"Unprecedented Demand" - US Mint Sells Nearly As Much Gold On First Day Of 2016 As All Of January 2015

While Chinese residents were lining up in front of banks and currency exchange kiosks, desperate to convert as many of their Yuan into dollars as the government will permit, Americans were likewise busy exchanging their own paper currency, so greatly in demand in China, into gold and silver.

As Reuters reports, American Eagle silver coin sales jumped on Monday after the U.S. Mint said it set the first weekly allocation of 2016 at 4 million ounces, roughly four times the amount rationed in the last five months of 2015, after a surge in demand. It will not be enough.

According to the Mint, more than half of the week's allocation of silver sold on Monday, the first day of 2016 sales, a sign that demand entering 2016 is literally off the charts.

Putting the silver demand in context, the 2.76 million ounces of silver bullion coins sold today is exactly half of the 5.53 million ounces that sold in all of January 2015.

Needless to say, if the demand from the first day of the month continues through the end of January, the first month of 2016 will set an all time record in silver sales.

And gold.

First-day sales of American Eagle gold bullion coins was also unprecedented, with the 60,000 ounces sold equal to roughly 75% of the 81,000 that sold in the entire month of January 2015.

As reported previously, the mint ran out of American Eagle silver coins in July because of a "significant" increase in demand as spot silver prices fell to a six-year low. Inventory was replenished in August and sales resumed. But the coins were on weekly allocations of roughly 1 million ounces for the rest of the year because of low supplies.

This dramatic surge in demand, we noted out at the time, was a shock and a paradox to equity investors and momentum stock chasers, who seek to dump an asset the cheaper it gets, contrary to what has happened with physical metals for the 4th year in a row. It is amazing that at least some investors still act according to the fundamental laws of supply and demand.

It wasn't just the US: the unexpected surge in demand put the global silver-coin market in an unprecedented supply squeeze, forcing other mints around the world to ration sales, while U.S. buyers had to look abroad for supplies.

Should the epic demand for precious metals from the first day of sales persist, we are confident that the Mint will run out of gold and silver within a few days.

Comments

[lakecity55]

It would seem simply that the Money Power is driving the "price" in USD lower via paper, while actual people, who know the historic value of PMs, are ignoring the paper price and acquiring fizz.

[Wow72]

All I can say is WOW?  Silver 15 times the demand of last year and price dropping? Gold more than that?   Its a vote of no confidence in the FED.  Better get some while you still can.

[Kagemusho]

The price manipulation evident in the face of growing demand can only continue for as long as the manipulators remain anonymous. With the Dubai Debacle and the 'lost' gold apparenetly winding up in China, we have a clue.

Perhaps the Chinese are devaluing their present form of the Yuan, driving its value ever lower, prior to pulling a  switcheroo and coming up with a nerw gold-backed one that will supercede the old one, which will become worthless. I wouldn't put it past the Chinese government to do that with it's own population, driving down their standard of living in the short term for a greater gain in the future. Look how ruthless they've been with Yuan short traders.

By doing so they have temporariy gained a breather, but they must also know they can only devalue so far before trashing the BRICS agreements. The EM partners of BRICS are already on the ropes financially because of having to devalue their own currencies thanks to prior Yuan devaluations. And that, of course, has consequences here: a weak Yuan vis-a-vis  a stong dollar is only good as long as Americans buy Chinese goods, and people here are pinching pennies until they scream in agony.

The only way - in thus humble stackers opinion, anyway - that China may be able to get out of this fiat-generated death spiral is if the Yuan becomes stronger via demand for it. And that means soundness through hard monetization. Which may be why China has been on an Au buying frenzy, and engaging in scams like Dubai. Anyone holding the old Yuan may eventually be holding the equivalent of Zimbabwean paper.

[RedDwarf]

What matters if this is sustained and representative increase in demand, not just a bunch of people getting in their 2016 orders at the start of the year.  Wake me up in 3 months and we'll see how it's shaping up.  If demand really has increased 5x to 10x then that is huge, but I'm not convinced yet.

[Johnny_is_alrea...]

"Unprecedented Demand" - US Mint Sells Nearly As Much Gold On First Day Of 2016 As All Of January 2015

Oh is that why the prices are plumeting ?