US Mint Sells Record 63,500 Ounces of PHYSICAL GOLD In One Day

One of the more curious revelations of the New Normal is the fundamental dichotomy when investing between paper “investors”, or those who chase returns based on intangible, fiat-based and central bank-backed promises, such as capital appreciation or cash flow streams, and those who would rather convert their paper money into hard assets, even if said assets can not be, in the immortal words of Warren Buffett, fondled, or otherwise generate a cash-based return. Such as gold.

Today provides perhaps the perfect example of how the former increasingly trade on nothing but momentum and speculative mania (such as the previously reported record inflow of foreign capital into the Japanese stock market well after the bulk of the easy upside has already been made and at this point there is mostly downside) and where buying begets only more buying, while rampant selling only leads to liquidations, while those who invest in hard assets (and thus have little to no leverage) have become the true value investors, purchasing more as the price of the underlying asset drops. Yes, a novel concept to most High Frequency Trading vacuum tubes, and the momentum-chasing, equity trading “expert” du jour, but nothing new to Indians, Australians, Chinese or the Japanese.

And apparently to at least some Americans.

According to today’s data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.

Punchline number one, as the chart below shows, is that the more the price of gold fell, the more aggressive the purchases of physical gold through the Mint became, rising to 96,500 oz in the last two days alone. Buying more of something you want when the price drops: what a stunning concept – explain that to the algos who nearly crashed the German stock market overnight.

Punchline number two, of course, is that the US mint charges a hefty premium for purchases: much more so than traditional vendors like Apmex or Gainesville Coins, and is usually the last resort for when nobody else has any physical at a lower premium to spot (or any metal in inventory).

So how long until the US mint “runs out” of American Eagles and Buffaloes in inventory, along with the depletion of all other precious metal vendors? And what happens if the price of paper gold hits zero (or goes negative) courtesy of bank and financial institution liquidation selling of paper derivative contracts nebulously referencing some yellow metal somewhere, even as suddenly there is no physical to be delivered to anyone, anywhere?

Inquiring minds really want to know.


Chinese Gold Demand Pops; American Eagles Soar

Gold’s biggest gain in a week was attributed to Chinese demand and demand for U.S. coins. Gold imports by China from Hong Kong almost doubled from October to November, and on Monday, the Shanghai Gold Exchange set a physical gold contract record.

Sales of gold and silver American Eagle bullion coins also surged to begin 2013.  Coin Update reports that Monday’s opening day sales tally of 3,937,000 American Silver Eagles “seems to represent the highest one-day sales total in the history of the program,” while last week’s launch of the 2013 American Gold Eagle saw a 33% sales increase over 2012.

News & Views

MarketWatch/Zero Hedge:  Gold & silver up 1% & 1.3% respectively; Gold & silver win as stocks and VIX drop for second day

Barron’s/Wall St. Cheat Sheet:  Gold, silver gain:  U.S. default seen as soon as mid-February; Is the U.S. debt ceiling really a debt target?

BullionVault:  Dealers report very strong gold demand from China & India; Western savers hedging anxiety with gold

Dan Norcini/Casey Research:  Gold bounces from support; Dear 2013, What will gold do this year?

Bloomberg:  Gold lures Japan’s pension funds as Abe targets inflation

Metal Miner/SilverSeek:  Japanese silver price gains 4% on week; Silver and bank stock lovebirds

Peak Prosperity:  The trends to watch in 2013

Alasdair Macleod/Seeking Alpha:  The economics of gold and silver in 2013; The treasury bull market is over; Inflation will take center stage

SafeHaven/GoldSeek:  Merk 2013 dollar and currency outlook; Bullion vs. the dollar: Three scenarios

Bull Market Thinking: Bill Gross: Fed claims to own billions in Fort Knox gold; “With nothing in the vault to back it up—amazing!”

KWN:  We’ll see breathtaking moves in stocks, gold & silver in 2013; Nigel Farage – This is my greatest worry as we head into 2013

Coin Update:  Ron Paul’s “Free Competition in Currency Act” lives on

Zero Hedge:  Stephen Colbert takes on the trillion dollar coin; Piers Morgan vs. Alex Jones – The “gun fight” at the CNN corral

This entry was posted on Wednesday, January 9th, 2013 at 12:41 am and is filed under China, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


US Mint Bullion-Coin Sales 3

Gold and silver come in multiple forms, each with their own unique yet interrelated supply-and-demand profiles. Among the most popular in the US physical market are the bullion coins produced by the US Mint. Investor demand for these beautiful coins has been robust in recent months despite all the unrelated fund selling weighing on gold. US Mint bullion-coin sales offer great insights into physical demand.

The US Mint’s bullion coins are called American Eagles. The “bullion” distinction means their value is based solely on the spot prices of gold and silver, with no special premium for rarity. So they offer investors far more physical metal per dollar spent than expensive collectible coins. I’ve always believed maximizing one’s total gold and silver holdings is far more prudent than playing the scarcity game. Continue reading