Post by unlawflcombatnt on Dec 7, 2009 15:07:26 GMT -6
According to one source, gold coin sales were suspended by the US Mint on Friday, due a shortage of physical gold. Though this would put some upward pressure on gold prices, it would put even more upward pressure on US gold coin prices.
GOLD INVENTORY DEPLETION
by Lawrence Williams
Mon , Dec 7, 2009
"U.S. Mint now suspends all 1-ounce gold coin sales due to shortage of physical gold!
Once again the U.S. mint has had to suspend sales of all its 1-ounce gold coins, and some fractional ones too, as its supplies of physical gold cannot meet the demand.
"The United States Mint has depleted its inventory of 2009 American Buffalo 1-Ounce Gold Bullion Coins. ... No additional inventory will be made available. As additional information becomes available regarding 2010-dated American Buffalo 1-Ounce Gold Bullion Coins, you will be notified." So said a memorandum issued Friday to authorized purchasers of U.S. Mint gold coins and reported by Jim Sinclair..
Mineweb reported only 2 weeks ago, on November 25th, the suspension of sales of American Gold Eagle coins by the Mint - U.S. Mint suspends American Eagle 1-ounce gold coin sales - again, which, at the time, reckoned such sales would be resumed early this month - but in the event, not only is the suspension of the Gold Eagle coin sales continuing, but also now the American Buffalo one ounce gold coin sales have also been suspended, with no new sales now planned until some time in 2010 - although the current sharp fall in the gold price may provide the Mint with a bit of respite from its supply/demand woes.
But supply problems also persist with smaller gold coins, particularly given the enormous demand for fractional sized gold coins following the suspension of the one ounce Gold Eagles. Thus the Mint was forced to issue a 2nd memo on Friday saying "the American Eagle Gold 1/10th-Ounce Coin inventory was depleted" and that "inventory for the 1/2-ounce and 1/4-ounce coins remains very limited." Following the sale of these remaining gold coins on Friday, the Mint anticipated that it would again offer all fractional sizes by mid-December, but in an allocation process.
On a more positive note for the Mint, the resumption of American Silver Eagle bullion sales will resume today. These silver coins were suspended along with the 1-ounce gold coins a week ago - also due to depletion.
The Mint had been trying to control sales by not releasing the 2009 coins for sale until late in the year - they are usually available throughout the year, but demand has proven to be enormous. This doesn't mean though that coins are not available to the U.S. public as some authorized dealers will continue to hold stocks, although these are being depleted rapidly and premiums charged on sales are increasing.
According to a report on website Coinupdate.com "The US Mint began sales of fractional weight American Gold Eagle bullion coins on December 3, 2009.... These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the 1-ounce bullion coins. After only 1 day of availability, the US Mint recorded sales of 56,000 of the 1/2 ounce coins, 58,000 of the 1/4 ounce coins, and 260,000 of the 1/10th ounce coins. They have indicated that the inventory for 1-10th ounce coins has already been depleted and the inventory for 1/2 and 1/4 ounce coins is limited. The remaining limited inventory will be offered via the US Mint's standard allocation process and additional inventory is expected to be available in mid-December."
While the shortage of U.S. Mint offerings due to demand exceeding supply is, in reality, not that significant in terms of global gold sales--it does demonstrate the extent to which demand for easily available physical gold has increased over the past 2 years. Some of this has been the ever increasing interest by the U.S. public in gold in general and also a certain amount of distrust generated by some commentators as to whether the various ‘paper gold' offerings were secure."
All precious metal prices have declined somewhat over the last few days. But gold has declined more, having fallen -3.7% in price since Friday's open. In comparison, silver fell -1.6% and platinum fell -2.7%.
If the US mint really has stopped selling gold coins, and that information is widely disseminated, then gold prices should begin rising--or at least stop falling. US gold coin prices should rise even more.
For the record, the above mentioned sales of 1/2, 1/4, and 1/10th ounce coins amounts to a total of 68,500 oz., or 2.14 tons. For reference, gold mining production is about 2,400 tons per year. So, as the above article's author stated, the 2.14 ton sale of gold to the public should make little real difference to gold prices.
But the information that the US mint's gold supply is exhausted could have tremendous effects. We'll soon find out.
Below is a live gold price chart from Kitco.com. As can be seen from the chart, there was a huge dip in gold prices on Friday, but little change today (Monday, 12/7/09.)
www.kitco.com/images/live/gold.gif
GOLD INVENTORY DEPLETION
by Lawrence Williams
Mon , Dec 7, 2009
"U.S. Mint now suspends all 1-ounce gold coin sales due to shortage of physical gold!
Once again the U.S. mint has had to suspend sales of all its 1-ounce gold coins, and some fractional ones too, as its supplies of physical gold cannot meet the demand.
"The United States Mint has depleted its inventory of 2009 American Buffalo 1-Ounce Gold Bullion Coins. ... No additional inventory will be made available. As additional information becomes available regarding 2010-dated American Buffalo 1-Ounce Gold Bullion Coins, you will be notified." So said a memorandum issued Friday to authorized purchasers of U.S. Mint gold coins and reported by Jim Sinclair..
Mineweb reported only 2 weeks ago, on November 25th, the suspension of sales of American Gold Eagle coins by the Mint - U.S. Mint suspends American Eagle 1-ounce gold coin sales - again, which, at the time, reckoned such sales would be resumed early this month - but in the event, not only is the suspension of the Gold Eagle coin sales continuing, but also now the American Buffalo one ounce gold coin sales have also been suspended, with no new sales now planned until some time in 2010 - although the current sharp fall in the gold price may provide the Mint with a bit of respite from its supply/demand woes.
But supply problems also persist with smaller gold coins, particularly given the enormous demand for fractional sized gold coins following the suspension of the one ounce Gold Eagles. Thus the Mint was forced to issue a 2nd memo on Friday saying "the American Eagle Gold 1/10th-Ounce Coin inventory was depleted" and that "inventory for the 1/2-ounce and 1/4-ounce coins remains very limited." Following the sale of these remaining gold coins on Friday, the Mint anticipated that it would again offer all fractional sizes by mid-December, but in an allocation process.
On a more positive note for the Mint, the resumption of American Silver Eagle bullion sales will resume today. These silver coins were suspended along with the 1-ounce gold coins a week ago - also due to depletion.
The Mint had been trying to control sales by not releasing the 2009 coins for sale until late in the year - they are usually available throughout the year, but demand has proven to be enormous. This doesn't mean though that coins are not available to the U.S. public as some authorized dealers will continue to hold stocks, although these are being depleted rapidly and premiums charged on sales are increasing.
According to a report on website Coinupdate.com "The US Mint began sales of fractional weight American Gold Eagle bullion coins on December 3, 2009.... These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the 1-ounce bullion coins. After only 1 day of availability, the US Mint recorded sales of 56,000 of the 1/2 ounce coins, 58,000 of the 1/4 ounce coins, and 260,000 of the 1/10th ounce coins. They have indicated that the inventory for 1-10th ounce coins has already been depleted and the inventory for 1/2 and 1/4 ounce coins is limited. The remaining limited inventory will be offered via the US Mint's standard allocation process and additional inventory is expected to be available in mid-December."
While the shortage of U.S. Mint offerings due to demand exceeding supply is, in reality, not that significant in terms of global gold sales--it does demonstrate the extent to which demand for easily available physical gold has increased over the past 2 years. Some of this has been the ever increasing interest by the U.S. public in gold in general and also a certain amount of distrust generated by some commentators as to whether the various ‘paper gold' offerings were secure."
All precious metal prices have declined somewhat over the last few days. But gold has declined more, having fallen -3.7% in price since Friday's open. In comparison, silver fell -1.6% and platinum fell -2.7%.
If the US mint really has stopped selling gold coins, and that information is widely disseminated, then gold prices should begin rising--or at least stop falling. US gold coin prices should rise even more.
For the record, the above mentioned sales of 1/2, 1/4, and 1/10th ounce coins amounts to a total of 68,500 oz., or 2.14 tons. For reference, gold mining production is about 2,400 tons per year. So, as the above article's author stated, the 2.14 ton sale of gold to the public should make little real difference to gold prices.
But the information that the US mint's gold supply is exhausted could have tremendous effects. We'll soon find out.
Below is a live gold price chart from Kitco.com. As can be seen from the chart, there was a huge dip in gold prices on Friday, but little change today (Monday, 12/7/09.)
www.kitco.com/images/live/gold.gif