A Feb. 26 CoinWeek article headline posed the question, Are gold coins driving buying momentum? Judging by the U.S. Mints February sales figures, the answer is leaning toward yes.
Although gold is outshining silver this year, finishing the month up more than 10% to add to its 6% gain in January, the Mints 2016 silver American Eagle sales have smashed yet another record. Sales hit 4,782,000 for the month, making it the best-performing February in Mint history and the 11th-highest month ever.
On pace for another annual record: Almost 11 million silver Eagles have been purchased in 2016, and if this pace continues, the sales record of 47 million set last year could well be shattered.
Although totals dipped by 20% from this past Januarys 5,954,500 tally, sales exploded by 58% versus those in February 2015. The sales totals are all the more amazing considering that the Mint continues to ration silver Eagles on a weekly basis, allocating a maximum number of coins (usually around 1 million) to wholesalers because of a shortage of planchets, or coin blanks.
Gold Eagle sales quadruple year over year: Gold American Eagles also are in hot demand. The Mint reported that 83,500 ounces of the 2016 issues were sold in February. Thats down 33% versus the prior month but up more than 350% over the 18,500 ounces purchased in February 2015. For the year so far, sales total 207,500 ounces for a 108.5% increase from the 99,500 ounces sold during the first two months of last year, Coin News reported.
The Mints other gold bullion coin, the gold Buffalo, followed a similar pattern: February saw 19,000 ounces sold, down about 44% versus Januarys 34,000-ounce total but up more than 58% versus February 2015s sales.
Singapore firms sales doubling monthly: And its not just the U.S. Mint reporting massive interest in metals. Check out this recent CNBC interview with Raphael Scherer, a chief international officer at Degussa. Our subsidiary here in Singapore is doubling their sales numbers almost every month now, he said. Buyers come from almost every place in the world. Theyre buying in particular the investment products like bullion and coins, kilo bars, Krugerrands, Maple Leafs, mainly investment products. Our forecast is going above $1,300 going toward $1,400 by the end of this year.
Thus, while gold ETF inflows have helped power the yellow metal into bullish territory, so too have coin sales.
Gold-silver ratio zooming higher: And its no wonder that some investors are piling into silver. The gold-silver ratio recently crossed above 83, its highest level since 2008, meaning that it takes about 83 ounces of silver to buy one ounce of gold.
Some see that as a sign that silver is undervalued. Its also a testament to golds allure as a safe haven amid 2016s multiple uncertainties.
Gold is showing the way higher for silver, wrote Jesses Amricain Caf. The gold/silver ratio is hovering around 80 which indicates either a secular squeeze in physical gold and/or a risk related flight to safety.
Silver is half precious metal, half industrial metal, and it hasnt been the safety play that gold has, Optionsellers.com founder James Cordier told Bloomberg. Gold certainly has done extremely well with uncertainty around the world and with the idea that interest rates wont be rising. Until global growth comes up, the gold-silver ratio will continue to widen.
Buying silver with the gold/silver ratio at 80 is like buying gold on steroids, added Dave Kranzler of Investment Research Dynamics.
Precious metals remain the safety play of 2016, as evidenced by physical coin and bar sales. Pick your poison, gold and/or silver. But right now, silver offers a cheap entry price, especially for those who think gold has risen too quickly in recent weeks.