The U.S. Mint Again Suspends Gold Coin Sales: Is It Really Out of Gold?

I may have missed one or the other suspension of gold coin sales by the US Mint. But here we go again: Checking the online store of the US Mint I came across notices of delays and suspensions with golden Eagles and Buffalos, with waiting times ranging from 'weeks' and to 'await further notice'.

The US Mint press room has entirely omitted this confirmation about the tightness of the bullion market which enjoys upward momentum thanks to the thousands of big problems the world faces.

Checking on 24kt Buffalo gold coins, the Mint saddened me with this statement:

Production of United States Mint 2009 American Buffalo Gold Proof Coins has been delayed because of the limited availability of 24-karat gold blanks. The 2009 American Buffalo One-ounce Gold Proof Coin is scheduled to go on sale in the second half of the 2009 calendar year after an acceptable inventory of 24-karat gold blanks can be acquired. The release date, once established, will be posted to the 2009 Scheduled Products Listing.

As a result of the numismatic product portfolio analysis conducted last fall, beginning in 2009, American Buffalo Gold Proof fractional coins and the four-coin set are no longer available. Additionally, the United States Mint will no longer offer American Buffalo Gold Uncirculated Coins.

The most economical way to buy gold coins, US gold eagles, is blocked as well:

Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . ”

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.

Not being able to suppress a smile, I am left with a few questions:

• If gold is soooo cheap, why can't the US Mint risk buying those ounces on the free market?
• Wasn't it the IMF who said it's gonna go and sell some of its yellow bars? Hey, this could become innovative: See the first ever gold deal done by dark pools in order to keep the public in the dark for some time longer.
• If nobody wants gold and sees it as relic of history (like the history of price stability), what keeps the Mint from entering what it sees as a buyer's market?
• Is this maybe blatant price manipulation because we don't know about the size of the Mint's backlog and order book?

Check ebay prices here to see what gold savers are willing to pay. I cannot see any lessening demand for physical gold. Is the Mint maybe waiting for Goldman Sachs' (GS) summer attack on gold bullion prices, using as much short futures contracts as can be stored in its computers?

They may run into a problem with this strategy, though. Investors worldwide have long begun to snap up every gold bar they can get their hands on. As always, ahead of hyper-inflation people will scratch everything together to get every ounce of security they can.

Comments

[Roger Knights:]

I wonder what the Chinese make of this. Not confidence-inspiring in the backing of the dollar.

Jul 13 03:30 PM

[Uncle Pie:]

you can get all the Maple Leafs (24 kt) and Krugerrands (22 kt) you want at prices in relation to the price of gold that are competitive with US Mint prices for Eagles or Buffalos but do shop around.

Jul 13 04:02 PM

[psig:]

My understanding was that the gold buffaloes had to minted out of gold mined in the U.S. so there must be a problem getting enough U.S. mined gold for both bullion and collector buffaloes. Gold eagles can be purchased as bullion but they are not collector Proof coins. Also the standard gold eagle bullion coin does not have the "W" mint mark that is placed on the uncirculated gold eagle sold on the U.S. mint site and coveted by collectors. The lack of of "W" gold eagles from the mint isn't explainable unless they also have to stamped from U.S. mined gold. As a side issue the "W" on the mint coins means they were produced a the West Point mint it does not stand for George "W" Bush.
Also from the stuff I have been reading here and elsewhere it doesn't sound like price of bullion will increase much (collector gold coins from the mint probably will continue to go up as evidenced by Ebay). Bullion will bounce up and down 75 bucks so the manipulators can make money on short positions. Contracts are being manuevered on paper so there will always be plenty of paper gold until enough people take physical possession of at least over 50% of the "so called gold" being stored in various large banks and other locations. That is unlikely to ever happen. Those who audit the gold supply are from the same government that audited Bernie "made off with your money" Madoff.

Jul 13 04:17 PM

[SW Richmond:]

These mint announcements of supply problems seem to coincide with backwardation.

Jul 13 04:48 PM

[kohalakid:]

what backwardation???????

COMEX settles:

July 922.20 Aug 922.50 Oct 924.00 Dec 925.40

no backwardation here, boss.....


On Jul 13 04:48 PM SW Richmond wrote:

> These mint announcements of supply problems seem to coincide with
> backwardation.

Jul 13 05:40 PM

[kohalakid:]

The Mint hedges all its sales via spot purchases using the Second London fix as the basis of its purchases and sales. They don't speculate on the price of bullion, as the writer theorizes.

The blanks are produced by third parties, using US mined gold, and the blank producers can't keep up. Same thing with silver eagles.

But the US Mint doesn't run itself like a business. You would think more demand would generate more supply by the Mint, but since the initiation of the Eagle program in 1986 they have had a "who cares" attitude as far as keeping the wheels greased. The program has been a success in spite of itself.

Jul 13 05:46 PM

[DONE_SONZ:]

I wonder how long people will take the word of the government on how much gold we actually have?Sooner or later,maybe sooner, it may just be assumed we don't have any gold if there are no true audits done on a regular basis.A audit that can be visually trusted.Paper gold doesn't count! How is it not that way already?Does it not blow enough people's minds yet?If you'r accused enough times of cheating in any game you won't get to play anymore unless you prove otherwise.

Jul 13 05:58 PM

[DONE_SONZ:]

Gold going to permanent backwardation means that gold is no longer for sale at any price, whether it is quoted in dollars, yens, euros, or Swiss francs.Play by the rules.

Jul 13 06:15 PM

[kohalakid:]

What makes you think gold is going into "permanent backwardation"??? One year COMEX gold is prices almost exactly at 1 year interest rate plus storage. It's right where it should be.


On Jul 13 06:15 PM DONE_SONZ wrote:

> Gold going to permanent backwardation means that gold is no longer
> for sale at any price, whether it is quoted in dollars, yens, euros,
> or Swiss francs.Play by the rules.
>
>

Jul 13 06:35 PM

[DONE_SONZ:]

For the reasons I stated in my first post.

Jul 13 06:41 PM

[kohalakid:]

But wouldn't the big insiders who saw the realities of a big physical shortage be shrinking the 1 year spread and we'd have actual backwardation rather than a market that's spot on where it should be?


On Jul 13 06:41 PM DONE_SONZ wrote:

> For the reasons I stated in my first post.

Jul 13 06:46 PM

[DONE_SONZ:]

big insiders says it all.

Jul 13 06:54 PM

[kohalakid:]

Oh, yeah, the big insiders who have been short gold for a decade and all the conspiracy guys say they do it so they can manipulate the market and make a ton of money. Let's see, short from $275 and it's now $920..yeah, sounds like they have a great conspiracy going.


On Jul 13 06:54 PM DONE_SONZ wrote:

> big insiders says it all.

Jul 13 07:06 PM

[DONE_SONZ:]

Not without a nice little premium.

On Jul 13 06:15 PM DONE_SONZ wrote:

> Gold going to permanent backwardation means that gold is no longer
> for sale at any price, whether it is quoted in dollars, yens, euros,
> or Swiss francs.Play by the rules.
>
>

Jul 13 07:15 PM

[derryb:]

US Mint is required by law to first meet demand for bullion silver and gold eagles before meeting collector demand (proofs and other products bought directly from the mint. Soaring demand for bullion eagles (only available through mint authorized dealers) has forced the mint to devote all of its silver and gold resources to the coins required by law. No shortage, just diversion of resources.

Jul 13 08:30 PM

[Bron Suchecki:]

Only shortage that matters is when US Mint can't meet demand for bullion eagles. When that happens, it is a lead indicator that other bullion coins will start to run out or be rationed.

Reason is because US Mint does not make its blanks, it has to source them from suppliers. If demand is high, those suppliers will not want to supply US Mint with cheaper blanks as they can mint those blanks themselves into higher priced bullion coins. If demand continues, those suppliers will themselves run out of production capacity and start to ration.

Jul 14 06:20 AM

[Robert262:]

I don't want to sound like one of those cheezy gold commercials on the tube, but let's simply look at the facts. The Fed has printed so much "monopoly money", without manipulation or an outright act to make ownership illegal, which would you rather put your faith into?
China is no longer buying our long term debt (short term only), and they are stock piling gold like a starving person at an "all you can eat" buffet. We are printing money to fund our own debt.
Anybody remember history? Looks like Weimar Republic revisited.

Jul 14 09:12 AM

[PMMaven:]

Seems to me the only poster who knows what he is talking about is kahalakid. Also someone the other day thought 250M TO Silver was a lot. You gotta be kinding.

Jul 14 09:27 AM

[paxjds:]

Either Fort Knox is out of Gold and therefore the government can not provide Blanks from their bars in Fort Knox, or..........

They want to hold the Gold for the government as the expect gold to go through the roof in the near future.

Jul 14 02:18 PM