Gold Bullion Sales at the U.S. Mint Rose 32% in the First Half of 2021

During June 2021, sales of the Gold American Eagles slowed to only 4,000 ounces due mostly to a cessation of sales in anticipation of the debut of the new reverse design coming later this month. However, the American Gold Buffalo coins were quite popular, selling 27,500 one-ounce gold coins in June 2021 – a gain of 267% over the 6,500 ounces sold in June 2020 during the height of the pandemic scare. Sales of both types of U.S. gold bullion coins were up 32.4% in the first half of 2021 versus the same six months in 2020.

Now, investors are looking forward to the design change on the Eagle reverse coming later this month, the first design change since the Eagle series debuted 35 years ago in 1986. There will also be a significant debut of a series of Morgan and Peace Silver Dollars to honor the centennial of the year in which the two coins made their transition in 1921 – the final Morgan Dollar mint year and the first Peace Dollar mint year. The new series will be distributed this fall, making 2021 a major Year of Transition in coinage.

We continue to see steep premiums on American Eagles due to delays in deliveries and high demand.

U.S. Budget Deficit Soars

Gold and silver remain relatively firm as we approach the mid-year point but the generally falling U.S. dollar and rising U.S. budget deficit are both inflationary and should contribute toward long-term gains in gold prices.

• The U.S. budget deficit is announced once per month. The most recent announcement was for May 2021 (on June 10). Government red ink for May 2021 was $132 billion, pushing the total deficit for the first eight months of Fiscal Year 2021 to $2.063 trillion.
• With four months left in FY21, the U.S. budget deficit is on pace to equal last year’s record $13 trillion annual deficit. Total federal debt now stands at $28.2 trillion.
• President Biden has proposed another multi-trillion infrastructure plan. In order to pass this, the “debt ceiling” will need to be raised before Congress goes into recess this August.
• The U.S. Dollar Index at the end of June stands at 91.9, down 10.6% from its peak on March 15, 2020, at the start of the COVID-19 pandemic. That’s when Congress and the Fed began creating trillions of new unbacked dollars for relief spending.

First-Half Summary

The first half was a tale of two quarters, with stocks beating precious metals in the first quarter and then the two asset classes growing in tandem during the second quarter, as the U.S. dollar fell in April and May before rallying in June.