Mineweb.com has just posted an article about the U.S. Mint’s American Eagle bullion coin program that will, if widely circulated, create confusion in the gold and silver bullion coin market. The article says because of “unprecedented demand . . . The U.S. Mint has again ‘temporarily’ suspended sales of almost all of its gold uncirculated and proof coins, along with nearly all of silver uncirculated coins because of the limited availability of blanks.” Mineweb.com is not exactly mixing apples with oranges, but it certainly is mixing Granny apples with Golden Delicious apples.
What the Mint suspended was the direct sale to the public of “collector” versions of Gold Eagles and Silver Eagles. The Mint’s web site says, “Although they are similar in appearance to American Eagle Bullion Coins, these new uncirculated coins are distinguished by the presence of a mint mark, indicating their production facility, and by the use of burnished coin blanks, which are hand-fed into specially-adapted coining presses one at a time.” Standard uncirculated Gold Eagles and Silver Eagles do not carry mint marks and are mass produced.
Now, let’s make this clear: The Mint continues its bulk sales of uncirculated 1-oz American Eagle gold coins and uncirculated Silver Eagles, its standard bullion coins, which are sold through the classic manufacturer, wholesaler and retailer distribution system established in 1986 when the Mint introduced its American Eagle bullion coin program. CMI Gold & Silver Inc. is a major retailer of Gold Eagles and Silver Eagles. If you want to buy at these seasonally-low summer prices, call us.
The article cites “unprecedented demand, a shortage of blanks, and restrictive policies and regulations” for the Mint’s problems. “Unprecedented demand?” Yes, the Financial Crisis of 2008 created huge demand for Gold Eagles and Silver Eagles.
Thus far this year, Silver Eagle sales total 14,899,500 compared to last year’s total sales of 19,583,500, the biggest year in the history of the Silver Eagle program. As for 1-oz Gold Eagles, this year the Mint has sold 700,000 1-oz Gold Eagles, versus 794,000 in 2008. The Mint has not sold any fractional-ounce Gold Eagles this year, having dedicated all its presses to the production of 1-oz American Eagle bullion coins and collector coins, some of which have now been discontinued temporarily.
As for the shortage of blanks, that has been case. Suppliers of blanks had geared their capacity based on prior years’ sales and anticipated sales, as would other businesses. No one had the foresight to predict the ’08 Financial Crisis that created huge demand for all forms of gold and silver. I have no idea as to whether the suppliers are planning increased production capacity.
“Restrictive policies and regulations?” You bet. We’re talking the government here. Why would anyone expect anything else?
The mineweb.com article slaps around the Mint for not allowing other refiners to supply blanks, but such changes do not come quickly in a government agency. Besides, the law authorizing the sale of Gold Eagles says the gold must be newly mined in the United States, and only a handful of refineries meets the standards and regulations to produce the blanks for the coins. But, suppliers of blanks for Silver Eagles are not similarly restricted.
Finally, the article states that “Meanwhile the mint will no longer offer American Buffalo Gold Uncirculated Coins.” Although it is accurate that the Mint has not sold any uncirculated Buffalo gold coins this year, the Mint’s web site notes that “. . . annual production of American Buffalo Gold Bullion Coins is required by law. As a result, the United States Mint is presently developing a production and launch schedule to determine the earliest possible release of these coins through the Authorized Purchaser network.” The “Authorized Purchaser network” is the Mint’s distribution program through which it sells Gold Eagles and Silver Eagles. So, sometime later this year, we can expect uncirculated American Buffalo gold coins to be available.
Although American Buffalo gold coins are not available, 1-oz American Eagle gold coins are, and the lowest premiums ever for new coins. Silver Eagles also are available at low premiums. Seasonally, the late summer is the best time to invest in gold. If you are thinking about investing in gold, consider doing so now.