Examining the "Unprecedented Demand" for Gold Eagle Coins 33 comments
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Earlier this week, the United States Mint took further actions to meet the increased demand for gold and silver bullion coins. This included production halts for certain bullion offerings and the continued allocation for one ounce Gold and Silver American Eagle coins.
Within the memorandum sent to authorized bullion purchasers, the US Mint specifically stated, "gold and silver demand is unprecedented." Throughout the course of this year, the Mint has provided similar explanations each time a new suspension or allocation program went into effect. While sales of Silver Eagle coins are higher than any other year in history, the sales of Gold Eagle coins are far below their peak.
The following table shows the ounces of gold sold by the United States Mint in the form of American Eagle Gold bullion coins. These figures are taken from the US Mint website. You can visit the link for monthly data, as well as the figures for Silver and Platinum Eagles.
American Gold Eagle Bullion Sales (ounces)
| 1986 | 1,787,750 |
| 1987 | 1,253,000 |
| 1988 | 851,000 |
| 1989 | 839,000 |
| 1990 | 715,000 |
| 1991 | 472,000 |
| 1992 | 638,600 |
| 1993 | 796,000 |
| 1994 | 559,500 |
| 1995 | 600,500 |
| 1996 | 729,500 |
| 1997 | 1,317,000 |
| 1998 | 1,839,500 |
| 1999 | 2,055,500 |
| 2000 | 164,500 |
| 2001 | 325,000 |
| 2002 | 315,000 |
| 2003 | 484,500 |
| 2004 | 536,000 |
| 2005 | 449,000 |
| 2006 | 261,000 |
| 2007 | 198,500 |
| 2008 | 492,000* |
*through October 2008
While the number of ounces of gold sold has already more than doubled from last year, it still does not approach the levels reached during the several prior years, most notably 1998 and 1999.
In terms of monthly demand, during 2008 the highest number of ounces sold was in September at 113,000 ounces. During 1998 and 1999, there were seven months with sales in excess of 200,000 ounces. The highest monthly sales total occurred in October 1998 at 288,500 ounces.
The demand for American Gold Eagles is clearly not unprecedented. What's actually unprecedented is the suspension and allocation of Gold Eagle coins. Even amidst the booming demand of the pre-Y2K years, the US Mint never resorted to suspensions or allocation programs. Why is the US Mint having so much trouble keeping pace with demand this year?
The mainstream press has recently given coverage to the US Mint's suspensions and allocations of gold and silver bullion coins. The stories have always reported about the US Mint's inability to produce enough coins to meet demand. Given that the Mint has been able to produce far greater quantities of gold bullion coins in the past, I think the real story is the Mint's inability to obtain the physical gold needed for the coins.
But that just raises another question: With unfulfilled physical demand, why has the market price of gold remained stagnant? I think we will see this situation play out with some interesting consequences during the remainder of the year.
Disclosure: Long physical gold.
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This article has 33 comments:
Absolutely correct. When the mainstream press gets on top of this story all Hell will break loose.
Maybe in 1998 and 1999 the Mint had big piles of bullion coins sitting in vaults from prior years. And maybe since then they reduced the annual production to reduce the size of the stockpile they carried based on prior year sales. The two year lull and sudden doubling+ this year may have caught them with a very small stockpile that they went through quickly.
I don't really know, it's just one possibility that would at least make some kind of sense and not rely on some vague conspiracy.
Once they run out of blank dies, there will be a lengthy wait to restock as their producers will also have other customers to supply as well.
I believe that is a more recent offering which investors are preferring over the American Eagle (which is of a lesser purity).
That could explain it.
Where does the Mint get the gold-Fort Knox? On the open market?
Who's watching the gold in Fort Knox? Do citizens get to know how much is there,does the amount stored rise and fall and if so how?
Heard crazy rumors the Gv't. is not letting us know that we have little gold left in Ft. Knox-any chance?
No,I don't wear tin foil hats-just curious.
Regarding the 24 karat gold one ounce American Buffalo Gold coins, there were 146,500 ounces of gold sold through this offering. While it does bring this year's total higher, it still falls very short of peak years.
www.fms.treas.gov/gold...
This statement has not changed at all in over 2 years. That is, every line item has exactly the same amount, each month since March 2006. How is that possible?
Prime Minister Brown sold off the UKs gold for a 5 billion LOSS to help US out of a pinch because of no gold holdings. Wise up. Buy Gold!
I learned today that the major countries are talking about suspending all equity trading for however long it takes for them to develop new 'trading rules.' It would take just such an international meeting for the current monetary system to be replaced with something else. Something absolutely stunning will cause people to try to get out of their dollars, euros, pounds, yens, etc., leaving them worthless.
It looks like 'the Select' are driving as many people out of gold (and silver) as possible, which they are buying at fire sale prices. No matter what form the new currencies take, they will sooner or later have a price in gold. Then, they can convert to the new money and buy up the stock market at salvage, fire sale prices.
Right now, I'd say that it is absolutely essential for one to have their house (& cottage) completely paid off so they own it outright. In fact, later today, I am going to call my county to see if I can even pre-pay my property taxes for the next couple of years. [During the Great Depression, most people lost their homes to tax delinquencies.] Then, I'd get everything else you can into gold or silver. Best would be the actual gold coins or bullion, but that is virtually impossible to find now, so the next best is to get the gold and silver ETF.
Any group evil enough to crash the monetary system, and steal the wealth of virtually everyone in society, is evil enough to outlaw gold for anyone except 'the Select,' but I can see no other option but to try to survive with the only store of monetary value that could be counted on for the last six thousand years.
I see a situation that is unprecedented in its seriousness - and in its evil. I can't think of any other scenario to explain why gold would go down during a financial panic, can you?
I would like to know any possible logical explaination for such a drop in this uncertain of a market.
Gold elevator up and DJIA elevator down will pass by each other at 3000...
Where do people keep their money in order to purchase coins from the mint?
Answer: In a bank
When people go nuts and purchase silver and gold coins from the mint, where does the money come from?
Answer: The Bank
Where does the money go to?
Answer: The Government. It leaves the financial system. They do not have to buy the physical gold.
What happens when the banks start losing their deposits?
Answer: They go out of business.
It is my opinion
1 – People hold most of their metals buying funds in a bank or other short term haven.
2 - The government has recognized that a silent run on the banks is happening.
3 - The government figures that they are adding to the problem by supplying gold and silver coins.
4 – I feel in the short term (2-3 years) the price of gold will fall. (I won’t give my reasons here)
Gold elevator up and DJIA elevator down will by-pass each other at 3000...
Why does banking have to be a private enterprise activity? It should be a "not for profit activity". ANY PROFITS MADE BY THE BANKING INDUSTRY SHOULD BE FOR THE GOOD OF THE PEOPLE'.
Private enterprise driven banking is structured to do harm in the long term. We are witnessing that harm now and it is UNARGUABLE. Private sector banking has caused the problems we now face.
Government spending will require take over of a profit sector such as energy firms to offset the printing presses. Socialism will arive quickly.