We come here to discuss what has happened, what may happen and how it may happen, otherwise, I’m not offering investment advice.
Eagles are flying again; US Mint silver eagles that is. Gold eagles are not faring as well while gold is enjoying the best performance in six years sales at the US Mint are not doing so well.
As you can see from the chart below, courtesy of USA Gold, silver eagles are enjoying a massive year on year jump in sales to the Authorized Purchasers (AP). The AP’s are the wholesalers that are authorized by the US Mint to purchase directly from the mint. The US Mint products are then sold to distributors and retailers where you and I finally get our hot little hands on them. Some of the AP’s sell directly to the public but that’s not how I usually get my bullion.
With gold moving higher this creates a double-edged sword for American Gold Eagles (AGE’s). When a single ounce of gold has climbed to more than $1,400 this is not a realistic figure for most people to easily pull together and allow to sit on the shelf or in a vault. Even when you look at picking up a half-ounce, quarter-ounce or tenth-ounce the cost can be prohibitive especially when compared to silver. This has some to do with the massive increase in the sales American Silver Eagles (ASE’s).
If we look back one month – June 3, 2019 – we see something very interesting that happened. Gold has dropped substantially from the May sales. Through May 2019 AGE’s sales at the US Mint were UP by more than 8%. Now we see a massive downward push of just shy of 19% month over month!! I understand the year on year picture is where the truth actually lies, however, reviewing the month over month info is how the yearly info is built. A 18+% swing should be taken into consideration. Did the AP’s simply overstock their shelves in April and May and needed to step back in June or is there more to it? The picture won’t really unfold for the next 2-3 months when we a little more data but we need to keep an eye on what just happened.
Silver on the other hand is flying off the shelf and continue to pick up speed. While gold fell month over month silver jumped by approximately 6.5%. Silver is more approachable and the cost is much easier on a persons budget. It’s easier for me to get my wife to be favorable for me acquire 3-4 ounces silver along with an ATB as opposed to plunking down $1,450 for a single coin! That’s a much different conversation.
The metals are moving higher and it’s no secret at this point that we believe both metals are going to continue moving higher. If you’re looking for these metals, or any item, to advance or retreat in a straight line you need to look back at history. You should be doing that anyway and never, ever follow what I’m doing. I’m making bets based on me and my family and you should do the same.
Eagles are flying silver, for now, is flying higher than gold. Of course, this could change in a moments notice. It may have already changed and we simply haven’t reported it just yet. We are loading up right now as the ponies have left the gate and are now getting into the race. How it will end is beyond my comprehension, I just feel confident both metals will finish higher and never come back to this neighborhood ever again.
