The reserve currencies of the world are in trouble, Silver Wheaton CEO Randy Smallwood recently observed. When we see things like Brexit and German bonds trading below zero percent, when theres uncertainty in the world, people want to put their money in a safe place.
And for many investors both large and small, gold and silver bullion coins are that safe place. The worlds most in-demand bullion coin continues to be the U.S. Mints American Eagle. And so far in 2016, the silver American Eagle coin is on pace to set an all-time sales record. With 24.795 million ounces sold as of mid-June, the 2015 record total of 47 million coins is well within reach.
And its not just the U.S. Mint thats seeing massive amounts of bullion flying out the door. The Royal Canadian Mint reported that its first-quarter sales of its silver Maple Leaf bullion coin reached 10.6 million ounces, easily topping the record of 9.5 million sold in the third quarter of 2015. Q3 2015.
Australias Perth Mint also is grapping with huge demand, with sales of its silver coins doubling over the past year. And The Wall Street Journal just reported that its new kangaroo-themed silver bullion coin has been a blockbuster success, enjoying strong demand even from investors as far away as the United States.
We thought wed sell 5 million in the first year, then maybe 7.5 million in the second as the coin became more well known but the best-laid plans dont always go the way you expect, CEO Richard Hayes told the newspaper. Weve had to ramp up far more quickly, and the 5 million we planned to sell in the first year, we will more than double that.
To accommodate the renewed clamor for precious metals, the mint is expending its production capacity from 12 million coins per year to 22 million.
With the Federal Reserve announcing at its June meeting that it would leave interest rates unchanged and would slow the pace of its anticipated future rate hikes, look for bullion sales to remain elevated for the foreseeable future.
And when weighing whether to buy U.S. Mint-produced bullion or coins from foreign mints, consider this: In addition to commanding higher premiums than many other equivalent bullion coins, the $1 silver American Eagle as well as the $50 gold American Eagle enjoy the advantage of legal-tender status in the U.S.
That means that in a major crisis, these coins which of course are worth more than their respective face values because of their metallic content can serve as easily exchangeable currency. Coins from foreign mints, as beautiful as they are, dont have that advantage.