Category Archives: Silver

Perth Mint outpaces U.S. Mint in gold sales last Month

Posted on September 8, 2022 by admin

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(Kitco News) – A new trend could be emerging in the physical bullion marketplace as coin sales from the U.S. Mint were weaker than its counterpart in Australia.
In its monthly sales report, the Perth Mint said that it sold 84,976 ounces of minted gold products in August, an increase of 7% from July. At the same time, sales are up 57% compared to August 2021.
Meanwhile, data from the U.S. Mint shows that it sold 51,500 ounces in various denominations of American Eagle Gold bullion coins. Sales are down 20% from July and 62% from last year.
Meanwhile, the U.S. mint sold 850,000 one-ounce America Eagle silver bullion, unchanged from July. However, sales are down 78% from the more than 3 million coins sold last year.
In Australia, the Perth Mint said it sold 1.656 million ounces in silver minted products last month, down 33% from July but up 13% from August 2021.
Some market analysts have said that the Perth Mint’s strong sales could be due to more aggressive marketing, especially in Europe.
Everett Millman, precious metals expert at Gainesville Coins, said the Perth Mint could also be benefiting from growing Asian demand as lockdowns in China have started to ease.
“From a logistics perspective, it is probably easy and cheaper to ship gold and silver coins from Australia to India and Asia,” he said.
Millman said another factor that could be disrupting U.S. mint sales is that premiums for those coins are higher than other bullion like Kangaroos from the Perth Mint or Austria’s Vienna Philharmonic gold coins.
“Consumers are becoming a little more cost-conscious, and they are turning to other coins with lower premiums,” he said.
Premiums for U.S. Mint products, especially America Eagle Silver coins, have even attracted the ire of Congress. Last month, Rep. Alex Mooney (R-WV) sent a letter to U.S. Treasury Secretary Janet Yellen, calling her and U.S. Mint Director Ventris Gibson out for production issues for America Eagle Silver coins.
Mooney noted that the U.S. Mint has only made 11.6 million ounces of the silver bullion coin available to the public through July 2022 – barely half of what has been supplied through the first seven months of prior years when demand has been similarly strong.
“This shortage in U.S. Mint production has apparently led to extremely high market-based premiums on Silver Eagles (as high as 70% over the silver melt value) – even as comparable items produced by other sovereign mints and private mints were not beset by such shortages or historically high premiums,” Mooney wrote in the letter.

“The high costs resulting from the U.S. Mint production shortage directly harm U.S. citizens wishing to avail themselves of a U.S. legal tender means of protecting their financial security from the effects of inflation.”
Millman also noted that market factors are prompting investors to avoid gold and silver bullion. He added that gold prices have struggled as the Federal Reserve aggressively tightens its monetary policy. Rising interest rates have pushed the U.S. dollar to its highest level in 20 years and bond yields above 3%, two significant headwinds for precious metals.
However, Millman said he doesn’t expect the current environment to be sustainable. He said that although the Fed continues to hold its hawkish stance regarding interest rates, that position could quickly change as economic conditions deteriorate.
Millman noted that markets continue to see the Federal Reserve pivoting on interest rates, even if expectations have been pushed back until the second half of 2023.
Analysts have noted that gold and silver bullion should pick up as recession fears continue to grow.
“If you are looking for a safe-haven asset, there are not a lot of choices out there. Every other currency has been battered by the U.S. dollar, so gold remains an attractive monetary metal,” said Millman.
Phillip Streible, chief market strategist at Blue Line Futures, said that he expects bullion demand to pick up as investors start to realize the value in the marketplace.
He noted that the gold/silver ratio is trading near its highest level in roughly two years, holding around 95 points.
“You have never gone wrong buying silver when the ratio is above 95 points,” he said. “That trend goes all the way back to the 1980s.” Continue reading →

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Another 51 tonnes of gold flees ETFs in August – WGC

Posted on September 7, 2022 by admin

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(Kitco News) – Extraordinary strength in the U.S. dollar and rising bond yields continued to force investors out of the gold market as gold-backed exchange-traded funds saw outflows of 51 tonnes last month, valued at $2.9 billion, according to the latest data from the World Gold Council.
In a report Wednesday, the WGC said that this was the fourth consecutive month of ETF outflows in the gold market and came as the price ended August with a 2% loss. Gold prices are down 5% since the start of the year as 102 tonnes of gold have flowed out of global ETFs, the report said.
“The promising bounce that began in mid-July ran out of steam in mid-August after failing to break the US$1,800/oz resistance level. This performance came against a backdrop of continued higher yields and a stronger U.S. dollar as the U.S. Fed reaffirmed its commitment to further tightening,” the analysts said in their monthly outlook.
North American-listed funds saw outflows of 40 tonnes and continued to lead the exodus; however, the analysts noted that the outflows were broad-based worldwide.
“Continued hawkish commentary from U.S. Fed officials drove 2-yr rates above the June highs, to levels last seen during the Global Financial Crisis (GFC). Nearly all funds in the region experienced outflows, including those in the low-cost space,” the analysts said.
European-based gold funds saw outflows of 4.7 tonnes, and Asian markets saw outflows of 7.5 tonnes.
The WGC warned investors that the gold market could continue to struggle as central banks, led by the Federal Reserve, aggressively raise interest rates.
“Several Fed policymakers have been clear that despite the cooler inflation reading for July, it is too early to “declare victory” in the fight against rising prices and that tighter policy might be in place for some time,” the analysts said. “In the short term, interest rates in key markets are set to continue higher until central banks – most importantly the Fed – bring inflation closer to target. The European Central Bank and Bank of England, both similarly battling multi-decade high inflation, also have policy meetings in September where further rate hikes are expected. This will likely keep the pressure on gold.”

The short-term outlook comes as gold prices continue to test support just above $1,700 an ounce. However, the prominent line in the sand for many analysts is between $1,680 and $1,675. A drop below this support area could signal an end to gold’s multi-year uptrend.
WGC said that despite the growing pessimism, there are still some bright spots in the gold market. Although expectations that the Federal Reserve will pivot on its current tightening cycle have been pushed to later in 2023, it has not gone away.
“Investors appear reluctant to accept that the U.S. rate-hike cycle will extend beyond year-end: markets are pricing in expectations for the Fed to reverse course in late Q2 2023. This could reflect a belief that either inflation will come down quickly or a deep recession will force a policy rethink,” the analysts said.
The analysts said the growing threat of a global recession would continue supporting gold prices.
“Exploratory analysis shows that gold has proven to be one of the best-performing assets during U.S. recessions, especially when they have coincided with high inflation,” the analysts said. Continue reading →