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U.S. Mint Posts Weakest Coin Sales In A Decade As Gold Prices Rise

Kitco News

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(Kitco News) - It was a tale of two markets for gold in 2017, as prices made their biggest gains since 2010, but U.S. Mint coin sales were the weakest in a decade.

U.S. Mint Posts Weakest Coin Sales In A Decade As Gold Prices Rise

The U.S. Mint said that sales of American Eagle gold and silver coins were the lowest since 2007 and American Buffalo coins had the worst year on record.

The majority of analysts blamed the results on range-bound gold prices and excitement surrounding the U.S. equities market.

According to the latest data, a total of 302,500 ounces of the gold American Eagle coins were sold in 2017, which is one-third less than in 2016, when a total of 985,000 ounces was sold. This marked the worst year since 2007 — a year that saw only 198,500 gold ounces sold.

On top of that, sales of Buffalo gold coins were the worst ever, with only 99,500 ounces sold in comparison to 2016 results of 219,500 ounces.

Sales of silver American Eagle coins were also the worst since 2007, with only 18,065,500 ounces sold, well down from the 2016 figure of 37,701,500. In 2007, sales were only at 9,887,000 ounces.

The World Gold Council described the U.S. bar and coin market as lackluster in 2017, with demand only at 7.3 metric tons in the third quarter, down from last year’s 17.7 tons, according to its latest Gold Demand Trends report.

“After a very strong showing in 2016 – the third best year for bar and coin demand on record in the U.S. – 2017 has been rather unexciting: y-t-d demand was at its lowest level since 2007,” the WGC said.

The WGC said that the U.S. equities market was partly responsible for poor coin sales, adding that big gains in equities took attention away from the bullion.

“Dealers report that investors are disappointed by the range-bound gold price, which compares poorly to the headline-grabbing performance of the S&P 500,” the WGC said.

But, on a global scale, bar and coin demand was up 17% in the third quarter, reaching 222.3 tons. The biggest contributor to that growth was China, with demand up 57% in the country.

However, poor coin sales in 2017 did not have a major impact on the global market, as gold prices ended the year with a gain of around 13%, its best performance since 2010. 

February Comex gold was trading at $1,309.00, up 0.91% on the day, just before the market settled for the very last time in 2017.

The $1,300-an-ounce price target will remain the metal’s key psychological level in the new year, according to analysts.

“Look for continued steady gold over the 200-day moving average and as gold is underinvested. If we close over $1,300, more asset allocators [will be] joining the long side,” said George Gero, managing director at RBC Wealth Management. “Gold is still much about the dollar weakness—bonds, 10-year [yields] not moving after rate hike -- and tax season in full swing.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.