April 20, 2024

Pace of US Mint Gold and Silver Bullion Sales Ahead of Last Year

In the past week, the United States Mint sold 833,500 ounces of silver bullion and 31,500 ounces of gold bullion. Available products included the American Silver Eagle in one ounce size and the American Gold Eagle in one ounce or three fractional sizes.

For the year to date, the US Mint has now sold 8,152,500 ounces of silver, which is running well ahead of the pace of sales from the previous year. During 2010, the US Mint had sold 5,642,500 ounces through the end of February. Annual sales eventually reached a record 34,662,500 ounces from Silver Eagles, with an additional 875,000 ounces from the America the Beautiful Silver Bullion Coins.

Gold bullion sales for the year to date are now 189,000. Once again, this is running ahead of last year’s pace when the Mint sold 169,000 ounces through the end of February. By year end, sales had reached 1,220,500 ounces worth of Gold Eagles, plus 209,000 ounces from the 24 karat Gold Buffalo coins.

US Mint Bullion Coin Program Sales 2/16/2011 (ounces)

Prior Week Month to Date Year to Date
American Silver Eagle 833,500 1,730,500 8,152,500
American Gold Eagle 31,500 55,500 189,000
America the Beautiful Silver 0 0 0
American Platinum Eagle 0 0 0
American Gold Buffalo 0 0 0

This month the US Mint began sales of the fractional weight 2011-dated American Gold Eagles. Throughout January, only the one ounce size was available bearing this year’s date.

Fractional Gold Eagle sales for the month so far include 100,000 of the one-tenth ounce size coins, 16,000 of the one-quarter ounce coins, and 5,000 of the one-half ounce coins. In recent years, the one ounce size coins have accounted for the bulk of bullion sales.

Weekly US Mint Gold and Silver Bullion Coin Sales

After the furious pace of sales experienced during January for the United States Mint’s American Silver Eagle and American Gold Eagle bullion coins, the current month is progressing at a more measured pace. For the week ending February 9, 2011, the US Mint recorded sales of 847,000 ounces worth of silver and 18,000 ounces worth of gold.

The US Mint offers several bullion coin options in order to provide investors with a convenient and cost effective method for physical precious metals investment. The programs include 22 karat gold coins in one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce sizes; 24 karat gold coins in one ounce size; .999 fine silver coins in one ounce and five ounce sizes; and platinum coins in one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce size.

For the year to date, the US Mint has only offered the one ounce Silver Eagle and 22 karat Gold Eagle bullion coins. The Gold Eagles are available in one ounce size bearing the 2011 date, with some remaining amounts of the fractional weight coins bearing the 2010 date. The remaining bullion coin options have not yet been released.

US Mint Bullion Coin Program Sales 2/9/2011 (ounces)

Prior Week Month to Date Year to Date
American Silver Eagle 847,000 897,000 7,319,000
American Gold Eagle 18,000 24,000 139,500
America the Beautiful Silver 0 0 0
American Platinum Eagle 0 0 0
American Gold Buffalo 0 0 0

Last year, the US Mint recorded sales of 34,662,500 ounces worth of American Silver Eagles and 1,220,500 ounces worth of American Gold Eagles. The amount of silver bullion sold represented an all time record.

Monthly American Silver Eagle Sales Already in Record Territory

Gold and silver bullion coin sales at the United States Mint are showing exceptional strength. In the past week, authorized purchasers ordered 1,181,000 ounces worth of American Silver Eagles and 32,000 ounces worth of American Gold Eagles.

For the Silver Eagle bullion coins, total sales for the month have now risen to 4,588,000 ounces. With the month not even two-third complete, this total already represents a new record high for monthly silver bullion sales. The previous monthly sales record of 4,260,000 ounces was set in November 2010.

On January 3, the US Mint had begun sales of the 2011 Silver Eagle. Strong initial sales are typical when newly dated coins are available, however the strength has persisted, suggesting other factors are at play. Some new investors may making purchases following silver’s stellar performance during 2010. Existing investors may be adding to positions after silver experienced a brief 7% decline.

US Mint Mint Bullion Coin Program Sales 1/19/2011 (ounces)

Prior Week Year to Date
American Silver Eagle 1,181,000 4,588,000
American Gold Eagle 32,000 75,500
American Platinum Eagle 0 0
American Gold Buffalo 0 0

For the year to date, the US Mint has now sold 75,500 ounces worth of Gold Eagle bullion coins. This is comprised of 73,000 one ounce coins, 1,000 one-half ounce coins, 2,000 one-quarter ounce coins, and 15,000 one-tenth ounce coins. Sales of the 2011-dated one ounce coins began on January 3. Sales of the fractional weight coins are remaining 2010-dated coins.

The month to date total for gold bullion sales now approaches the full month sales level for the year ago period, when 85,000 ounces were sold.

US Mint Sells 1,429,500 Ounces of Gold Bullion During 2010

The United States Mint sold less gold bullion during 2010 than the previous year, as measured in ounces. Across their offerings of American Gold Buffalo and American Gold Eagle bullion coins, sales reached 1,429,500 in the current year compared to 1,625,000 in the prior year.

The American Gold Buffalo is struck in one ounce of 24 karat (.9999 fine) gold and carries James Earle Fraser’s classic design from the Buffalo Nickel. The 2010-dated coins were first available on April 29, 2010 and remained available for ordering by authorized purchasers until late September 2010.

The American Gold Eagles are struck in a composition of 22 karat ( .9167 fine) gold and carry the obverse design of Augustus Saint Gaudens’ classic double eagle. A range of weights are available to provide greater investment flexibility. The one ounce 2010 Gold Eagle went on sale January 19, 2010, with the one-half ounce, one-quarter ounce, and one-tenth ounce size coins on sale June 10. The coins remained on sale through the end of the year.

For the calendar year, the US Mint sold the following quantities of gold bullion coins:

Coins Total oz.
American Gold Eagle 1 oz 1,143,000 1,143,000
American Gold Eagle 1/2 oz 46,000 23,000
American Gold Eagle 1/4 oz 62,000 15,500
American Gold Eagle 1/10 oz 390,000 39,000
American Gold Buffalo 1 oz 209,000 209,000
Total 1,429,500

The drop in total ounces sold from the prior year is 195,500, representing a decline of about 12%.

Despite the drop in ounces sold, there was likely an increase for the year based on total dollar sales due to the higher price of gold. For 2010, the price of gold was up more than 27%.

Authorized purchasers are allowed to order gold bullion coins directly from the US Mint in minimum quantities of 1,000 ounces. The price paid is based on the London PM Gold Fix price following the day of order.

Which is Better to Own – Gold Bullion or Gold Stocks?

Gold investors have two basic choices – buying gold bullion or buying shares in companies that produce or own gold. As we examine the two basic investment vehicles available to gold investors, it becomes apparent that choosing the best investment option can be a complex decision. Some of the questions that a gold investor should consider include the following.

What has produced better investment results – owning gold bullion or a gold mutual fund?

To gain insight into investment returns, let’s compare how an investment in gold bullion compared to investing in the Tocqueville Gold Fund (TGLDX).  I selected TGLDX since it is one of the best performing, actively managed gold funds with a long term track record.  An investment of $10,000 in the Tocqueville Gold Fund in 2000 would now be worth approximately $86,000 for a stunning return of 860%.   A $10,000 investment in gold bullion in 2000 would currently be worth approximately $46,400 or a 467% return.

Since gold mining companies are leveraged to the price movement of gold, it is not entirely surprising that the gold stocks would outperform the metal. Leverage, however, works both ways and in 2008, when gold experienced a price correction, TGLDX dropped from 65 to 19, a horrendous decline of 71%, whereas gold bullion experienced a normal bull market correction of only approximately 25%.   For those investors unwilling to tolerate huge price fluctuations, bullion seems a better way to go. When gold is moving up, expect the gold funds to outperform the metal.  In 2010, TGLDX has increased 42.7% compared to an increase in gold of 27%.

TGLDX Chart : Yahoo Finance

Gold 2000-Present: Kitco

If I decide to invest in gold stocks instead of the bullion, how many different stocks should I buy?

One of the primary tenets of sound investing is to always diversify.   Although selected gold stocks have vastly outperformed the price movement in bullion, many have not and some have dramatically underperformed.   Evaluating the prospects of an individual gold mining company is difficult, even for the experts.  An investor choosing to allocate a large percent of assets into gold stocks is probably better off (from a risk standpoint) investing in a well managed gold fund with a solid long term track record.  For an investor that does not want to hold physical gold nor own individual gold stocks, investment in a gold ETF such as GLD, that tracks the price movement of the bullion, would be an option.

I don’t trust paper assets and want to hold only gold bullion – what are my options?

For a conservative, risk averse investor looking to protect the value of his money,  investing only in gold bullion is a sound strategy.  Holding actual bullion, however raises security questions on how and where to store the physical gold.  Investors who wish to have their gold stored on their behalf can chose from a variety of firms that securely store gold in protected and insured vaults.  For an investor storing gold on his own in a safe deposit box, it would perhaps be wise to diversify storage geographically by using more than one bank.

Is the tax treatment different for gold bullion versus gold stocks?

The IRS considers gold to be a collectible.  Gains on gold bullion or coins and ETF’s backed by physical gold and held for more than a year have a maximum tax rate of 28%, while positions sold in less than a year are taxed at ordinary income rates.   Gold stocks are considered capital assets by the IRS and standard capital gain tax rates apply to profits.

As nations compete with each other to devalue their currencies and the Federal Reserve engages in outright money printing, gold investors should be expecting substantial profits regardless of what investment vehicle is chosen.

US Mint Gold Bullion Sales Collapse in August

The US Mint’s published sales figures for the month of August show a stunning decline in the level of gold bullion sales. The monthly sales for their popular American Gold Eagle bullion coins measured just 41,500 ounces. This represents the lowest monthly total since June 2008, before the financial crisis took hold and led to a surge in bullion sales.

American Gold Eagle sales during August included 39,000 one ounce coins, 1,000 one-half ounce coins, 2,000 one-quarter ounce coins, and 15,000 one-tenth ounce coins to make up the total sales of 41,500 ounces. This represents a decline of more than 70% compared to the previous month and about 50% compared to the year ago period.

The US Mint’s other gold bullion offering, the 24 karat American Gold Buffalo also put in a lackluster month with sales of 15,500 of the one ounce coins. This is down from a monthly high of 70,500 ounces in May and the prior month total of 23,000 ounces. In the year ago period, the coins were not available.

Since the American Gold Eagle coins have been available continuously (amidst a few periodic suspensions), the monthly sales totals illustrate the pattern demand for the US Mint’s gold bullion coin. There have been a few other monthly drops over the course of the past few years and demand has always managed to recover.

Here are the monthly sales totals for American Gold Eagle bullion coins (in ounces) since June 2008.

Jun-08 15,500
Jul-08 50,000
Aug-08 86,000
Sep-08 113,000
Oct-08 121,500
Nov-08 116,500
Dec-08 176,000
Jan-09 92,000
Feb-09 113,500
Mar-09 136,500
Apr-09 147,500
May-09 65,000
Jun-09 116,000
Jul-09 86,000
Aug-09 82,000
Sep-09 115,500
Oct-09 115,500
Nov-09 124,000
Dec-09 231,500
Jan-10 85,000
Feb-10 84,000
Mar-10 102,000
Apr-10 60,500
May-10 190,000
Jun-10 151,500
Jul-10 152,000
Aug-10 41,500