September 2021 - Week 1 Edition
Month-End “Mint & Market Review” for August
Sales of American Silver Eagle and American Gold Eagle coins picked up in August with 3.93 million American Silver Eagles sold (vs. 3.1 million in July), and 136,000 ounces of American Gold Eagles sold in August vs. 58,500 in July.
During the first eight months of 2021, 847,500 Troy ounces of American Gold Eagles were sold by the U.S. Mint, a 44% increase over last year’s sales of 589,500 Troy ounces of American Gold Eagles in the same eight months. Both numbers are spectacularly higher than the meager 122,000 ounces sold in the same eight months in 2019, despite periodic work shutdowns in both 2020 and 2021 due to coronavirus.
For the first eight months of 2021, the U.S. Mint sold 22,940,500 one-ounce American Silver Eagles. This was a 41% increase over the 16,294,000 Silver American Eagles sold in the same eight months of 2019. It was also a 33% increase over the 12,269,000 ounces sold in the same eight months of 2019 despite several work stoppages and delays, plus increases in premiums to dealers.
The Mint has not separated the sales figures of the two types of 2021 Eagle designs yet, but that should come at a later date. Also, sales of the American Buffalo Gold coin totaled 235,500 ounces for the first eight months of 2021, up 28% from 2020 when 184,000 one-ounce American Buffalo Gold coins were sold.
Gold Leaps Upward
On Friday, August 27, gold leaped from under $1,790 at 9:30am to over $1,815 by noon (Eastern time), mostly in response to unusually clear comments by Federal Reserve Chairman Jerome Powell at the “virtual” Jackson Hole conference of central bankers. He said that any tapering of the Fed’s quantitative easing (QE) wouldn’t be linked to an increase in interest rates. Gold held on to those gains over weekend.
Fed Chairman Powell Indicates No Interest Rate Increases Coming Soon
Since 2015, Europe and Japan have offered negative interest rates – that’s where you are guaranteed to lose money by making a deposit with the government. The U.S. has been offering ultra-low interest rates in the range of zero to 0.25% for the Federal Funds rate and about 1.2 to 1.5% for 10-year bonds.
Those small dollar returns have been enough to boost the value of the U.S. dollar as investors sought the higher yield in the U.S. dollar vs. other major currencies. The ultra-low returns in all major currencies – the dollar, yen and euro – give gold an even playing field in the international marketplace. This is one reason why gold bottomed out at around $1,050 in late 2015 and has been rising strongly since 2016.
This year, gold has been flat or trending down, often due to rumors that the Federal Reserve might raise short-term interest rates (i.e., the Fed Funds Rate) based on a strongly recovering economy. However, the economy has taken a hit in recent weeks due to a revival of the COVID threat through the Delta variant. The Federal Reserve will be careful the economy is on firm footing before raising interest rates.
Speaking at the “virtual” Jackson Hole conference of central bankers (meeting via Zoom due to COVID), Federal Reserve Chairman Jerome Powell was unusually clear stating tapering of the $120 billion per month in bond buying – quantitative easing (QE) – would have no impact on raising interest rates. Specifically, he said that winding down QE would not imply raising the Fed Funds Rate.
“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test. We have said that we will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time. We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2 percent inflation on a sustainable basis.”
On this news, gold rose $25 per ounce. The U.S. Dollar Index (DXY) also fell by 0.5% in short order as the chances of higher interest rates quickly faded. A declining dollar often leads to rising gold prices.
Many of Our Select Four Program Coins are Rising in Price
I recently returned from the “World’s Fair of Money,” held August 10-14 in Chicago, sponsored by the American Numismatic Association, where I was presented with the prestigious Dealer of the Year award. While there, I noticed the quality rare coins from our Project 2020, a subset of our Select Four programs, were mostly priced higher with fewer coins available. The fewer coins available highlights the need to get in line with your Account Representative for the best examples of the in-demand coins in those series. As I have said, you’re either a fast rabbit or a dead rabbit when high demand coins are snapped up rapidly.
Our Select Four recommendations focus on four major gold coin series we believe most likely to see ongoing collector and dealer demand with potential future price increases. They are: (1) Type II and Type III Liberty Head Double Eagles, minted 1866 to 1907; (2) Indian Head Gold Coins minted periodically from 1854 to 1933 in denominations of $2.50 Quarter Eagle, $5 Half Eagle, $10 Eagle and $3 Indian Princess; (3) Rare Gold Commemorative Quarter Eagles, namely the 1915-S Panama-Pacific Exposition Quarter Eagle and the 1926 Sesquicentennial Independence Quarter Eagle; and (4) The $10 and $25 American Gold Eagle: Fewer $10 and $25 Eagles were minted than other denominations almost every year since the series began in 1986, creating a modern rarity.
Call your representative today to line up one or more of these gold rarities when they become available.
Important Disclosure Notification: All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Publisher's knowledge at this time. They are not guaranteed in any way by anybody and are subject to change over time. The Publisher disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein. Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability. All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions. Arbitration: This company strives to handle customer complaint issues directly with customer in an expeditious manner. In the event an amicable resolution cannot be reached, you agree to accept binding arbitration. Any dispute, controversy, claim or disagreement arising out of or relating to transactions between you and this company shall be resolved by binding arbitration pursuant to the Federal Arbitration Act and conducted in Beaumont, Jefferson County, Texas. It is understood that the parties waive any right to a jury trial. Judgment upon the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Reproduction or quotation of this newsletter is prohibited without written permission of the Publisher.
