2016 vs. 2015: How is gold Eagle bullion performing?
- Published: Aug 22, 2016, 4 AM
The U.S. Mint's 2016 sales of American Buffalo 1-ounce gold and American Eagle 1-ounce silver bullion coins are trailing 2015's pace while cumulative sales of American Eagle 1-ounce gold bullion coins are higher than a year ago.
Through Aug. 16, the U.S. Mint has recorded sales of 462,500 American Eagle 1-ounce gold $50 coins, struck in .9167 fine gold. For 2015, sales through the end of August totaled 421,500 of the American Eagle 1-ounce gold bullion coins.
Sales of the 2016 American Buffalo .9999 fine gold 1-ounce $50 coins totaled 126,000 through Aug. 16. In 2015, through Aug. 31, the Mint recorded sales of 148,500 coins.
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Silver American Eagle sales have also slipped. Slowing sales earlier prompted the Mint to lift weekly allocations for authorized purchasers July 18 after restrictions for more than seven months. During several months in early 2016, weekly allocations of 1 million coins were gobbled up by hungry buyers, but that appetite has waned, dropping to a fraction of that number in recent weeks.
Through Aug. 16, 2016, the Mint recorded sales of 28,000,500 of the American Eagle .999 fine silver bullion coins, compared with 32.25 million in 2015 through Aug. 31, 2015, was a record sales year, with 47 million silver coins recorded sold by year’s end.
The U.S. Mint also offers the American Eagle gold coins in half-ounce, quarter-ounce and tenth-ounce bullion options.
The U.S. Mint has recorded cumulative 2016 sales through Aug. 16 of 24,500 ounces of the half-ounce $25 face value coins (49,000 coins), 24,000 ounces in quarter-ounce $10 coins (96,000 coins), and 58,500 ounces in tenth-ounce $5 coins (585,000 coins).
Who are authorized purchasers?
As you can read about in this post from our Precious Metals Basics series, the bullion coin market operates in a tier system structured something like a pyramid, with the issuing authority at the top. The issuing government produces and then distributes the coins in large quantity through a narrow system of large distributors. Distributors in turn sell to wholesalers, who sell to a network of retailers, who then sell to the public.
The most important function of the distribution system is in providing a buy-back market. Bullion coins are investments; investments must have a degree of liquidity.
Governments sell coins into the pipeline but will not buy them back. Selling the bullion coins through a network of private dealers enables a ready two-way market.
The authorized purchasers buy the coins from the U.S. Mint based on the closing London PM spot price of the metal per troy ounce on a given day plus a $2 premium per coin. The coins are then distributed for a small premium to other dealers, collectors and investors.
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