August 13, 2022

January 2009 US Mint Gold, Silver, and Platinum Bullion Sales

Many track the tonnes in the trust for Gold and Silver ETFs in order to gauge the continuing growth in investment demand for precious metals. This year, I wanted to try my own version of tracking precious metals investment demand by reporting monthly sales totals for the US Mint’s bullion coin programs. Hopefully this will provide another aspect of information for investors to ponder.

Under normal circumstances, this information would be an excellent indicator for physical precious metals demand. However, we are not currently in an environment of normal circumstances.

The US Mint continues to ration sales of one ounce Gold Eagle and Silver Eagle coins. Additionally, they still have not yet begun offering Platinum Eagle or fractional Gold Eagle coins. This implies that there is an undefined amount of unmet physical demand which exists above and beyond the numbers. Nonetheless, I will get into the habit of posting this information.

January 2009 US Mint Bullion Sales
1 oz. 1/2 oz. 1/4 oz. 1/10 oz. Total oz.
Gold Eagle 92,000 92,000
Gold Buffalo
Silver Eagle 1,900,000 1,900,000
Platinum Eagle

Total ounces of gold sold during January 2009 was 92,000 ounces. This compares to 26,000 in January 2008. The amount does represent a decline from the prior month of December 2008 when 176,000 ounces were sold. However, as mentioned above, this may be a reuslt of ratoining and not necessarily decreased demand.

Total ounces of silver sold duing Janaury 2009 was 1,900,000 ounces. This is down from both the year ago period January 2008 when 2,170,000 ounces were sold and the prior month when 2,158,500 ounces were sold. Again, this might not necessarily be a result of decreased demand.

No platinum was sold during January 2009, as the US Mint has not resumed productoin after a suspension instated late last year.

US Mint Raises Premiums on Silver Eagle Bullion Coins (Again)

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

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

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

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

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

DEPARTMENT OF THE TREASURY

United States Mint

Notification of United States Mint Silver Eagle Bullion Coin Premium Increase

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

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

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

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

Silver Availability, CFTF Silver Investigation, Morgan Stanley Gold Forecast

As gold closes above the $900 level in US Dollars and reaches new all time highs in the euro, British pound, and Canadian dollar, let’s take a look at some recent gold, silver, and precious metals related stories that are worth reading.

Real Silver Availability

Examining the remarkably small amount of silver bullion actually available in the world, and the even smaller amount that’s available for sale.

Gold ETF inventory at new all-time high

Another day, another new all time high for GLD tonnes in the trust. This is the sixth new all time high in the last eight trading days.

Silver investigation: Stakes are enormous

An interview with former directors of the Division of Enforcement at the Commodity Futures Trading Commission which shed some light on the ongoing CFTF investigation of the silver futures market.

2009 American Gold, Silver, Platinum Eagles Still Missing

The US Mint’s entire slate of collectible 2009 American Eagle and 2009 American Buffalo products are missing. Will the US Mint forego production of these gold, silver, and platinum numismatic products? (Note: this article discusses numismatic products, not the bullion products, some of which are also missing.)

Gold to Gain Through 2012, Morgan Stanley Forecasts

I poked a little bit of fun about Morgan Stanley’s previous forecast that gold would reach $1,000 in 2012. Gold’s recent strength has apparently emboldened them to up their forecast to $1,075, still in 2012.

Platinum Tops $1,000, 2008 Average Price of Silver, Bearish call on Gold

A brief round up of some of the more interesting gold, silver, and precious metals articles and events from the past week.

Platinum Tops $1,000 on Stimulus Outlook; Gold, Silver Drop

Even as gold and silver fell, platinum continued its recent move and topped the $1,000 mark intraday for the first time since October.

Silver News and Views

Even though silver lost more than 25% during 2008, it’s average price for 2008 posted a gain of nearly 12%. The included chart of the annual average price of silver looks impressive.

Merrill Lynch says rich turning to gold bars for safety

An article on the highly publicized remarks from Merrill Lynch’s chief investment officer regarding gold. Wealthy clients want physical gold.

A Bearish Call on Bullion

The editors of gold timing newsletters are more bullish now than they have been in three and a half years. The author sees this as a bearish sign, even amidst the admission that government manipulation may play a role in the price of gold.

2008 Gold, Platinum & Silver Performance

As trillions of dollars in equity values were vaporized this year, a strong November and December performance pushed gold into positive territory by year end. Gold’s annual gain was 4.32%. This marks gold’s eighth consecutive annual gain. The “lost decade” for stocks, has been quite the opposite for gold. Silver and platinum were less fortunate, posting losses of 26.90% and 41.31% respectively.

(Figures calculated from Kitco’s London PM Fix prices)

The headline numbers only tell part of the story. I rounded up a bit more data which paints a more complete picture of the 2008 performance of gold, silver, and platinum.

Gold Silver Platinum
Dec 31, 2007 Close 833.75 14.76 1530.00
Dec 31, 2008 Close 869.75 10.79 898.00
Annual Change +36.00 -3.97 -632.00
Percentage Change +4.32% -26.90% -41.31%
2008 Low 712.50 8.88 763.00
Change from start to low -121.25 -5.88 -767.00
Percentage Change -14.54% -39.84% -50.13%
2008 High 1011.25 20.92 2273.00
Change from start to high +177.50 +6.16 +743.00
Percentage Change +21.29% +41.73% +48.56%

The first section of the table above shows the performance of gold, silver, and platinum from start to finish during 2008. The second section lists the lowest closing price for each metal during 2008, and calculates the percentage change from the start of the year to the low price. The final section lists the highest closing price for each metal during the year, and the percentage change from start of the year to the high price.

Some observations:

Often when the mainstream press writes about gold as a potential investment option, they usually caution that prices are “extremely volatile.” A look at the figures above shows otherwise. While it seemed like a year of extremes for gold, at its lowest it was down 14% and at its highest it was up 21%, probably making it one of the least volatile investments of 2008.

Platinum, which is starting to draw my interest, basically went straight up during the month of February to its peak price of $2,273 per ounce. Then it experienced three months of nearly continuous declines from mid-July to mid-October where it reached its low of $743 per ounce. At its high it was up nearly 50%, at its low it was down more than 50%. Briefly, the price of gold exceeded the price of platinum, but the situation has now reverted to the norm.

Silver experienced a similar plight, up more than 40% at its peak and down more than 40% at its low. The period of decline also took place from mid-July to mid-October. Many have pointed to the enormous concentrated short position taken by a handful of banks in July as responsible for the decline.

On a housekeeping note:

Sorry for the lack of posting on Gold and Silver Blog during the end of December. I should be back on a regular schedule for the new year. I aso plan to add some new sections to the site, which compile historical data relevant to gold and silver watchers. Thanks for reading and let’s make 2009 a great year!

Gold Backwardation, Tracking COMEX Depletion, Banks’ Gold and Silver Short Positions

Red Alert: Gold Backwardation

Posted late last week explaining the how gold went to backwardation for the first time in history. The implication is that backwardation will lead to a breakdown of the delivery mechanism for gold, which takes us to the next link…

Vaporize the COMEX

Tracking gold and silver deliveries from the COMEX versus registered inventory in COMEX warehouses. After today, gold is 43% depleted and silver is 37.1% depleted.

“On the fly” Gold and Silver COT Information

A small number of US banks continue to hold an ever increasing porportion of all commerical net short positions for gold and silver futures. Three US banks accounted for 66.97% of the net short gold positions, and two banks accounted for 98.64% of the net short silver positions.

Gold shines on

A brief piece published on Fortune outlining the bullish case for gold.

US Mint 2008 Gold and Silver Dwindle, 2009 Releases Delayed

The United States Mint recently released a memo to authorized bullion purchasers regarding the remaining 2008-dated bullion coins and the upcoming 2009-dated bullion coins.

The only 2008 dated bullion coins still being sold by the US Mint are the 1 ounce American Gold Eagle and 1 ounce American Silver Eagle. Final allocations for these coins will take place December 15, 2008. All of the fractional Gold Eagles, Gold Buffaloes, and Platinum Eagles are no longer available.

Sales of 2009-dated 1 ounce Gold Eagles and 1 ounce Silver Eagles will begin on December 29, 2008. Availability will be subject to allocation. The remaining 2009-dated bullion coins will be delayed. The US Mint cites “very limited” supplies of blanks from suppliers amidst high demand.

The full US Mint memo is reproduced below:

November 24, 2008

MEMORANDUM TO ALL AMERICAN EAGLE AND AMERICAN BUFFALO BULLION COIN AUTHORIZED PURCHASERS

SUBJECT: 2008 and 2009-Dated Bullion Coin Products

With the exception of the American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins, all 2008-dated bullion coins have been depleted. Weekly allocations will continue for these two products.

The final 2008 allocation for these coins will be provided on Monday, December 15, 2008.

There will be no bullion allocations during the week of December 22, 2008.

2009-dated American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins will be made available for sale via the standard allocation process on Monday, December 29, for pricing December 30 and order pick-up on Friday, January 2, 2009.

Allocations for these products will continue until the United States Mint is able to meet demand.

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

Thank you for your patience and your continued support of the United States Mint Bullion Coin Program.

Gold and Silver News & Headlines for November 21

Trump Alumn Fired Up About GoldandSilverNow

A former finalist from “The Apprentice” has started a peer-to-peer network for buying and selling gold and silver. The idea is that such a network would avoid the unavailability and long waits necessary to buy gold and silver from bullion dealers. Definitely an interesting concept.

Demand for Gold Hits a Record Even as Institutions Head for Exits

It’s a tug of war between institutional sellers and retail buyers.

Inventory at SLV declines modestly

Some great analysis of inventory and price for the iShares Silver Trust. Since July, amidst a sharp decline in the price of silver, there has been an influx of buyers of SLV rather than sellers.

The Six Biggest Myths about Gold

Buying Physical Silver at the Lowest Premium

If you’ve tried buying physical silver recently, then you are undoubtedly aware of the incredibly high premiums charged above market value. I wrote previously about the premiums for 100 ounce silver bars, which are traditionally a low premium method for acquiring silver. At the time of investigation, premiums were running from 40% to 50%  above the market price of silver.

Premiums for virtually all other methods of acquiring physical silver are also stubbornly high. American Silver Eagles, Canadian Silver Maple Leafs, and other government issued bullion coins carry premiums often well in excess of 50%. The same high premiums persist for generic silver rounds, small size bars, and bags of 90% junk silver. Even 1,000 ounce silver bars are now carrying premiums of 25% to 30%. Many people have been actively looking for the method which will provide the absolute lowest premiums.

One area that I have noticed which seems to offer the lowest premiums is 40% junk silver coins. For those unfamiliar with the term, “junk silver” refers to legal tender coins with silver content, which have little or no collectible value. These coins are bought and sold based on the value of the silver content. In the United States, dimes, quarters, half dollars, and dollars were minted in 90% silver before 1965. A lesser known fact is that from 1965 to 1970, half dollar coins were minted in 40% silver.

While bags of 90% junk silver coins carry premiums in excess of 50%, bags of 40% junk silver coins can be found with premiums as low as 20%. A bag of $1,000 face value 40% silver coins, which contains roughly 295 ounces of pure silver, can be bought for around $3,500. This can be confirmed on various bullion dealer websites, as well as through a survey of completed eBay auctions. Bullion dealers typically sell junk silver in $1,000 or $500 face value bags, while eBay usually has listings for much smaller lots. I’ve found that even these smaller lots sell for around the same relatively low premiums of 20% to 25%.

Why are the premiums so low? Some people consider 40% silver coins too bulky and inconvenient. If you acquire 90% junk silver, you would have the same silver content in less than half the weight and volume. But in today’s environment, aren’t the lower premiums well worth the trade off? In reality, I think this is more of an overlooked area. Perhaps as time moves on and people start to take note, premiums will rise to the same levels as other physical silver options.

Gold and Silver News & Headlines for November 19

Safe

To Prevent Bubbles, Restrain the Fed

Some very interesting opinions are being published in the Wall Street Journal lately. “Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply.”

Saudi Arabia buys $3.5bn of gold in two weeks

But at what price? “News about the Saudi gold rush is bound to fuel speculation about the alleged large physical gold transactions that have been taking place at prices will above the spot price set in the futures market.”

Worth $15,000, will you take $30?

Kids sell a 62.5 chunk of metal for gas money. It turns out they had been breaking into safes.

Silver Available Amidst Shortages

Arbitrage play on physical silver of various weights: Sell 100 oz. silver bars, use the proceeds to buy 1,000 oz. bars, and fabricate those into 1 oz. bars. I’m surprised there are not more people doing this in large scale.