Due to the pandemic, there is a shortage of circulating coinage in many parts of the country. The U.S. Mint also continues to reduce its production and sales of Silver American Eagles and smaller-denomination Gold American Eagles. There were no sales of $5 (one-tenth ounce) Gold Eagles during the April-June quarter and limited sales of other fractional-ounce Gold Eagles. In June, 42,500 of 44,000 ounces of all Gold Eagles sold (96.6%) were full one-ounce Gold American Eagles, making the premiums on smaller-denomination eagles higher. Production of everything but one-ounce gold is down. Silver American Eagle production and sales are also down, but premiums were up due to the pandemic, since fewer Mint employees were consistently available, and the Mint sometimes closed.
American Eagle bullion coins are usually struck at the West Point Mint, but the Philadelphia Mint was called on to help with production and produced 240,000 Silver Eagles in April. Historically, these will likely be called “Pandemic Eagles,” and, when certified, have already commanded a premium.
June closed the first half of the year strongly with 44,000 ounces of Gold American Eagles sold during the month vs. only 4,500 ounces sold in June 2019, an increase of 878%! For the first six months of 2020, sales of Gold American Eagles reached 379,000 Troy ounces, up 249% from the 108,500 ounces sold last year during the same period. Sales would have been higher if the West Point Mint had not suffered multiple COVID-19-related interruptions.
The Mint sold 7,500 American Buffalo one-ounce gold coins in June 2020, 150% above the 3,000 coins sold in June 2019. This lifted their year-to-date sales total to 126,000 ounces, 165% above the 2019 levels.
Premiums on Silver Eagles are still high because the demand is so much higher than the Mint can supply. Despite production interruptions since March, sales of American Silver Eagle sales are up 25.7% for the year, so far – to 12,596,500, or 25% more than the 10,022,000 coins sold in the first six months in 2019.
Gold was the Best Investment in the First Half of 2020
On Tuesday, June 30, Gold for August delivery – the most actively-traded gold futures contract – closed at $1,800.50, the first-time gold traded above $1,800 since September of 2011. The spot price that day was $1,793, delivering an 18.35% first-half gain for gold, eclipsing all other major investments assets.
The tech-heavy NASDAQ gained over 12%, but the other major U.S. and foreign market indexes all fell:
Recently released World Gold Council figures show $39.5 billion flowed into gold-backed ETFs in the first half of the year. That beat a previous record from 2016 and increased global gold holdings to a record.
Silver Led All Metals in the Second Quarter
Although silver was flat for the first half of 2020, it was a tale of two quarters. Silver led all metals in the second quarter with a 31.52% gain vs +16.0% for platinum and +13.24% for Gold – but it was the best quarter for gold since 2016. This is especially impressive since the second quarter (April through June) is a seasonally weak time for gold, which has its strongest season from September to December.