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(Kitco News) Although the price of gold was stuck in the same range as last month, US Mint reported impressive sales of gold and silver coins in January.
A total of 220,500 ounces of American Eagle gold coins were sold in January 2021. This is 267% higher than the amount sold in January 2020, which equates to just 60,000 ounces. January sales also marked the strongest month since April 2013.
In silver, there were a total of 4,775,000 ounces of American Eagle silver coins sold in January this year, compared to 3,846,000 ounces sold in January 2020. This is a 24.15% increase, which marked the best January silver coins since 2017.
The US Mint has been rationing sales of its silver coins due to “continued exceptional market demand” and limited supply, Bloomberg said quoting the US Mint on Tuesday.
The jump in sales in January coincided with an overwhelming demand from retail investors, who were looking to invest in physical metal. Many precious metal dealers reported delays in ordering silver products over the past weekend amid record demand.
The U.S. Mint said on Tuesday that it had trouble meeting demand due to plant capacity problems and increased interest in precious metals in 2020 and until January 2021.
Total sales of gold coins in the U.S. increased by 258% last year, while sales of silver coins increased by 28%, the U.S. Mint said in a statement. Rising demand is also spreading in 2021, added the Mint.
For 2021, the US Mint said it has a limited window to produce gold and silver coins because the redesigned coins are scheduled to launch in the summer. The Mint also said it would limit the distribution of its gold, silver and platinum coins to specific retailers because of increased demand and logistical problems related to the coronavirus, Reuters reported citing the Mint’s statement.
“Retail demand has had an impressive start to the year,” said Suki Cooper, a precious metals analyst at Standard Chartered. “Gold coin sales tend to be stronger during Democratic, rather than Republican, governments.”
The situation for physical silver will be more complicated this year due to the attempt to compress the silver that the market saw earlier this week.
Peter Hug, director of global trade at Kitco Metals, said the attempt to compress silver has now “backfired” as gold stocks have dried up as a result, with premiums rising and few physical products left to sell.
“Basically, this intention to try to squeeze the [silver] the market was … absolutely silly, now it backfired and now there is no retail product on the market, and the premiums are exactly at the levels of March last year, ”he told Kitco News this week.
Prizes in physical silver products will not return to normal until the supply chain stabilizes, Hug added.
“At the moment, the supply chain is probably four to eight weeks away, so as you define your premiums without knowing what kind of volatility we’re looking at in the future, so what resellers do is just increase premiums. They cover their positions in 1,000-ounce bars because they are readily available, and then, when the product arrives, they exchange their 1,000-ounce bars for product because they will still get that product at distribution prices, and in the meantime, they have covered their positions ” , he said.
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