May 28, 2022

Yes, You Can Still Buy Gold Coins

There has been a lot of talk about gold being unavailable to settle futures contracts and the like but that is paper gold they are talking about.

If you love to hold and touch and possess physical gold (who wouldn’t) then yes – you can still buy gold bullion coins at retail but perhaps not for much longer.

Although you can still buy gold bullion coins, the selection and availability are severely limited due to a huge increase in demand, decreased mine production, and mint closures. Toss in the facts that the world is in an economic depression (by any definition of the word) and governments worldwide are flooding the global economy with helicopter money makes one wonder how much longer it will be before gold coin stocks at dealers are exhausted.

I have been buying gold coins for many years and I have never seen such a limited selection in all categories of gold coins. Other than the American Eagle and the American Buffalo dated 2020 there are no other contemporary US Mint gold coins available!  Pre 1933 coins gold coins are available but the selection is sparse.

Here are a few examples from Provident Metals, a leading online retailer of all sorts of bullion and coins. I have always had good experiences buying from Provident but please note that there are also many other reputable dealers out there who are also authorized purchasers from the US Mint.

2020 American Eagle 1 oz Gold Coin BU

In Stock  IRA eligible
Item is available and ready to ship!
Pricing and quantity as follows

1-9 coins
$1,905.88 cash
$1,925.74 bitcoin
$1,985.34 credit card

The 2020 American Buffalo 1 zo gold coin BU is also available for pre order with an estimated ship date of April 27th.  The pricing on the Gold Buffalo is $180 over spot price and on the Gold Eagle is $160 over spot price.

Given the scarcity of inventory, I am surprised that the premiums are not higher.

The Top 10 Biggest Gold Producing Countries in the World

pygmy-possum-coinThe Perth Mint presents a neat infographic on the world’s top 10 gold producing countries.

China, which loves gold more than anything, came in as the number one producer with annual output of 370 metric tons.  According to the latest official numbers from the IMF, China holds the world’s fifth largest reserves of gold with holdings of 33.9 million ounces.  Unofficially, many analysts say that actual gold reserves held by China are far larger than the “officially” reported numbers.

The second largest gold producer in the world is Australia (home of the Perth Mint) which produced 250 metric tons of gold in 2012.

The United States came in at third place with annual production of 230 metric tons.  As a dubious consolation for those who hate to see the U.S. come in third, keep in mind that the United States still reigns supreme in the number one spot for production of paper currency.

The Perth Mint, which has been producing gold coins since 1899 has produced (in my opinion) some of the world’s most artistic gold and silver coins.

New Gold and Silver Baseball Commemorative Coins Highlight Lack Of Innovation By U.S. Mint

How Congress Stifles Innovative Coin Designs By U.S. Mint

Ever wonder why the U.S. Mint shows a lack of innovation in coin design compared to other world mints?  Here’s part of the reason as detailed by Mint News Blog:

Many coin related bills are introduced each year, but only a small number become law. In order for a bill to become law, it must be passed by both the House and Senate and then signed into law by the President. Under Congressional rules, two-thirds of each body must co-sponsor a bill before it is even put up to a vote, which is the hurdle that many bills cannot meet. Another rule limits the number of commemorative coin programs to only two per year.

The most recent bill to become law was the National Baseball Hall of Fame Commemorative Coin Act. The bill H.R. 2527 was introduced on July 14, 2011, passed in the House of Representatives on October 26, 2011, passed by the Senate on July 12, 2012, and signed by the President on August 3, 2012.

The program calls for the minting and issuance of up to 50,000 $5 gold coins, 400,000 silver dollars, and 750,000 clad half dollars in recognition and celebration of the National Baseball Hall of Fame. These coins will be issued only during the one-year period beginning on January 1, 2014.

Mint New Blog goes on to discuss how the coin design will be unique with the reverse of the coin made convex and the obverse concave to enhance the resemblance to a baseball.  The coin may resemble a recently produced dome shaped coin issued by the Royal Australian Mint as shown below.

The commemorative baseball coin would represent the first innovation in coin design by the U.S. Mint since 2000 when the Library of Congress $10 coin was produced, which was the first and only US Mint bimetallic coin.  While the new baseball coin will certainly increase public interest in precious metal coins, Congress should grant the U.S. Mint more latitude to produce a wide variety of innovative coins without an onerous legislative process.

Gold Bullion Coin Sales Plunge 63% In November and 20% YTD – Have Americans Given Up On Gold?

Total sales of American Gold Eagle bullion coins plunged in November according to production figures from the U.S. Mint.

Total sales of gold U.S. Mint bullion coins declined by 63.4% in November from the previous year.  Sales of U.S. Mint gold bullion coins declined by 19.5% on a year to date basis through the end of November.  A total of 41,000 ounces were sold in November 2011 compared to sales of 112,000 ounces in November 2010.  Year to date sales through November totaled 934,500 ounces compared to the previous year to date totals of 1,160,500 ounces.

The reduction in the purchase of U.S. Mint gold bullion coins continues a trend of reduced sales since the record breaking year of 2009 when a total of 1,435,000 ounces were sold.  Total gold bullion sales  for 2011 will probably slip below one million ounces for the first time since 2009.  If sales decline in December by the same percentage amount as in November, total 2011 sales of gold bullion coins will come in at 956,500 ounces.

A summary of gold mint bullion coin sales since 2000 is shown below.

Gold Bullion Sales Since 2000

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 934,500
Total 7,184,000

Why would gold bullion coin sales be plunging when gold has been steadily rising?  Have Americans given up on gold?  Let’s look at various trends in gold sales to get some perspective.

-Annual sales of gold bullion exceeded a half million ounces only once before 2008.  The financial crash of 2008 precipitated concerns about the integrity of both the banking system and the U.S. dollar, causing a huge increase in demand for physical gold.  Gold bullion sales exploded higher in 2008 and sales for 2011 remain far above levels seen prior to 2008 despite the recent drop in sales.

-Based on the current price of gold, the total value of all gold bullion purchased from the U.S. Mint since 2000 is $12.6 billion.  This amount represents only a fraction of the amount of investment dollars that have flowed into gold over the past decade.  In addition to purchasing physical gold, investors now have the option to purchase gold through gold trust ETFs.  The amount of money poured into the gold trust ETFs is many multitudes greater than the investment in physical gold bullion coins.  For example, since their inception in 2005, the combined gold holdings of the SPDR Gold Shares Trust (GLD) and the iShares Gold Trust (IAU) have grown to 47.2 million ounces valued at $82.5 billion.

-Gold ETFs have grown exponentially from their inception a short six years ago but the largest gold ETF, the SPDR Gold Shares Trust (GLD), has not been able to exceed its record gold holdings of 1,320.47 tonnes reached on June 29, 2010.  In addition, billionaire John Paulson recently liquidated a substantial portion of his GLD holdings, although much of the selling may have been forced due to severe losses in his hedge funds.

-Gold trader sentiment is either bullish or bearish, depending on who you talk to.

-Central banks, which have been increasing their purchases of gold since 2000, have sharply accelerated their purchases of gold bullion over the past several years.  Central banks from Asia and Latin America have accounted for most of the increased purchases.

-According to the World Gold Council, global gold investment demand increased by 33% in the 2011 third quarter compared to the prior year.  Investment demand for gold bars and coins increased by 29% and global gold holdings by gold trust ETFs increased by almost 78 tonnes.  Demand for gold increased notably during the third quarter in Europe and China.

While it is indisputable that global gold demand has increased, the appetite for gold by U.S. investors seems to be diminishing.  What do you think?

 

 

As Gold Hits Record Highs, Perth Mint Finds Success in Smaller Sized Coins

As the price of gold continues to climb, the cost of purchasing a one ounce gold bullion coin is approaching $1,600.  In order to provide the opportunity to own gold within a more reasonable price range, innovative mints have begun offering smaller sized gold coins.   In April 2010, the Perth Mint of Australia introduced a half gram 99.99% pure gold coin named the Mini Roo.

Struck with a fineness of .9999, each Mini Roo contains 0.016 troy ounces of gold. The coins have a diameter of 11.60 mm and thickness of 0.70 mm. By comparison, the one ounce Australian Gold Kangaroo has a diameter of 32.60 mm and thickness of 2.80 mm. The half gram Mini Roo and 1 oz. Gold Kangaroo are shown side by side in the image below.

According to the Perth Mint’s website, the Mini Roo is currently priced at $54.18. A major precious metals dealer’s website currently quotes the price of a single one ounce 2011 Gold Kangaroo at $1,668.23.

Alexandra Lucchesi of the Perth Mint Public Relations Department was kind enough to some insights on the objectives and sales levels of the diminutive gold coins.

Gold and Silver Blog:  Can you provide us with any indication of the sales levels of the Mini Roo half gram gold coin and how it compares to the sale of one ounce coins?

Alexandra:  To compare sales of the Mini Roo and 1oz gold bullion coins would not be a valid comparison.  The issues vary considerably in weight and price, and therefore, do not encompass the interest of the same individual and institutional investors.  Furthermore, the Mini Roo is targeted more toward collectors and gift buyers, whereas the gold coins of the Australian Kangaroo and Lunar series are directed more toward investors.

Gold and Silver Blog:  Has the half gram gold coin met sales expectations and have sales increased as the price of gold has climbed?

Alexandra:  The release of the Mini Roo has met our objectives at both wholesale and retail levels, with sales exceeding more than 15,000 2010-dated coins to date since being released in April last year.  With the 2011 coin only just released a fortnight ago [April 5, 2011], we can not yet estimate sales for the remainder of the year, although, with periodic prompted promotion, we are also anticipating favourable sales of this issue.

Gold and Silver Blog:  Will the Mini Roo become a regular annual issue?

Alex:  A Mini Roo was first introduced to the market in April 2010.  Complementing the world renowned Australian Kangaroo gold bullion coin series, the Mini Roo is expected to be released each year and will continue to portray the identical design as, or a simplified version of, the iconic Australian Kangaroo annual issues.

Gold and Silver Blog:  I would suspect that the much lower cost of the Mini Roo allows greater participation by investors and collectors as well as placing the Mini Roo within the affordable gift category.  Was the higher price of gold the determining factor in deciding to produce the half gram coin?  Have the offerings of smaller sized gold coins resulted in an increased number of new customers?

Alexandra:  That is correct.  The Perth Mint introduced the Mini Roo to encourage a broader audience to start investing in, or collecting, precious metal coin products.  In addition, the smaller coin was perfect to capture the interest of those who, traditionally, were unable to afford the classic Australian Kangaroo bullion coin sizes.  The timing for the initiative was also enhanced by the rising price of gold.  The lower price point of the button-sized Mini Roo does give individual precious metal investors, coin collectors and gift buyers the opportunity to purchase a pure gold coin at an affordable price featuring a similar design as its traditional counterpart.


The Perth Mint Australia

Gold Coin Shortage and Sales Trends, Dollar-Gold Relationship

With gold fluctuating around the $900 level, let’s take a look at some thought provoking gold and silver related stories from various blogs and news sites.

Jim Rogers Interview

Incredibly, he claims that there is no shortage of gold and silver coins.

What happened was all the dealers went and bought huge silver supplies back when silver was at $20 and now their stuck and they don’t want to take a loss and so they are telling people they don’t have coins. I promise you sir if you offer $25 for silver coins you’d get all you wanted. There is no shortage.”

He goes on to say the same thing about gold coins.

Gold Coin Shortage Likely To Become Chronic

And here’s the more popular conclusion- Yes, there is a gold coin shortage. This is supported by anecdotal evidence, gold coin rationing by world mints, and high prices paid for physical gold and silver in liquid markets.

APMEX Gold and Silver Sales Data

Some first hand sales data from precious metals dealer APMEX. From 2007 to 2008 the number of orders for gold increased 262% and the number of orders for silver increased 358%.

With economy tanking, ‘liberty’ coins made of silver are paying off

Remember the Liberty Dollar? It seems that in commerce, most vendors are more than happy to take them in lieu of paper money.

Where Do You Keep Your Gold?

If you are hoarding physical gold, where do you keep it? Here’s an examination of the pros and cons of various methods of gold storage.

Dollar Gold Correlation

Briefly the US Dollar and Gold had a price correlation of 100%, taking into consideration the prior 15 trading days. The odd correlation has recently reversed sharply.

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

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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Gold and Silver News & Headlines for October 29

New 49’ers seek California Gold

It’s the great new outdoor activity of our time. Prospecting for Gold.

3 men with gold confuse sheriff’s sale

Three men attempt to buy foreclosed properties with bags of gold and silver. The sheriff conducting the sale opines that the three men are “anarchists” engaging in “paper terrorism.”

The Coin Market As We See It

A market report from Legend Numismatics. The last section is of interest. Would be buyers of gold bullion are increasingly turning to generic gold coins instead, meaning semi-collectible coins such Gold Double Eagles from the early 1900’s.

New policy on purchase and sale of silver Libertad coins

A new policy from a Mexican bank with over 800 branches. They will raise their re-purhcase price for silver coins to align with the re-sale prices and try to match public supply and public demand. Basically, they will establish a price for silver based on actual market forces rather than Comex prices.