U.S. Mint Suspends Some Gold Coin Sales After Demand Surge

Gold coin American Eagle
Scott Olson/Getty Images
NEW YORK -- The U.S. Mint said it has suspended sales of its one-tenth ounce American Eagle gold bullion coins as surging demand after bullion's plunge to two-year lows depleted the government's inventory.

This marks the first time it has stopped selling gold product since November 2009, dealers said. A spokesman for the Mint did not return calls seeking confirmation of that milestone.

The U.S. Mint, one of the world's leading gold and silver coin producers, halts coin sales from time to time as it runs out of coin blanks to meet increases in demand. So far in April, the U.S. Mint has sold 175,000 ounces of American Eagle gold coins, putting it on track to challenge a high of 231,500 ounces set in December 2009.

Since last Monday, U.S. gold coins have been flying off dealers' shelves as retail investors snap up bargains after bullion's historic plunge in price and into bear territory.

Michael Kramer, president of Manfra, Tordella & Brookes, a major U.S. coin dealer in New York, has been inundated by orders from existing and new wholesale and retail customers. "It's panic. This is one of the busiest times in quite a while. People think gold's at the lows and they want to take advantage," he said in an interview.

In contrast, investors bought bullion coins after the 2008 economic crisis for fears that they might miss out on gold's next rally.

Even after a small recovery this week from two-year lows of $1,321 an ounce, gold prices are down 16 percent year-to-date and are off 26 percent from the record highs of $1,920 an ounce set in September 2011.

In a memo to its authorized purchases sent late Monday, the Mint said that it continues to offer the one-ounce, one-half ounce and one-quarter ounce coins.

While the one-ounce American Eagle gold coins remain the most popular size, year-to-date demand for the one-tenth ounce coins has been up over 118 percent compared to the same period in 2012, the Mint said.

The spike in gold coin sales often reflects a desire among mom-and-pop investors to have physical metal as a store of value in troubled economic times.

Many analysts expect bullion to post its first annual loss after 12 consecutive years of gains as investors seek out better returns in other assets. U.S. equities have hit record highs.

Gold exchange-traded funds have also been hit by a big wave of redemptions as institutional investors pull cash out of precious metals and retail investors seek physical coins and bars.

In addition, the Mint has been allocating its silver coins since late January due to strong demand and limited inventory.

(Reporting by Frank Tang and Josephine Mason; editing by Gary Hill and Bob Burgdorfer)

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smaselli13

There are many well informed and intelligent people who believe the financial disaster is at hand. Either total collapse or horrific inflation is the only outcome a reasonable person can imagine. It will happen in an instant, and it will be everyone for themselves............... no more free Govt stuff for the dependents.

April 24 2013 at 11:38 PM Report abuse rate up rate down Reply
Paul Baker

Bullets are now gold.

April 24 2013 at 10:40 PM Report abuse +1 rate up rate down Reply
mecnsd

I've often wondered about these TV adverts where they hawk gold. Just how many times have they or do they sell, the same gold option to people. Many never take physical possession and have the company 'store it' for them. It all sounds rather Ponzi to me.....

April 24 2013 at 10:26 PM Report abuse +1 rate up rate down Reply
mackrel2

It is not just mom and pop editor. Try and take delivery on the futures exchange. Cash settlements only. Can you say default?

April 24 2013 at 10:17 PM Report abuse rate up rate down Reply
metusmetu

Yes, gold is valuable, ....but why? Only in the "minds" of humans is it valuable, it's pretty, and they like to wear it on their bodies, or have coins minted to keep in their safes'.
Otherwise it nothing but a yellowish soft metal, similar to lead. It's not all that easy to find, but then neither are arrowheads,.............basically gold is no more valuable than rocks......!
A good Porterhouse steak to me is more valuable than gold, at least I can eat it, and sustain my life, try doing that with gold. People/humans are so stupid,.......how many animals do you see wearing gold,........or eating it??

April 24 2013 at 10:08 PM Report abuse +1 rate up rate down Reply
2 replies to metusmetu's comment
bennett_carl

I agree ... to me, value comes in the form of shelter and sustinence, not in coins. Besides, the only precious metals I know of relate to those in automatic weapons.

April 24 2013 at 10:42 PM Report abuse rate up rate down Reply
smaselli13

Good for you, but in a period of financial disaster, what are you going to buy that steak with.....................an inflated US dollar with no value? But you probably need to go on a diet anyway................................

April 24 2013 at 11:41 PM Report abuse rate up rate down Reply
1 reply to smaselli13's comment
fcsuper

In financial disaster, gold is going to plummet as much as everything else (if not more). Gold is not a shelter against an economic melt down. Useful metals (nickel, silver) will also crash in value, but ultimately will climb faster out of the recovery because new sources for those elements are just as rare, and they are actually used in industry...which means, if there is a major war (which often happens when economies collapse), it will be far better to have metals used in industry rather than those only used in decoration.

April 25 2013 at 4:19 PM Report abuse rate up rate down
emmett

Silver is at an affordable price and should be gobbled-up. It has more commercial uses than gold and it's reserves are being stressed .

April 24 2013 at 9:02 PM Report abuse +1 rate up rate down Reply
1 reply to emmett's comment
fcsuper

No only that, new sources for silver are dwindling too.

April 25 2013 at 4:25 PM Report abuse rate up rate down Reply
Ricardo

RE: Wonder why China, Russia, India, Germany, France, etc, are buying gold?"

To build a golden rocket to get the hell out of Earth by 2015.

April 24 2013 at 7:46 PM Report abuse +2 rate up rate down Reply
sagg1948

Why are these idiots paying the mint premium prices for gold coins when a ounce of gold is $1430 an ounce,the mint is a ripoff

April 24 2013 at 7:23 PM Report abuse -2 rate up rate down Reply
Gary A. Skogebo

Wonder why China, Russia, India, Germany, France, etc, are buying gold?

April 24 2013 at 7:22 PM Report abuse +1 rate up rate down Reply
1 reply to Gary A. Skogebo's comment
fcsuper

Old World phisophy that gold has some sort of crash proof intrinsic value. If a world wide crash comes, gold is going to be as worthless as any other commondity.

April 25 2013 at 4:27 PM Report abuse rate up rate down Reply
walkupt

I do not see gold as a good investment for the near future. As the economy improves ( which it is), the value of gold will decrease ( and it has been decreasing). Maybe for 20 -30 years they will increase in value, especially if we have another economic crisis.

April 24 2013 at 6:37 PM Report abuse -1 rate up rate down Reply
2 replies to walkupt's comment
brent

Sorry, but the economy is not improving. It is all smoke and mirrors.

April 24 2013 at 6:47 PM Report abuse +7 rate up rate down Reply
yankeei

Gold always goes up when the economy is poor. Yes, it may go down, but when you see countries like China buying up as much as it can, it's never a poor investment. I predict it won't go below one thousand an onze any time soon.

April 24 2013 at 7:22 PM Report abuse +3 rate up rate down Reply
1 reply to yankeei's comment
fcsuper

They'll see how poor the investment is when they have all this gold and no buyers, but they cannot feed their people.

April 25 2013 at 4:28 PM Report abuse rate up rate down