by Rory Hall, The Daily Coin:
I have heard it said, multiple times, that retail gold and silver coins, bars and rounds sales are of no consequence to the overall market of gold and silver. The volume generated is so small, in comparison to a central bank order or imports into China or India, these 1, 2, 5, 10 and 100 ounce units are of little value when reviewing the market.
I have always disagreed with this nonsense and will now describe in two words why these sales are of the utmost importance – sentiment matters.
If gold and silver coins, bars and rounds are flying off the shelf – around the world – sentiment is very high and people are, on one hand, very optimistic while at the exact same time very pessimistic. Gold and silver do that to a person, because these monetary metals tell the truth and measure the health of our economy. The past year we have seen the steady decline in the movement of American Eagles, both gold and silver, with the Perth Mint moving more silver than the U.S. Mint in a couple of different months. This had never happened before – the Perth Mint had never once sold more silver coins than the U.S. Mint.
In March 2018 American Gold Eagles (AGE) sales dropped to the lowest point in the history of the program moving a mere 3,500 ounces, down more than 36% versus the 5.500 ounces sold in February 2018, so the trend is moving in the wrong direction.
Chart below is March 2017 AGE sales to Authorized Purchasers (AP)/Wholesalers
Total # of Coins Sold 56,000
As can be seen in the chart above there was a total of 16,000 one ounce coins/ounces sold in March 2017 and total of 21,000 ounces – for all coins sold, in March 2017.
If we compare March 2017 to March 2018 we see a dramatic change
A mere 2,500 AGE one ounce coins were sold to the AP’s in March 2018 with an additional 1,000 one-tenth ounce coins being sold as well for a total of 3,500 ounces and 12,500 total coins. Not a single half or quarter ounce AGE coin sold in March 2018. This is an 83% nosedive in sales in the all important year-over-year category in the total amount of gold ounces sold in March. If this were a normal business the doors would be closed, the inventory sold off and business shuttered.
If we turn to silver and the American Silver Eagle (ASE) sales we see the same thing.
In March 2017 the U.S. Mint moved a total of 1,615,000 ASE’s into the hands of the AP’s (plenty of 2017 ASE’s still available for purchase). In March 2018 the U.S. Mint moved only 915,000 ASE’s into the hands of the AP’s – remember this does not represent sales into the retail market, only to the wholesalers authorized to purchase from the Mint. This represents another major drop in the year-over-year sales category to the tune of 43%.