Mint Cuts Off Sales?

If anyone can make sense of this I would like to know. January bullion sales at the Mint were about normal and then suddenly in February and March they started to decline sharply and now there are days with no sales.

It seems to me that a coordinated effort by all dealers in the Country to stop buying as prices rise is very near zero. So what is up? At this pace the Mint would be on track for a record low sales month. What are the odds of having several days in a month with not a single coin sold?

 

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Computer glitch maybe?

 

No the sales declined from January through today and really dropped off in April to almost none. The Mint reports sales daily about 6 PM and there is really a pull back in the volume. Congress can enact some restrictions where they can only use US mined metals, but that would slow it not stop it.

Also, the Mint's own web site shows the same statistics. Sales in 2014 were similarly low, but I don't remember any event that would have triggered that change.

Typical Silver Eagle sales are about 4 million ounces per month. So with 20 or so working days they have to average 200k ounces per day. So mid way through the month they should be at about 2 million ounces and instead they are at 380k.

Something is up, but what?

 

Here is a thought. Winter is over and people are spending more time and money outside rather than on their computers ordering bullion?

 

Well a thought as well as people are buying stocks instead of bullion. But for either of these to be true then for the past ten years they would never have had this pattern. It would also have to be a uniquely US pattern. Sales do fall off after January every year, but never to this extent.

http://agaunews.com/comparative-bullion-sales-perth-u-s-royal-canadian-mints/

Also think about it, we dropped a bomb in Syria and that would usually trigger a flight to safety.

 

Taxes are due.

 

Holiday weekend perhaps. But that wouldn't explain the longer-term drop.

 

I have seen this mentioned in several places. No one is really sure but one popular explanation I have seen is the after effects of the abrupt change in the executive branch of the government.

 

Well since we are all speculating, how about space aliens sucked all the gold and silver out of the Mint!

Seriously I remember the Mint had a failure several years back with gold coins because the planchet suppliers could not create enough quality product. Congress sometimes restricts the Mint to domestically mined metals. Then there are taxes due, but then there are refunds. But it might be as simple as the Mint officials believe prices are rising and the longer they delay the more they make.

Perplexing and fun to speculate about and we might know if sales suddenly explode toward the upside. But as it is going April might be one of the lowest sales months on record.

 

Have you ever looked into collecting coins? If you have, you may have noticed there are some called "key dates". How do you suppose those come about?

 

I seem to recall that they are required to use US mined gold, but not silver. They are also, by law, required to mint enough to meet demand even if that involves buying PMs on the open market. I would assume, but don't know, that they hedge the prices just like the big bullion vendors do. This would imply that demand is down.

 

I certainly collect and also buy bullion. It seems to me the rarity of any issue these days comes on collector issues and not raw bullion sales where strike and quality are secondary to liquidity. The 1995-W ASE originated from this process. There is some discussion of the 2017-S ASE also falling into this production gap.

But I believe on the bullion side the Mint usually encourages volume over quality. And certainly with millions already issued this year rarity cannot come into play. But usually they issue 4 million+ ASE per month and they are down by millions YTD.

Just a curious anomalous event that will reveal its origin in time.

 

Now that you mention it I believe you are right on the gold vs silver purchases and from a pure demand perspective that makes sense. But days with zero sales of any coin just does not feel right for decreased demand because all dealers would have to act in unison, and from what I can tell in the coin/investing world there is no time that everybody agrees on market directions. The only way to generate zero sales would be from the Mint side.

 

Suppliers have had more than they can sell for a while, and have been reducing orders.

January was normal because the 2017s came out. Hot new product bunch of sales then back off the next month as excitement fades

 

I think you are directionally right, but for that to be the answer then one would assume that the same pattern would repeat each year, and it doesn't.



In 2016 YTD sales were double through March and have declined sharply in April.

 

No you wouldn't. The market dictates when bullion gets hot and when it doesn't. The only sure thing when it comes to bullion sales is that the brand new year coins will sell well for a couple weeks. That's it. Other than that value, politics, world events, the stock market ect ect all can have an impact on how much is or isn't sold. There is no pattern that should ever be expected to be repeated for sales volume year to year

 

any idea if there's a correlation to PM prices for those months?

If prices are going up (and one think's they'll come back down) a vendor would hold off buying due to potential future profitability .. hoping it comes back down.

 

The big vendors don't work like that. They hedge all their purchases against the paper market. That way they make the same money whether the price goes up or down. So their is no reason to hold back.

 

Sakata is right. US mint vendors have to buy ASEs in orders of 25k ounces or more. 6 and 7 plus figure vendors don't take risks like hoping a price goes the way they want it too