OnlyGold Buy and Sell Gold Coins
The Definitive Site For Gold
1-800-800-4485
Contact Us
Toggle Menu



Gold Article - Full story

    Select a different article
U. S. GOLD BULLION SALES FALL FROM 1999 RECORD PACE
spacer
(August 30,2000) Last year, U.S. gold demand soared, spurred by a 20-year low price and Y2K fears. The world did not end January 1st, but gold sales did. Now, spot prices are sinking again, and gold bullion Eagles dated 2000 are going begging. An opportunity here?

The gold bullion market in the U.S. can be roughly measured in size by sales of Gold Eagles from the U.S. Mint. Since the advent of this gold bullion coin program in 1986, Eagles have become by far the number one bullion product sold in this country. Of course, millions of ounces of other forms of gold are also popular, but you can tally gold Eagle sales as a pretty reliable barometer of gold sales in the U.S.

For those of us in the bullion trade, it’s no secret that sales this year are down. And not just a little, but down to a fraction of last year’s volume. It seems that anybody thinking about buying gold last year did so, and a lot of people’s buying decisions that might normally have taken months to make, were speeded up by the pre-Y2K hype. The U.S. Mint sold record amounts of gold Eagles last year, and most gold dealers had the kind of volume sales year they hadn’t seen since the 1980’s.

But from the first week in January this year, things have been different in the physical gold markets. Many gold dealers have been buying back from the public record amounts of gold bullion, chiefly from those who bought gold as short-term Y2K crisis insurance. This flood of gold bullion back onto the market has meant that very few dealers have felt the need to order Y2000 dated gold Eagles. There is currently enough 'second-hand' physical bullion in the U.S. to meet the shrunken retail gold demand.

The U. S. Mint’s website (usmint.org) shows the monthly production figures for gold Eagles. The August 17, 2000 figures for this year so far, compared with the whole-year totals from previous years, tell the story of how few Year 2000-dated gold Eagles have been sold this year:

U.S. Gold Eagle mintages

Coin

Y2K so far 1999  Record low 
1-ounce 9,000 1,491,000 189,148  (1996)
Half ounce 26,000  244,000 24,100 (1991)
Quarter ounce 12,000 560,000  36,100   (1991)
Tenth ounce  90,000  2,700,000  159,500  (1988)

It's easy to see that this year's gold Eagles, of all sizes, are well on their way to being the scarcest ever produced. So, you might ask, is this a lock-certain sure-thing profit opportunity? Possibly, but remember, stuff happens. There are at least a couple of caveats we'll mention here:

First, the Y2000 figures posted represent sales so far this year, but in fact the Mint did ‘sell’ some of its Y2000 dated production ahead of time last year, in order that distributors would have newly-dated product the first week in January. So the Y2000 mintages shown here from the Mint’s website don’t include that first round of coins sold in 1999 and delivered on January 4, 2000. Actual mintage figures will prove to be higher, by the amount of those initial orders in the last week in December 1999.

Also, these mintage figures are public knowledge and are revised weekly on the Mint’s website for all the world to see. So, somewhere out there, smart money may be planning to buy large quantities of this so-far-neglected Y2000 gold Eagle production, perhaps enough to push up the production figures substantially in the last four months of the year.

Having said all that, the mintage figures so far for Year 2000 American gold Eagles are stunningly low. And since it is Mint policy to produce these coins only on demand, it’s going to take a surge of orders in these last months of the year to make Y2000 gold Eagles plentiful in the future. Otherwise, they are sure to become collectors' items because of their scarcity.

As a comparison, the scarcest half-ounce Eagle (1991) now sells for over $300 wholesale, the lowest-mintage quarter-ounce Eagle (1991) has a wholesale "bid" of $155, and the rarest of the tenth-ounce Eagles (1988) is sought by dealers for $50. These prices (from the August 11th weekly Coin Dealer Newsletter) average over twice the actual gold value of the coin itself. So, looking at the table above, we see that this year’s fractional Eagles may have some possibilities for appreciation in the future.

But, intriguingly, the Y2000 gold Eagle that has the lowest published mintage so far is the 1-ounce coin, showing only 9,000 coins sold so far (as of August 17, 2000). Demand has been so poor, that a couple of months went by this year in which the Mint did not sell even a single box (500 ounces) of 1-ounce gold Eagles. Last year, sales were nearly 3,000 of these 500-coin boxes.

Now, it is true that none of the earlier year 1-ounce gold Eagles bring any significant collectors premium at all. Partly, this is because the 1-ounce coin is usually sold in large quantities - the lowest previous mintage of 1-ounce Eagles is 1996’s production of 189,148 coins. But even if 1-ounce Eagle production doubles by the end of Y2000, the resulting 18,000 coins would still only be ONE-TENTH the amount struck in the formerly scarcest year of 1996.

It’s something to think about. If you’re buying physical gold bullion now, it might be wise to choose 2000-dated gold Eagles. We know from the figures above that scant few other people have.


 

Onlygold.Com BBB Business Review

Onlygold did business at the same location for more than sixteen years. CMI Gold & Silver Inc. has done business from three locations in Phoenix since 1973.

Both firms are Accredited Businesses with the Better Business Bureau, and neither firm has had a complaint filed with the BBB—ever!

In addition to gold, silver, platinum, and palladium in coin and bullion form, we also purchase a wide range of numismatic coins and currency for our retail business. Feel free to call us for quotes or price indications on anything in coins, bullion, and paper money.

We have really strong bids for gold and silver bullion and coins.

OnlyGold.com is owned & published by CMI Gold & Silver Inc. Copyright – CMI Gold & Silver Inc. All rights reserved.

All checks, shipments, and correspondence should be sent to:

CMIGS-Onlygold 3800 N. Central Avenue, 11th Floor, Phoenix, AZ 85012