Despite all my experience in the precious metals market, I still have times when I am surprised by market circumstances. This has been especially true lately, when massive gold demand unexpectedly hit the U.S. Mint.
Gold entered 2021 coming from a fantastic 2020.
It’s hard to understate the momentum gold began this year with. Not only did the spot price of gold have its best annual performance in 10 years, and not only did the price of gold reach a new all-time high, but there was also a 455% increase in gold coin sales at the U.S. Mint in 2020. It’s easy to see why this can be a difficult market for minting institutions to keep up with the growing demand.
The U.S. Mint continues to experience exceptionally strong gold demand.
Recently, the U.S. Mint informed precious metals distributors that 1 oz. Gold American Eagle bullion coins would be temporarily unavailable until a later date. The Mint became unable to meet the demand for these U.S. bullion coins only one week after the newly minted American Eagle coins became available for 2021. This has never before happened in the history of the Gold American Eagle bullion program that the Mint has been unable to meet the demand for these U.S. bullion coins from distributors only one week into being made available. The Mint previously struggled to deliver precious metals products last year when supply chains were affected.
Authorized by the Gold Bullion Coin Act of 1985, the Gold American Eagle coin is one of the most prized coins in the world. With an iconic design considered among the most beautiful ever struck, the Gold American Eagle coin has consistently been the top-selling gold bullion coin in the United States. Each coin is made from 22-karat gold, minted in America, and is authorized legal tender by the U.S. Congress. The U.S. government guarantees its gold content, weight, and purity.
These new high levels of demand could become the norm in the marketplace.
Going forward, the Mint may have to adjust to accommodate for this new level of gold demand to avoid running into this problem again. As widely prized as Gold American Eagles have historically been, they appear to be on a trajectory to create new levels of demand. This event could be a bellwether for things to come, with gold coin demand rising as risks in the marketplace bring many to seek out such coins.
