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U.S. Mint sees gold demand drop 43% in April, silver demand drops 23%

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(Kitco News) - After a strong start to the year, bullion demand for gold and silver from the U.S. Mint fell sharply last month.

In its latest sales numbers, the U.S. Mint said it sold 88,000 ounces of gold in various denominations of its America Eagle Gold bullion coins. Sales are down more than 43% from March.

Meanwhile, annually, compared to lackluster demand in 2021, sales are up 128.5%.

Silver demand is also down sharply, with the U.S. mint selling 850,000 one-ounce American Eagle Silver coins. Silver coin demand dropped 23% from March. For the year, silver demand is down nearly 92%.

Silver significantly underperformed gold last month as prices dropped more than 7% last month. The gold market saw only a roughly 2% drop in April.

According to some analysts, bullion sales suffered last month as investors reacted to aggressive monetary policy tightening expectations from the Federal Reserve.

The U.S. central bank's latest monetary policy decision will be released on Wednesday. Markets see a nearly 100% chance of a 50-basis point hike. Markets also see the Federal Reserve raising rates by 75 basis points in June.


The Fed is ready to raise rates by 50 bps, but what comes next?

Analysts also noted that volatile prices and robust premiums kept some consumers on the sidelines.

The sharp month-over-month drop in gold demand came after the U.S. Mint saw its best March performance since 1999. The total demand for the first quarter of 2022 was 426,500 ounces of gold.

Although the bullion market faces some challenging headwinds as interest rates rise, analysts still see solid demand through 2022.

Juan Carlos Artigas, global head of research at the World Gold Council, said demand for gold bullion is expected to remain healthy as investors look for safe-haven assets. 

Inflation concerns are top of mind for many investors, so we expect bullion demand to remain well supported through 2022,” he said.

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.