American Eagle gold, silver coin demand on track for 10-year lows

NEW YORK (Reuters) – US Mint sales of American Eagle gold and silver coins are both on track for their weakest year since 2007, as investors shrug off geopolitical concerns and sell some silver in favor of investing in the stock markets’ record rally.

The weak sales come as investors sell their coins to dealers, spurring the strongest secondhand market for American Eagle silver coins in the United States since 2009, according to two US dealers.

This has caused dealers to cut premiums for the traditional safe-haven market. Coin premiums shift according to market supply and demand.

“Bullion gold coins are going for about $50 to $70 over the spot price,” said Ryan Denby, manager of Austin Rare Coins and Bullion in Austin, Texas. “We’re selling silver bullion coins at a premium of $2.50 to $4.50 per ounce.”

US Mint sales of American Eagle gold coins are on track for the weakest full year since 2007, after volumes in the first nine months of this year slid to 232,000 ounces, down 66% from the same period in 2016.

Sales of American Eagle silver coins totaled 15.9 million ounces during the first three quarters of 2017, down 48% from the same period a year ago and, like gold, on track for the weakest year since 2007, data showed.

“When people are selling their metal in the marketplace, there really isn’t a need to go to the mint when there’s enough inventory to meet the needs of the investor at lower rates,” said Walter Pehowich, executive vice president of Dillon Gage, a major precious-metals dealer in Addison, Texas.

Investors who typically buy physical precious metals to hedge against financial risk as well as in times of geopolitical turmoil are taking note of improving US economic growth. As a result, they are opting for riskier investments that offer higher returns, he added.