American Gold Eagles Are Once Again Flying High

According to the U.S. Mint American Gold Eagles (AGE) sales were note worthy in May 2018. Coming in with more than 400% increase month over month as compared to April 2018.! No, you didn’t misread that number May posted a 433% increase month over month.

Sales of American Eagle gold coins in May increased by 433 percent from April, and were the highest May sales since 2015, U.S. data showed on Thursday.

U.S. Mint sales of American Eagle gold coins totaled 24,000 ounces in May, up from 4,500 ounces in April, the data showed. May figures were the highest since 2015, when 21,500 ounces of American Eagle gold coins were sold by the U.S. Mint. Source

While this is impressive and is cause for big smiles all around, what does it mean in comparison to year over year. It appears May 2018 came in at approximately 54% higher than May 2017. The sad part is we didn’t see a move in the charts that reflected this type of additional movement. No the retail market doesn’t have an immediate impact on chart movement to the upside but if you remove those sales, watch out, because the charts will certainly reflect the lack of retail sales and begin moving lower.

May 2017 U.S. Mint American Gold Eagle sales

However, spot gold prices were headed for a May close about 1.3 percent lower than April. “Even though the (U.S.) Mint sold more gold coins this month, the low demand is keeping the premiums low, between 1 and 1-1/2 percent,” Pehowich said, muting further gains.

U.S. Mint May American Eagle gold coin sales were up 54.8 percent from the same month last year, when the U.S. Mint sold 15,500 ounces of gold coins. Source

Dillon Pehowich, Executive VP of Investment Dillion Gage Metals, seems to think that a 54+% increase in year over year sales is not enough to move the markets.

Well, Mr. Pehowich, what about the increase in gold acquisitions coming from Russia’s Central Bank? What about a robust India wedding season that just ended? What about May being one of the top 3 delivery months in the past 12+ months on the Shanghai Gold Exchange? Do these not help move the market? What does it take to get the gold market to move to the upside? Federal Reserve Trading Desk shenanigans? Is that the only thing that moves markets?

If we look at silver we see the exact opposite picture. American Silver Eagles (ASE) have been dropping like a stone for some time as we have pointed towards the cryptocurrency market and failing economy as the two primary reasons impacting silver eagle sales. We see this trend continuing into 2019. By mid 2019 we believe the silver stackers that came to the market late in 2010-2011, bought high/sold low and then left the market, will come rushing back when silver begins moving in earnest and the chatter around the internet begins to pickup. This is why we stack today – to stay ahead of the herd.

May sales of U.S. Mint American Eagle silver coins fell 58.5 percent from April to 380,000 ounces, the lowest May since 2005, the data showed.

Spot silver prices rose 0.26 percent in May, the first monthly increase since January.

“One of the reasons why silver prices aren’t going anywhere, is because there’s an abundance of silver in the market right now,” Pehowich said.

The silver coin sales were down about 85 percent from the year prior, when the U.S. Mint sold nearly 2.5 million ounces of American Eagle silver coins. Source

“An abundance of silver in the market right now”. Where? Silver mining, along with gold mining, is collapsing, silver industrial demand grows almost daily and India continues to hoover up as much of the shiny as possible.

So far this is a great report if you’re contrarian stacker. Gold sales are higher, but the exchange rate for gold is down. Silver sales are crushed back to 2005 but the exchange rate is flat for the first 5 months of 2018. What a great day to add to the stack!