American Gold Eagle demand at 11-year lows

New York (Jan 8)  The US Mint has reported that demand for its gold and silver American Eagle coins was an 11-year low; the weakest point since just prior to the financial crisis. Annual sales figures (taken on December 20th) were 244,500 ounces of gold American Eagle coins sold by the US Mint, and 15.56 million ounces of silver American Eagle coins.

2018 was a rollercoaster ride for the US Mint. As we reported in March, the Mint reported poor sales figures compared to previous months and compared to March 2018, with the limited demand for silver blamed by the Mint. This slump was felt from January to May, despite March’s notable drop, but it wasn’t all bad.

Fast-forward to September and the US Mint had a week where it had to stop selling, in order to catch up with the record demand for bullion coins. The US/China trade war helped inspire a surge in demand for gold and silver, as an alternative store of wealth in the event that the banking system began to suffer from the trading restrictions.

Despite the stock market slump in the final weeks of 2018, the strong US Dollar meant that gold in Dollars was more expensive and thus less attractive as an investment for American customers.

US coin dealers came to the defence of the US Mint, citing a change in preference from customers. Dealers pointed to the desire for lower premiums, with the public buying older and traditionally less desirable coins to get the same precious metal quantity for the best value.

The same dealers, as well as other analysts, are suggesting a turnaround in 2019 if the global stock markets continue to display strong volatility, with one researcher from Banyan Hill referencing the new hesitance from Federal Reserve chair Jerome Powell and the probability of much fewer interest rate rises in the US for 2019; rises that had strengthened the Dollar so much in 2018.

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