Important Charts On Gold & Silver Eagle Sales

After record buying of Gold Eagles during the precious metal smack-down earlier this year, sales of the official coins declined significantly in August & September.  However, sales have seen a substantial turn around this past month.

Sales of the Gold Eagles were only 11,500 oz in August and 13,000 oz in September.  The total of these two months were only half of the total amount shown in July, which recorded 50,500 oz of Gold Eagle sales

If we look at the chart below, we can see that Gold Eagle sales have increased to 46,500 oz, over 3 times the amount they were in the previous two months:

2013 Gold Eagle Sales OCT 2

I’d imagine the increase sales in the Gold Eagles were probably due to the drama of the U.S. Government shut-down along with the ongoing debt-ceiling fiasco.  For whatever reason, sales of the Gold Eagles have picked up once again.

I don’t have an updated chart for the Silver Eagles, but their present October sales figures are 3,087,000 for a total of 39,175,000 for 2013.  If we see another 3 million sales for each of the remaining two months of the year, total sales of Silver Eagles should reach a new record of 45 million in 2013.

Important Chart On Historic Silver-Gold Eagle Sales Ratio

To get a good idea of the interesting trend taking place in the Gold & Silver Eagle market, we need to go back and look at the historic sales data from the U.S. Mint.

Gold & Silver Eagle Sales Ratios

In the 28 years that the U.S. Mint has been producing the Eagle coins, over 360 million Silver Eagles and 20 million Gold Eagles were sold.  This turns out to be a historic Gold-Silver Eagle sales ratio of 18/1.

Assuming current spot prices plus typical premiums, the total value of Gold Eagles sold to date would be approximately $28 billion and Silver Eagles $9 billion.  Thus, we have a historic 3/1 value ratio.  Basically, investors have bought $3 dollars of Gold Eagles compared to every $1 of Silver Eagles over the lifespan of the program.

Now If we break down the data further, we can see a very interesting trend.

You will notice from the start of the program in 1986, sales of Gold Eagles were much higher in percentage terms compared to Silver Eagles.  From 1986-1995 sales of Gold Eagles were 6.3 million while Silver Eagles were 62 million.  So, for the first ten years, the ratio of Gold to Silver Eagles was 10/1.

Furthermore, from 1996-2005 Gold Eagle sales were 7.2 million while Silver Eagle sales hit 76 million.  Again, we had a little more than a 10/1 ratio during this ten-year time period.

However, something very interesting has taken place in the last 8 years.  Sales of Gold Eagles are estimated to be 6.5 million from 2006-2013 whereas Silver Eagle sales will hit an astounding 222 million.

This turns out to be a staggering 34/1 ratio.  In addition, the ratio will hit nearly 53/1 in 2013.  This is based on an estimated 45 million Silver Eagles & 850,000 oz of Gold Eagles for 2013.

By extrapolating the data from 2006-2013, the value of total Gold Eagles sold is approximately $9.1 billion and Silver Eagles are $5.6 billion.  Here we can see the value ratio is now less than 2/1 (1.6/1 to be exact).

Lastly, in 2013 the value ratio of Gold-Silver Eagles will fall to nearly 1/1.  Using the same current spot price plus premiums, the total value of Gold Eagles sold in 2013 will be worth $1.19 billion and Silver Eagles $1.13 billion (based on estimated 850,000 oz Gold Eagles @ $1,400 and 45 million Silver Eagles @ $25).

What is important to understand here is that Silver Eagles are selling 53 times more than Gold Eagles, but the value ratio is now 1/1.  Not only has the historic 28 year sales ratio of 18/1 increased almost three times to 53/1, but investors are now purchasing dollar for dollar the same amount of Silver Eagles as they are Gold Eagles.

Of course both gold and silver will be excellent investments going forward, but investors are banking on higher percentage gains in silver.  The market is realizing that Silver is the GO TO ASSET of the future.

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14 Comments on "Important Charts On Gold & Silver Eagle Sales"

  1. Interesting post Steve! While I’m long on both Silver and Gold, I’m hesitant to base too many assumptions on ratios. As your post clearly demonstrates, ratios are very useful for hindsight, but it is the future that concerns us.

    If a redesigned monetary system awaits us, it is fairly safe to assume that Central Banks will play a role in the new system; I don’t see Central banks accumulating Silver at all, which has more to do with the fact that Silver’s “role in the world” has changed from a monetary metal, to an industrial one.

    I guess we shall have to wait and see where we are going.

    • I kind of agree. If central banks decide they want gold, not silver, then gold might rise in value faster than silver. However since we are now right at the production price for both metals, they have an equal chance of going up from here.

      And in the end, I hope we’ll live in a world free and educated enough that citizens of it will decide that silver is the metal to go to, because it just makes all the sense in the world. Gold is pure liquidity (money), while silver also has some of that quality, and so many more uses.

    • As one who has read a lot and exchanged emails with several of the sharpest writers, interviewers, etc., and has a degree in Geology, I assure readers silver will outperform gold.

      Regardless of central bank demand; our society/civilization ceases to exist in even late 20th century form without abundant silver for industry. If wealth investors [like as few as a dozen billionaires] start buying and holding silver we will see the shortages that will disconnect silver from the ability to manipulate price. But it doesn’t take ultra-wealthy investors, just 2-5% more citizens buying. If they can’t get gold they may buy silver.

      However physical gold shortages may lead [predate] silver shortages.

    • Good point. Ratios can be deceptive. The fact that a lot more dollar-value of silver has changed in recent years, can also be understood as a rising velocity of silver. As the velocity of dollars fall, the velocity of silver and gold rises. This means that there is, in general, a shortage of cash for current use. Since we still live in a dollar-based world, a lot of people who bought at ridiculously low levels (say, 4-5 dollars) could have sold a part of their holdings into the handsome rise of 2010-2011, to raise liquidity. So silver changed hands but it was the same silver that other holders sold. Not every ounce of precious metals is bought by people who wish to hold them for old age or future generations.

    • Joe,

      I am looking beyond the upcoming “Revaluation” of Fiat Money. The reason why I believe silver is just as good as gold (even better) is due to its store of “Economic Energy.” This is a term coined by Mike Maloney. Basically, each gold and silver coin contain a certain amount of trade able “Economic Energy” that can be traded for other Economic Energy in the forms of goods and services.

      One thing is for sure, no one can know how the world transitions to a new currency system. Some believe it may be orderly, but others sense it could be chaos.

      Either way, the physical stores of wealth will be supreme going forward. And I believe silver’s value will increase a great deal more than gold due to its affordability, lack of above ground supplies and historic monetary nature.

      steve

  2. I-d suggest that Mikes “scam” (cough..cough)video had something to do with increased sales.WSY?

    • I doubt his videos created many new first time or renewed interest buyers. Despite intent of reaching more with his messages he is probably mostly preaching to the choir.

  3. Silver will out perform gold based on the fact that industrial demand has depleated above ground reserves *cough* “comex” *cough*.

    This chart measures EAGLE sales, not PEGASUS rounds which were sold a fraction over spot price. your argument is invalid sir.

    Thankyou Mr. Maloney! your explaination of the system means I can too without sounding like a “crazy conspiracy theorist”

  4. Steve

    It’s not a stretch to ask the question “where is this silver coming from?” We are now selling more ASE’s than silver mined in this country. But that’s only some of the question. Add in private mints, bar sales, ETF inflows, etc and again one has to ask “where is this silver coming from?” Finally, India is importing silver at record levels this year. Somewhere, someone is missing something. Oh sure, we all hear about manipulation, but ASE’s aren’t manipulated. India imports are not manipulated, the private mint sales are not manipulated. Where is all this silver coming from???

    Tas

    • As I said earlier, people tend to forget that not everyone is buying physical metals for old age or future generations. There is a lot of dishoarding going on because most people are cash-strapped and need liquidity because we still live in a fiat money world.

      • Anon

        I get that certainly. However, the US Mint is on pace to sell over 40 million brand spanking new ASE’s this year. I get people are also dishoarding, but that is never the less a massive number vs USA mine supply. I don’t believe we have that many people dishoarding at these prices but that will show up in the scrap numbers which I have not seen updated recently.

        I visit my local coin dealer and always look for “used” ASE’s, but they are hard to come by. Every now and then I get lucky, but that’s the exception.

        • Are mint sales exclusively generated from new mine supply? Or is it possible that the mint might melt down used bars? I really don’t know, I’m just asking. Because if they can get their hands on used bars and melt them down, then that’s the answer. We are not necessarily talking about the dishoarding of a few Eagles here and there.

          • Tas & Anon,

            As the U.S. Mint depleted the U.S. Strategic Silver Stockpile, the Senate & House passed the bill #2594 allowing the U.S. Mint to purchase silver on the open market.

            According to Wikipedia:

            The authorizing legislation for the American Silver Eagle bullion program stipulated that the silver used to mint the coins be acquired from the Defense National Stockpile with the intent to deplete the stockpile’s silver holdings slowly over several years. By 2002, it became apparent that the stockpile would be depleted and that further legislation would be required for the program to continue. On June 6, 2002, Senator Harry Reid (D-Nevada) introduced bill S. 2594, “Support of American Eagle Silver Bullion Program Act,” “to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted.” The bill was passed by the Senate on June 21 and by the House on June 27 and signed into law (Pub.L. 107-201, 116 Stat. 736) by President Bush on July 23, 2002.
            ————————

            I don’t believe there is a great deal of dis-hoarding going on in the silver market. However, the United States is importing a great deal of silver, mostly from Canada & Mexico.

            steve

  5. “Good Delivery Bar coins”

    What I am about to say really surprises most silver bugs….When buying wafers, rounds, or other bullion objects (eastern product) make sure whenever possible that proper hallmarks and maker’s marks are present – where appropriate. A hallmark present alone does not guarantee pedigree. (As a working rule I seldom buy unless appropriate marks are present.)

    Buying silver bullion coins and wafers should always be “Good Delivery Bar” quality as sourced from a list of same available at the LBMA web site…Please be informed that I have tested some generic coins and wafers that reveal the presence of copper. These items were likely sterling grade or worse. There is more than one way to defraud – fraud by percentages is out there – and it bears to keep this in mind when visiting dealers.

    This kind product fraud is rather more common than is believed.
    G.

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