Gold and Silver Eagle coins produced by the U.S. Mint are the most popular precious metals coins in the world. While some people find them boring, as the design hasn’t changed since 1986, others are simply interested in having a government minted coin in their vault for wealth protection. Others, like myself, like to them for a variety of reasons, not the least are the two reasons just mentioned.
American Gold Eagles (AGE) sales were a great way to have an idea about the gold market, as were the American Silver Eagles (ASE) sales served the same purpose. Some would argue this is nonsense, but if once you understand the volume of ASE’s in the market place is the single largest horde of physical silver in the world, that may have a role in what’s happening with the silver market.
Not since 2002 have American Gold Eagles sat on the shelf for such a long period. This, in the face of gold rising against all currencies around the world and in spite of less than favorable economic data from most of the developed world.
Although demand for physical gold and silver bullion pushed slightly higher this month, one analyst said it is investment demand that is driving the market, not physical.
The latest data provided by the U.S. Mint shows that a total of 5,500 ounces of gold, in various denominations of American Eagle gold bullion coins, were sold last month. This is the worst July performance in 12 years.
In total, July sales were up 10% compared to dismal June sales. For the entire year, gold bullion sales totaled 114,500 ounces, down 26% compared to the 155,500 ounces sold during the first seven months of 2019.
Bart Melek, head of commodity strategy at TD Securities, said that physical sales numbers are not typically market drivers and weaker physical demand should not be too much of a concern. Source
The good news is, this should make for a spectacular year to put away a couple of AGE’s in your denomination, especially if your favorite denomination is the quarter ounce AGE. This could be the smallest number of coins ever minted in the quarter ounce size. I will be picking up a couple just be safe.
Currently, the quarter ounce AGE has sold a mere 7,000 coins. Even if it doubles from here, which we seriously doubt that will happen, that would put this years mintage 4,000 more than the 10,000 sold in 1987, the second year of the American Eagle program.
I did a quick check on eBay for 1987 1/4 ounce gold eagles and looked at just the sold items. Several had come to market over the past few months and they all sold for approximately $415 each. In 1987 the average for gold was $446.48. This would mean about 3.5x premium since this coin first came to market. What will it be in another 10 years, 20 years, 100 years?
A few examples of other quarter ounce AGE mintages – 1991 36,100 coins sold. In 1988 there were a total of 49,000 quarter ounce AGE’s sold. in 2005 a total of 72,015 were sold. In 2009, the year the Second Great Depression began, 110,000 quarter ounce AGE’s were sold to the Authorized Purchasers (AP’s) and the last year of massive gold sales, 2015, there were a total of 158,000 quarter ounce AGE’s sold to the AP’s – 2016 / 152,000 – in 2017 / 64,000 – in 2018 / 62,000.
If you like the prospect of higher premiums based on the scarcity of a coin, well, the 2019 quarter ounce AGE [not financial advice] would be worth a look. As stated, I will be picking up at least 2, if not more, as I like gambling and this seems like a pretty good bet to take.
ASE’s are continuing to pick up the pace and move into the market. The lofty heights ASE’s reached just a few short years ago may be gone for the moment but don’t be surprised to see a rush to market once the curtain is pulled back on this economic folly we are currently living under. People are not paying any attention to the either of the metals but once President Trump sends Fed Chairman, Jerome Powell, packing and puts in a “gold guy” things are going to get interesting.
Physical silver demand was up last months with the U.S. Mint selling 1,240,000 ounces, up almost 17% from the previous month. The rise in demand coincides with silver’s July rally, in which the precious metal hit highs of $16.685/oz.
So far this year, the mint has sold 11.3 million ounces of silver, up approximately 31% from the 7.7 million ounces sold during the same timeframe last year. Source
