more gold bullion during September than the U.S. Mint with sales of 68,781 ounces.

The Perth Mint

The Perth Mint – ounces of gold and silver sold

The Perth Mint sells gold and silver bullion as both coin and minted bars and has a much wider product category than the U.S. Mint.

Further declines in the overextended and over-leveraged financial markets due to economic worries is likely to accelerate the recent trend into safe haven assets such as gold and silver.

Courtesy: yahoo finance

Courtesy: yahoo finance

American Eagle Gold Bullion Coin Sales Soar 132% In September

gold-bullionDespite the ongoing slump in the price of gold, buyers of physical gold seem to sense that gold has reached bargain levels.  The September sales report from the US Mint shows that sales of the American Eagle gold bullion coins soared by 132% over the previous month.

September sales of gold bullion coins totaled 58,000 ounces, up from 25,000 ounces in August and 13,000 ounces last year.  Sales of gold bullion coins reached the highest level of the year since January when the Mint sold 91,500 ounces.

Despite the monthly increase, sales of gold bullion coins remain weak compared to previous years.  Year to date 2014 sales total 379,000 ounces compared to 704,000 ounces in the comparable prior year.

Gold has reached what some think is a critical support level in the $1200 range, a point from which gold has rebounded three times in the last two years.

Courtesy: Kitco.com

Courtesy: Kitco.com

With the stock and bond markets delivering robust returns to investors due to the unprecedented easy money policies of the Federal Reserve interest in gold has diminished greatly.  History has shown time and again that the best time to invest in an asset class is when the crowd thinks there is no reason to buy.

Sales of gold bullion coins have been steadily declining since 2009 when sales soared to almost 1.5 million ounces.  Sales of gold bullion coins by year since 2000 are shown below.

Based on the present sales rate of the American Eagle gold bullion coins, total sales for 2014  could drop to the lowest level since 2007.

American Eagle Silver Bullion Coin Sales Soar 100%

silver eagleSales of the US Mint American Eagle silver bullion coins has been extremely robust ever since the financial system can close to collapse in 2008.  Prior to the financial crisis sales of the silver bullion coins averaged about 9 million coins per year.

Over the past five years, despite the large correction in the price of silver, yearly sales of silver bullion coins have run well over 30 million coins per year with sales reaching an all time record high of almost 43 million coins in 2013.

Purchasers of physical silver bullion coins buy for the long term to diversify their wealth and hedge against ruinous monetary and fiscal policies fostered by both the government and the Federal Reserve.  While the financial system has been held together over the past five years by the Fed’s zero interest rate policy and money printing, the long term financial health of not only the United States but the world is beginning to look increasingly fragile as debt levels continue to explode world wide resulting in a financial system leveraged beyond comprehension.

Silver has dipped below $17 per ounce this year, off 13% on the year after plunging by 36% in 2013.  While this decline has obviously been painful for silver investors, it has put silver in the bargain bin and silver bullion coin investors are responding accordingly.  If silver bullion coin sales continue at the current pace, sales for all of 2014 could hit an all time high.

Courtesy: Kitco.com

Courtesy: Kitco.com

The US Mint reports that September sales of the silver bullion coins for September 2014 totaled 4,140,000 ounces, double August sales of 2,007,500 and up 37.4% from September sales of the prior year.

Due to a slump in sales during the summer months, year to date sales of silver bullion coins through September are running behind comparable prior year sales.  Year to date sales of the American Eagle silver bullion coins through September 30, 2014 totaled 32,251,000 down from 36,088,000 from the prior year.

Since 2000 investors have purchased over 300 million of the one ounce US Mint silver bullion coins as shown below.

Silver American Eagle Bullion Coin Sales in Summer Slump

silver eagleLet’s face it – no one likes to invest when prices are falling, whether it be stocks, bonds, gold, or silver.  Nonetheless, history has shown time and time again, across all asset classes, that investing after prices have collapsed and when there seems to be little reason to buy is usually the exact right time to buy.

This is something that investors in gold and silver may chose to ponder as demand for precious metals continues to decline.  The demand for both gold and silver has fallen as precious metal prices decline and investors turn to other rising asset classes such as real estate and stocks.  According to BullionVault which buys and sells physical gold and silver for its clients, precious metal demand  retreated to a four year low during August.

The weak demand for precious metals was reflected in the latest report from the US Mint which showed lower sales for both gold and silver American Eagle bullion coins (see Gold Bullion Coin Buyers Go On Strike).

Sales of the US Mint one ounce American Eagle silver bullion coins during August continued the sales slump that has lasted throughout the summer.  Although August sales of 2,007,500 coins increased slightly from sales of 1,975,000 in July, sales during August were off almost 45% from August 2013.

Sales of silver bullion coins during 2014 have declined substantially during the June to August time period compared to the prior year.  Total sales of silver bullion coins during the summer months of June through August 2014 totaled 6,674,500 ounces compared to 11,306,500 ounces during the previous year for a decline of almost 41%.

Earlier this year it appeared that the ever popular silver bullion coins would rack up another  record breaking year, above the record sales of 42,675,000 ounces during 2013.  Although sales of the American Eagle silver bullion coins have been robust during 2014, breaking last year’s record may remain an elusive goal.

Gold Bullion Coin Buyers Go On Strike – Sales Drop Again in August

1986-gold-eagleSales of the US Mint American Eagle gold bullion coins slumped again in August following the fall off in demand seen in July.   August sales of 25,000 ounces dropped by 16.6% or 5,000 ounces from July’s total of 30,000 ounces.

Although August 2014 sales of the gold bullion coins was more than double the 11,500 ounces sold in August 2013 the overall sales trend of American Eagle gold bullion coins has been in a steep slump during 2014 compared to the previous year.  Year to date sales of the gold American Eagle bullion coins as of August 31, 2014 totaled 321,000 ounces, a decline of almost 54% from comparable year sales of 691,000 ounces.

The price weakness in gold prices seen during 2013 continued this year as Gold Demand Falls 16% as Jewelry Purchases Decline 30%.

Gold demand fell 16 percent in the second quarter, led by declines in India and China, the World Gold Council said.

Global demand slipped to 963.8 metric tons from 1,148.3 tons a year earlier as jewelry purchases fell to the lowest since the fourth quarter of 2012, the London-based council said today in a report. China fell behind India as the largest consumer, with global jewelry buying dropping 30 percent and bar and coin demand down 56 percent. Mining companies hedged 50 tons as they continued selling future output.

Gold slid 28 percent in 2013, the most in three decades, as investors lost faith in the metal amid expectations U.S. policy makers would cut stimulus as the economy strengthens. Last year’s price drop spurred jewelry, coin and bar demand, particularly in China. Indian bullion buying has slowed as the government restricted imports to curb a current account deficit.

Global jewelry demand declined to 509.6 tons in the latest quarter, the least since the final three months of 2012. China’s purchases slipped 45 percent and those in India fell 18 percent, with the countries together accounting for almost 60 percent of world jewelry consumption. Buying rose 15 percent in the U.S. and 21 percent in the U.K. as consumer confidence rose, it said.

Global bar buying slumped 57 percent to 212.1 tons in the three months through June and coin demand slid 50 percent to 46.3 tons. Global consumer demand was down 42 percent to 784.9 tons, according to the report.

Total consumption in China, which overtook India as the biggest user last year, dropped 52 percent to 192.5 tons, the council said. Indian demand fell 39 percent to 204.1 tons, returning as the largest purchaser on a quarterly basis for the first time since the end of 2012.

The decline in demand for gold seems to be feeding upon itself as lower prices beget lower demand.  As gold prices climbed towards $2,000 an ounce during 2011 buyers tripped over each other to get into gold.  Ironically, buyers have now gone on strike as gold has become available at bargain prices.

The sale of gold bullion coins has been in a downward slump since 2009 when sales soared to record levels during the height of the financial meltdown.  There are many things happening in the world today that cause serious people to think that 2009 was just a warm up for what’s to come next – if this is correct, the demand for gold could turn sharply higher in a very short period of time.

Total gold bullion coin sales through August 2014 are shown below.

Based on the year to date figures, gold bullion coin sales could well end the year at about half of 2013 totals.

Gold American Eagle Bullion Coin Sales Soar 37% in June – Will Gold Outperform Stocks in 2014?

2014-proof-gold-eagleSales of the US Mint American Eagle gold bullion coins soared in June to 48,500 ounces from the previous month of May during which sales totaled 35,500.  Demand for gold bullion coins, however, has been relatively soft compared to previous years.

June sales of the gold bullion coins were down from the year ago period when 57,000 ounces were sold during June 2013.  At the current sales pace 2014 annual sales of the gold bullion coins would come in at roughly 500,000 ounces down significantly from total sales of 856,500 ounces during 2013.  Sales of the American Eagle gold bullion coins hit a record high of 1,435,000 ounces during 2009 when the financial system was still in intensive care and the Federal Reserve initiated a massive money printing campaign to “save” the world.

Gold should always have a presence in an investment portfolio but since mid 2011 stocks have become a powerful competing investment alternative to precious metals. The easy money policies of the Federal Reserve have served to inflate asset values of stocks and bonds to dangerously overvalued levels according to many analysts.

Will stocks and bonds continue to enjoy easy gains of 20 to 30 percent a year or will the entire house of cards built on easy printed money come tumbling down when the world least expects it?  Just this week the Bank for International Settlements (a consortium of the world’s biggest central banks) issued an alarming warning about growing levels of debt and the dangerous unintended consequences of zero interest rate policies.

The report issued by the Bank for International Settlements (BIS) noted that “Overall, it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally.”  The head of the BIS’s economic department further noted that  “Financial markets are euphoric, in the grip of an aggressive search for yield…and yet investment in the real economy remains weak while the macroeconomic and geopolitical outlook is still highly uncertain.”  The BIS noted the obvious when it cautioned that the ultra low levels of interest rate due to financial repression by central banks is encouraging further borrowing but an eventual rise in interest rates will amplify the problem of excessively high levels of debt, a consequence that no one seems prepared for.

So who needs gold when stocks are heading straight up and the consensus is that this wealth machine of easy money and asset inflation is unstoppable?

Gold, silver and stocks

At some unknowable point in time and for some unpredictable reason the euphoria of the credit bubble created by the central banks will burst just as all bubbles in history have burst.  The resulting financial chaos that ensues from the bursting of a central bank induced credit bubble will be calamitous since the situation could well become uncontainable by world monetary authorities.  As the BIS notes, “keeping interest rates unusually low for an unusually long period can lull governments into a false sense of security” whereby they continue to borrow vast amounts of low cost funds to such excess that further expansion of government borrowings become impossible.  Governments that are unable to finance additional borrowings when the next economic downturn comes will turn to their only savior – the central banks.  Unable to stimulate the economy through rate cuts since rates are already at zero, central banks will be forced to monetize government debts on a monumental scale and when this day arrives we should all want to have a heavy percentage of our portfolios in gold.

The current mania for paper assets seems to have even infected China and India who have historically turned to gold as a safeguard against profligate governments and paper money backed only by the promises of lying politicians.   According to the Wall Street Journal demand for gold is expected to decline in both China and India during 2014.

The crowd seems to be leaning heavily towards paper assets and away from gold, suggesting that a turnaround is probably forthcoming.  Gold has already had its correction and is now on track for what will probably be a historic rally.  Consider that despite widespread bearishness on gold, the price during 2014 has held its own and is actually up on the year.  From a price of $1,225 per ounce at the start of the year gold has moved up to $1,326, not exactly a sign of weak demand.

Silver American Eagle Bullion Coin Sales Plunge in June

silver eagleSales of the one ounce American Eagle silver bullion coins plunged in June from both the previous month and previous year.  After hitting sales of almost 4 million ounces during May the US Mint reports that sales of the silver bullion coins for June totaled only 2,682,000.

June sales plunged by over 32% from the prior month and by almost 18% compared to June 2013  when sales were 3,275,000 ounces.  Monthly sales of the silver bullion coins can show dramatic month to month changes based on supply and demand so it is difficult to read much into the current month’s sales figures.

Reflecting the drop in current demand the US Mint recently suspended its allocation program which had been implemented a year ago in the face of soaring demand for silver bullion coins during 2013.  Sales of the American Eagle silver bullion coins reached a record during 2013 with sales of 42,675,000 ounces, up 26 % from 33,742,500 ounces during 2012.

The American Eagle silver bullion coins remain extremely popular with small investors and sales have remained extremely robust ever since the near implosion of the financial system during 2008.  Sales of the silver bullion coins prior to 2008 ran from eight to ten million ounces per year compared to yearly sales of 30 to 40 million ounces per year after 2008.

Sales of the American Eagle silver bullion coins could easily hit another all time record high during 2014 if sales continue at their current pace.  If sales for the next six months match the first six months, sales of the silver bullion coins for 2014 could come in at close to 50 million ounces, shattering last year’s record high sales of 42,675,000.

The American Eagle silver bullion coins cannot be purchased by individuals directly from the U.S Mint.  The coins are sold only to the Mint’s network of authorized purchasers who buy the coins in bulk based on the market value of silver and a markup by the U.S. Mint.  The authorized purchasers sell the silver coins to coin dealers, other bullion dealers and the public.  The Mint’s rationale for using authorized purchasers is that this method makes the coins widely available to the public with reasonable transaction costs.

Shown below is a graph of sales of the silver bullion coins by year since 2000.

Soaring Gold and Silver Prices Should Not Be a Surprise to Anyone

bars-of-goldThe precious metal markets caught on fire in a big way today.  Gold prices surged the most in nine months by over $40 per ounce and silver closed in on $21 per ounce.  After losing 28% last year as short term hot money investors sold out their holdings, gold and silver were ready for a huge rally from both a fundamental and technical standpoint (see Why Gold and Silver Could Outperform Every Other Asset Class in 2014).

Precious Metals June 19, 2014

METALS PRICE CHANGE PER CENT GAIN
GOLD $1319.00 +40.50 3.17%
SILVER $20.89 +0.88 4.45%
PLATINUM $1472.00 +24.00 1.66%
PALLADIUM $841.00 +12.00 1.46%

The reasons for today’s huge gains in precious metals varied in the mainstream press but soaring prices should have been no surprise to long term investors who understand why gold and silver should be a part of every portfolio.

Gold and silver constitute a fundamental defense for wealth preservation against the rapidly eroding value of paper currencies backed by broke governments which is Why All Governments Hate Gold.

The various governments of the world and their central banks produce and distribute a product – paper currencies. Those currencies are backed by confidence, faith, and credit, but not by gold, oil, or anything real. Those currencies are digitally printed to excess, since almost all governments spend more than their revenues. The UK, Japan, and the USA are prime examples.

Politicians want to spend more money, but they also need to maintain the illusion that the money is still valuable, that it will retain most of its purchasing power over time, and that inflation is under control. The illusion weakens when food, gasoline prices, and other consumer goods are wildly rising in price. At a more abstract level, gold indicates the same lack of confidence in the printed pieces of paper that our central banks distribute.

If last year’s price correction shattered your conviction in owning gold and silver please consider The Fundamental Reasons for Owning Gold and Silver Are Stronger Than Ever.

One of the best methods for protecting wealth against a constantly depreciating paper currency is to own precious metals.

The bull case for precious metals remains intact as central bankers worldwide have become the lenders of last resort for nations that have exhausted their borrowing capacities.  Very little has changed since 2008 when the world financial system stood at the abyss of collapse.  Unsustainable debt levels continue to increase even as the capacity to service the debt diminishes.

Virtually every government in the world has taken on debts and liabilities that are clearly unsustainable.  Governments “don’t go broke” is the sustaining mantra for those with faith in paper currencies but governments do and will continue to print money that accelerates the loss of purchasing power of fiat currencies.  Please consider the following charts courtesy of John Mauldin Economics.

Eventually, as people realize that the central bank emperors have no clothes it will become clear Why There is No Upside Limit for Gold and Silver Prices.

The increase in the value of gold and silver is due to the fiscal and monetary policies of nations struggling to deal with massive levels of debt – policies that virtually guarantee a continued rise in the price of gold and silver.  Central banks, having exhausted all conventional means of monetary easing, have moved on to the last resort option of quantitative easing and currency debasement.

Government officials argue that unprecedented deficit spending and quantitative easing are necessary to stimulate economic  growth, but this theory has not worked in the real world.  Despite trillions in stimulus spending,  job creation and economic growth have been extremely weak and are likely to remain so according to economists Kenneth Rogoff and Carmen Reinhart who wrote This Time Is Different: Eight Centuries of Financial Folly.  According to Rogoff and Reinhart, economic growth is subpar when public sector debt exceeds 90% of GPD which the U.S. and many other developed nations have already surpassed.  In addition, a recovery of the job and housing markets after a financial crisis take many years due to the burden of excessive levels of debt.  Ultimately, Rogoff and Reinhart predict that austerity measures will need to be imposed along with some type of debt restructuring.

Is the U.S. capable of reducing spending and  instituting austerity measures? Cutting deficits means cutting payments to a long list of incomeless recipients who really don’t care where the entitlement money comes from.  Those still actually paying taxes will object strongly to any proposed tax increase to fund government spending.  Unable to cut spending or raise taxes leaves the Government with one bad option – print more money.

Politicians, who value getting elected above all else, are likely to strong arm the reliably compliant Federal Reserve to “come to the rescue” again with additional printed dollars.   In the minds of politicians and Federal Reserve officials, there will always be very compelling reasons to continue borrowing and money printing.

A nation that has reached the limits on taxation and borrowing has few viable policy options other than a continuing series of quantitative easing programs.  Current government policies, if left unchanged, virtually guarantee a continued increase in the price of precious metals.