Precious Metals

Powerful gold demand creates shortages at mints worldwide

Volatility in the price of gold is stressing the production capacity of many of the world's mints to produce bullion coins, including the U.S. Mint's American Eagle coins.

Images courtesy of APMEX.

The following text is excerpted from the fourth week of August edition of The Mike Fuljenz Metals Market Report. Fuljenz is founder and president of Universal Coin and Bullion in Beaumont, Texas:

"Phone calls from new and established customers are asking dealers how long (and for how much of a premium) they must wait for delivery of some gold and silver coins. The U.S. Mint and/or the Royal Canadian Mint have slowed down delivery, occasionally stopping delivery altogether, or they have had to put major dealers on an allocation basis as they search for more raw silver and gold blanks to manufacture new coins.

"Many dealer’s phones are ringing off the hook. The surge in demand for hard-to-get bullion coins is now creating a shortage of low-premium numismatic coins, like $20 gold Double Eagles or common-date Morgan and Peace silver dollars. Even 'junk' silver coins are now getting harder to get.

"Dealers who haven’t stockpiled coins in advance are in a bind. If they merely 'buy to order,' their customers may experience long waits and then take what’s 'left over' after the more established buyers have stockpiled the best products. First-time customers need to know that this unusually high demand for many physical bullion products (including coins and bars) this summer has created in some cases higher premiums over precious metals prices and often delayed deliveries for many products.

"Delayed delivery in normal times is a warning sign that a vendor may not be reputable. Be sure and check out any vendor you transact with for their reputation in the industry. Customers who demand bullion at any price may want to discuss with their broker which products may provide better value."

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