US Mint Runs Out Of Tenth-Ounce Gold Coin Inventory Day After Its Release For Broad Purchase

Tyler Durden's picture

The sad state of affairs in gold land: the premium for the 1 ounce Gold Eagle coins has expanded from $59 to $99, Krugerrands are not available for sale in most places, and this most recent development just out of the US Mint: the one-tenth ounce American Eagle inventory at the mint has been depleted, almost instantaneously after the coin was made available for purchase. This occurred the day after the mint announced the release of fractional Eagle Gold Bullion Coins in one-half ounce, one-quarter ounce, and one-tenth ounce weights. As Coin News reports:

The Mint sold 345,000 coins to its authorized purchasers for a total of 58,000 ounces of gold. That, without a single one-ounce size leaving Mint doors.

Sales of 2009 one-ounce sized gold eagles are expected to resume in
"early December" while the production of the 2010-dated American Eagle
Gold and Silver One Ounce Bullion Coin are expected to begin in Jan.,
2010.

So no sooner did the Mint start selling the new 1/10 ounce denominated gold pieces, than they ran out.

The US Mint ran out of one ounce 2009 American Gold Eagle coins
last week which caused their temporary suspension, and now the
fractional sizes that were just launched are either gone or being
allocated following record one-day sales.

This is the notice sent out by the Mint to authorized purchasers:

Due to strong demand, the American Eagle Gold Tenth-Ounce Coin
inventory was depleted. The inventory for the half-ounce and
quarter-ounce coins remains very limited. We will offer the remaining
half-ounce and quarter-ounce coins for sale via the United States Mint
standard allocation process.

And indicative of the massive gold demand, the 24-karat one ounce Buffalo coin inventory was depleted as well:

"The United States Mint has depleted its inventory of 2009 American
Buffalo One Ounce Gold Bullion Coins," the US Mint stated in a
memorandum to authorized purchasers of the precious metal coins. "No
additional inventory will be made available. As additional information
becomes available regarding 2010-dated American Buffalo One Once Gold
Bullion Coins, you will be notified."

Following their launch on Oct. 15, the selling pace was fierce. US Mint figures have the 2009-dated coins at 198,000. By comparison, the Mint has said 172,000 were sold in all of 2008 while 167,500 were purchased in 2007.

It appears the 79% of the US population that disapproves of Bernanke and is asking for his head, is not sitting idly and every single day continues expressing its "vote" of no confidence in the Chairman by making gold increasingly scarcer. In the meantime, the massive demand for silver coins is also starting to hit the Mint, which as of today had none in store.

 

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trav777's picture

last time we had deflation, premiums blew way out.

I am seeing $63 spreads from spot to sell as of Fri on CNI's site.

at some point the paper economy is going to vaporize

Anonymous's picture

Try Tulving, $75 over for buy and $35 over sell. Smaller spread, better pricing.

Ivanovich's picture

Insert Tungsten coin joke anywhere in this thread.

lsbumblebee's picture

I heard somebody told India that gold is in a bubble so they're going to sell that 200 tons back to the IMF. Somebody says they're going to seek safe haven in fresh minty green US dollars.

Not.

LoneStarHog's picture

Hmmmmm...My guess is that Denninger swapped his entire mattress at the U.S. Mint.

Gordon_Gekko's picture

What the idiot dollar deflationists ala Mish, Prechter, Karl Denninger et. al. don't know is that such shortages are a canary in the coalmine signifying impending devaluation of the paper currency being issued in the area where the shortage occurs as the smart money/insiders are buying all the physical (as has been happening in Vietnam recently). Force majure is only for the paper Gold; no such concept applies to physical Gold.

Anonymous's picture

Actually, it was the Franklin Mint. He bought all the remaining Civil War Chess Sets. He has now cornered the market on Civil War Chess Sets--take that, bitches!

lizzy36's picture

When i read this "It appears the 79% of the US population that disapproves of Bernanke",i can't help think that there is no way that 20% of Americans know who Ben Bernanke is (let alone what he does or doesn't do).  But i am a cynic.

Cursive's picture

It doesn't matter whether they know who he is or not.  The public mood is grim and getting grimmer.  If the question was worded in such a way as to link anyone to the current administration of the economy, I'm thinking the vote would be the same regardless of name.

Assetman's picture

The shrinking supply is just further indication that the public distrusts what the Administration and the Federal Reserve is doing from a policy standpoint.

While there are many that are looking at gold as the investment of the century right now, more and more people who are buying these coins simply want gold as a stable store of value and "insurance policy" on their currency.

If the power brokers in charge do not restore that trust through more rational policies-- this is exactly what they should expect.  My sense is that they know the consequences, yet are willing to play the same game, anyway.

APC's picture

...more and more people who are buying these coins simply want gold as a stable store of value and "insurance policy" on their currency.

 

Do you think.  I'm thinking folks are afraid of a deflationary spiral that will see no dollars in circulation.  1/10 ounce gold coins is almost as good as having gold thread or wire.  If you wanted to "store value", and gold can certainly do that for you, it's not going to be for the 12 to 15 hundred dollars you may have in the cookie jar.  And gold bars would probably not be the best to barter with.

lsbumblebee's picture

They thought the pollster said "lemon snackies".

Gordon_Gekko's picture

I think you're spot on. If you don't disapprove of Bernanke either you are naive or in cahoots with that criminal.

Anonymous's picture

And of that 79%, what less than 5% of those people own gold? It's only been over the last 6 to 12 months that when I mention buying gold, people don't look at me with a blank stare.

Señor Tranche's picture

Krugerrands are not available for sale in most place

 

www.apmex.com

Spot + $50 (if you buy >20, otherwise $55)

faustian bargain's picture

I'm experiencing a delay with my small order from apmex, currently. I really hope that doesn't mean they don't have the actual stuff to send me.

Señor Tranche's picture

I've ordered from them many times.  They always have given excellent customer service.  If they say it's in stock it almost certainly is.  Delay probably in order processing from large volumes.

quezrho's picture

This seems like a tell-tale sign that gold is bubbling.  When the dumbasses join in, history repeats itself.  I'm not saying golds's run is done.  Just that t feels like buying homes in Vegas in 2006. 

LoneStarHog's picture

Only about FIVE PERCENT of the population is invested in gold/silver.  Wanna tell me how that is BUBBLING?  When I mention gold/silver to family/friends/etc. I still get a BLANK STARE.

Bubbling my ass!

quezrho's picture

I have had a different experience.  Seems very well bought in based on similar observations. 

Thomas's picture

I concur that retailers are buying the tenth ounce coins, so the bubbling statement is logical. I also think we have a way to go. I have never seen such a despised and poorly invested bubble.

Anonymous's picture

We shall see. Many told me in 2006 that I'd be nuts not to buy a second property. So many are jumping on the Gold bandwagon that the US gov't will do something to correct its course.

Anonymous's picture

American Eagles on the cover of Time in 3...2...1...

hack3434's picture

Maybe but I don't see people taking $500k adjustable rate loans to buy physical. 

Anonymous's picture

It's a new paradigm, and anyone who doesnt buy now will be priced out forever. People who do buy now will be rewarded with a lifetime of riches, as gold will continue its yearly 30% price appreciation.

Retail investors, and those born in future generations will be unable to afford the $5000+/ounce spot price, or diversify their portfolios. They will end up buying gold weighed in grams, or nothing at all.

This asset bubble is different than the others. It will never slow down or pop. The gains are permanent.

Winisk's picture

Gold isn't even close to bubble territory from my observations.  The dumb asses are still holding onto their equity mutual funds hoping to recover their losses because their dumb ass advisers won't even consider gold as an investment.  Oooh...it's so risky.

Gold has just begun to get the public's attention.   The double standard in the MSM is so strikingly biased against gold.  As soon as it hits a record high, it must be a bubble.  As soon as we see those wacky commercials on late night TV, gold must be in a bubble.  Yet when the stock market hits a high and we are inundated by those feel good banking and mutual fund advertisements literally everywhere we turn, stocks are never considered a bubble.  When shows like 'Flip This House' are on TV, and the newspapers have entire sections devoted to promoting the newest real estate development, it isn't considered a bubble.

Gold isn't even on the radar for the average investor I speak to.  For them, gold is still considered a risky, quirky thing.  

arkady's picture

How come no one is talking about the potential of the USD breakout?  There surge is impressive and if it holds these prices then equities and commodities are poised to pull back.

This does not mean it's over for gold, but short term buying may be exhausted.  Frankly, for long term gold holding a pullback here is healthy.

Slewburger's picture

 Its a short term breakout....dollar reverse carry. Thats not my bag but I doubt anybody here would get caught with that position.

Cursive's picture

So, the demand for gold-plated trinkets is high?

orca's picture

Regardless of price COMEX will be blown out of the water on settle volume before the end of March. This isn't about bubbles or "different this time", this is about security, sanity, self-preservation, trust.

Anonymous's picture

Every quarter I hear the same thing *YAWN* never happens. I buy physical anyway, but the goldbug-freakout corner of the blogosphere is pretty consistently wrong. Just watch it for a few quarters, you'll see.

Speaking of which: Where's the martial law and all those bank holidays that were supposed to turn the US landscape into a scene from Mad Max and the Thunderdome? My popcorn is getting cold.

Anonymous's picture

Anyone know if this was similar to what happened in 1979? What are the odds of a blow off top in to next year?

Anonymous's picture

According to Jim Sinclair jsmineset.com it is not. Jim said the chart has been a Swiss stair: goes up, goes sideways, goes up, etc. He's been saying $1225 for over 2 years. Next stop $1650 by Jan 2011. This time its Austrian! [Keynesianism wont cut it this time]

00777

drbill's picture

Paper gold; -$50 on Friday. Physical gold; still going up!

 

Its not rocket science...

 

The following is a list of fiat currencies that have not failed:

 

end of list

Anonymous's picture

Quezrho,

The overall particpation rate is low. Few people own any gold. The purchase of such small "coins" at high premiums is telling in terms of HH purchasing power...1/10th ozzie coin isn't much of a hedge.

Anonymous's picture

That is the whole idea behind the latest push with dollar. To scare people off of buying gold. I think what deflationist miss the most,is the phsycological factor of gold. Whether there might be deflation(gold down),or inflation(gold up),people on the most are wary of holding a paper that they don't know how much its worth. But at least with gold,they know that no matter what ,they would have something that they could exchange for necceties. It is the panic,more than the greed that is pushing people into gold. And it will continue to push them there no matter what the dollar or equities do,or don't do....

quezrho's picture

The following is a list of bubbles that haven't popped:

 

end of list

Anonymous's picture

Careful quezrho. The dudes here piled gold back into their portfolios when it "corrected" at a higher price over the last few weeks. Stuck, the panting begins.

Panic bitches!

nope-1004's picture

Yup.  We all despise Wall Street for the financial bubble, yet contribute and see nothing wrong with profiting somehow from another bubble, Gold.

Some food for thought:  Is the current price of gold and its activities a direct result of the dollar devaluation?  Or is the dollar being devalued because of the equities (excess liquidity) and gold bubble?

Internet Tough Guy's picture

It's not a bubble, just a wealth transfer. I can't turn on the tv without a cash for gold ad blaring. Drive down the street and signs 'we buy gold' are everywhere.

Dumb money is selling, smart is buying. Which are you?

 

Anonymous's picture

Almost correct...

Bailout Bubble

This is the only one that has not popped yet..

Thomas's picture

The following is a list of chat boarders who have not at one time or another been completely wrong and thus in need of circumspection at times:

 

end of list

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BobPaulson's picture

I guess the big question is if/how the physical and paper gold markets can diverge. If paper gold never requires physical delivery, it's just another fiat currency.

lsbumblebee's picture

Exactly. As long as there are enough investors who are content with a piece of paper that says they own gold then these games will continue.