Precious Metals

Why Royal Mint's bullion sales were up big in January

The Royal Mint's 2017 Year of the Rooster lunar bullion coin is one of its several precious metals investment options.

Image courtesy of Royal Mint

Britain’s Royal Mint was striking 50 percent more gold bullion coins and bars as of Feb. 1, 2017, than it was one year earlier, following January 2017 bullion sales that were up 30 percent, according to a Feb. 1 Reuters report

The increase in production and sales for the Royal Mint should probably be no surprise, considering the 2016 political turmoil in the nation, which peaked in July when voters supported a referendum to leave the European Union.

The so-called Brexit vote, in fact, caused a worldwide spike in gold and silver prices.

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The unexpected election of U.S. President Donald Trump was followed by rising gold and silver prices, as well, as the world waits to see what economic effects his policies will have.

Gold bullion barsThe price of gold usually falls when the stock market is strong, but not in 2017: A popular meme since the political rise of Trump is that “the old rules don’t apply anymore.” That apparently is true of precious metals investing, too.

And while nobody is supposed to enjoy “turmoil,” there’s no denying that it benefits, at least in the short term, the companies selling gold and silver bullion.

The Royal Mint has been pushing its bullion business for years

The political turmoil causing investors to look toward precious metals occurs at the same time as the Royal Mint promotes its bullion business, seeking a larger share of the market.

In 2014, the mint introduced its own online precious metal trading website, which enables customers to buy, store and sell bullion coins at constantly updated live prices directly from the Royal Mint 24 hours a day, 365 days a year.

The Royal Mint began issuing a series of lunar bullion coins in 2014 with the Year of the Horse bullion coins, followed by Sheep and Monkey bullion coins in 2015 and 2016, respectively, and Year of the Rooster bullion coins for 2017.

Last year, the Royal Mint introduced a new bullion coin program, The Queen’s Beasts, a 10-design series that began in March 2016 with an issue honoring the lion of England, followed by a griffin coin in November 2016.

The new coins join the ranks of the gold sovereign and Britannia gold and silver pieces in the Royal Mint’s bullion coin repertoire. Also available are the Royal Mint Refinery range of gold and silver bars, a program that began in 2015.

2017 gold sovereign bullion coinsBritain’s Royal Mint launches anniversary sovereigns for 2017: The bullion version of the 2017 sovereign features a reverse design bearing a 200-year celebratory privy mark.

To boot, the Royal Mint announced in December 2016 that it is partnering with CME Group to “build and launch a digitized gold offering called Royal Mint Gold” utilizing blockchain technology, and that it is working with the World Platinum Investment Council to issue platinum bullion products in 2017.

The Reuters report reads, “While in global terms the Mint is still small — its total gold sales of 237,000 ounces last year were dwarfed by the U.S. Mint’s 1.2 million ounces of gold Eagle and Buffalo coin sales, the Austrian Mint's 534,000 ounces of gold Philharmonic coin sales, and the Perth Mint's 520,000 ounces of gold sales — its bullion unit expanded both revenue and profit by two-thirds last year.

“It is forecasting similar growth this year, through expansion in its already core U.S. and German markets, and elsewhere.”

Why people invest in gold and silver

Investing in gold and silver has historically been viewed as a hedge against the unpredictability of the overall economy, and in turn, a safe haven when other markets experience a downturn, like the one that followed the Brexit vote. 

Gold is valuable. That is based on the fact that we know there’s not a lot of it, and we know it is appealing to people. So while the health of someone’s investments in the stock market is subject to the performance of the companies invested in, gold is a known commodity with a value that, while it does fluctuate over time as we’ll explain later, generally does not fluctuate with the suddenness that a company’s stock can.

While still a hard asset that can serve as a hedge, silver is much less valuable than gold (as of 9:32 a.m. Feb. 22, one ounce of silver was valued at $17.96, while one ounce of gold was valued at $1,237.20) and its price is more prone to relatively large swings in the percentage of its value, up and down.

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