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(Kitco News) Despite the price of gold remaining at the same trading range in the last month, the US Mint reported impressive sales of gold and silver coins in January.
A total of 220,500 ounces of American Eagle gold coins were sold in January 2021. This is 267% higher than the amount sold in January 2020, which equates to only 60,000 ounces. January sales also marked the strongest month of April 2013.
In silver, a total of 4,775,000 ounces of American Eagle silver coins were sold in January this year, compared to 3,846,000 ounces sold in January 2020. This represents an increase of 24.15%, which marked the best silver coins in January 2017.
The U.S. rationed sales of its silver coins because of “exceptional continuing market demand” and limited supply, the U.S. quoted Bloomberg as saying Tuesday.
The January jump in sales coincided with an overwhelming demand from retail investors who wanted to invest in physical metal. Many precious metal dealers reported delays in ordering silver products last weekend amid record demand.
The US currency said on Tuesday that it had problems meeting demand due to plant capacity issues and growing interest in precious metals by 2020 and January 2021.
Total sales of US gold bullion coins rose 258% last year, while silver coin sales rose 28%, the US currency said in a statement. Growing demand is expanding in 2021, the currency added.
By 2021, the U.S. Mint said it has a limited window to produce gold and silver coins as the redesigned coins are scheduled to be released in the summer. The Mint also said it would limit the distribution of its gold, silver and platinum coins to certain dealers due to higher demand and logistical problems related to the coronavirus, Reuters reported, citing the Currency’s statement.
“Retail demand had an amazing start to the year,” said Suki Cooper, Standard Chartered analyst for precious metals. “Gold coin sales tend to be stronger during Democratic administrations than during Republican ones.”
The situation for physical silver will be more complicated this year due to the attempt to collect the silver that the market saw earlier this week.
Peter Hug, global trading director at Kitco Metals, said the attempt to squeeze the money was “gone” now that bullion stocks were depleted as a result, with premiums up and few physical products left to sell.
“Basically, this intention to try to squeeze [silver] the market has been … absolutely stupid, now it’s upside down and now there are no retail products on the market, and the first ones are right at the levels of March last year, “he told Kitco News this week.
Premiums for physical silver products will not normalize until the supply chain stabilizes, Hug added.
“Right now, the supply chain is probably four to eight weeks, so how do you set your premiums without knowing what kind of volatility we are looking for in the future, so what dealers are doing is just raising premiums. They cover their positions in one thousand ounce bars because they are readily available, and when the product enters, they will exchange their one thousand ounce bars for the product because they will still receive that product at distribution prices and in the same time, they covered their positions, ”he said.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept guilt for losses and / or damages resulting from the use of this publication.