Bullion buyers shifting from gold to silver
HalfDime
Posts: 232 ✭✭✭
Hi everyone, the US Mint has released their 2024 annual report, and in it there is a lot of information on their coin programs. The numismatic sales by revenues were actually up slightly, with more buying the lower priced sets vs the higher prices precious metal products.
But in bullion, they have an interesting change going on. There is now more people buying silver vs. gold. This is from the annual report:
Demand for gold bullion ounces decreased significantly in FY 2024 compared to FY 2023. American Eagle gold
bullion coin ounces sold decreased by 48.6 percent and American Buffalo gold bullion ounces sold decreased by 41.3 percent compared to FY 2023.
Gold bullion total revenue decreased by 40.4 percent to $1,610.8 million, driven by decreases of 43.0 percent
in American Eagle gold bullion revenue and 33.6 percent in American Buffalo gold bullion revenue, respectively,
compared to FY 2023
Silver bullion ounces sold increased by 5,608.0 thousand ounces (27.2 percent) to 26,241.0 thousand ounces in
FY 2024, entirely due to American Eagle silver bullion coin ounces sold.
Higher volumes of silver bullion ounces sold during FY 2024 meant that silver bullion sales revenue increased by 37.2 percent. American Eagle silver revenue increased by $204.1 million.
..........................................................
That is the most interesting part of the mint sales report, it also doesn't truly reflect the drop in demand for higher prices numismatic coins. At some point I still expect the mint to have to change high prices coin programs that will increase demand, and that only means shifting to lower prices items.
Here is a link to the entire mint annual report:
https://usmint.gov/content/dam/usmint/reports/2024-annual-report.pdf
Comments
IMHO the average collector is priced out of gold. Dealers do not have anyone left to sell to. Stacker/investors maybe not so much, and institutional buyers do not have to worry about the price of eggs. But perhaps even institutional buyers are looking at other things now.
Considering how pricy gold is vs Silver not surprised. Many players off bourse seem to prefer silver bullion material vs gold as many priced out, fed up w the holder / sticker game on the gold, etc.
I do a booming biz at shows on silver bullion coins - USA ASE, Mexico Silver Libertads, GBR Britannia. One regular buyer working on a date set of Mexico Silver Libertads. A fantastic numismatic project. She is a very sharp paralegal who has a keen grasp of grading / pricing also. Furthermore many coming in bourse room doing well have even have $300 to spend. We are in tough, uncertain times.
People are fed up with the ridiculous premiums the Mint has placed on gold coins. Of course the one exception last year was the FH coin.
At a roughly 90 to 1 ratio, silver seems to be a smart buy.
This has nothing to do with bullion, which is sold at modest premiums through Authorized Purchasers. THAT is what @HalfDime is talking about.
Numismatic pricing is another discussion altogether. What @HalfDime is noticing is nothing more than people shying away from gold purchases as it continues to make new highs, and as the relationship between gold and silver deviates further from historical norms. Period.
The Mint didn't set the price of an ounce of gold at $2,900. The market did that all by itself.
Unless gold drops. But IMO gold is solid for awhile. And you can(not) take that to the bank. Free advice....your welcome.
These figures are from the mint and the mint puts a ridiculous markup on gold. I don’t think serious gold buyers are making most of their purchases from the mint.
bullion is not sold through the mint's website, it doesn't have those ridiculous markups
Gold, now at record $USD highs around $2900, is just not popular with US investors.
Silver, in its now-typical $20 -$35 price range, seems like a better buy.
And nobody_ wants platinum, which is trading at its largest discount to gold . . . like, ever?
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
The "ridiculous premiums" are on numismatic items not bullion. Bullion premium is only 5%ish
Can you not buy graded generic DEs for about the same markup?
I don't know just spitballing it may contribute to lower demand.
Your title is somewhat misleading.... perhaps should mention US Mint Bullion Buyers? Not sure your info applies to the general public bullion business of gold and silver? But... likely the trend occurring at the US Mint probably does have to do with the premiums charges, and many no longer being able to afford the gold.
You can't really buy physical bullion for much less than the Mint charges through their ADs
There is a LOT of silver out there, but it will always be "The poor man's gold," IMHO.
I did just the opposite this winter (with physical). A couple months ago when gold was about $2600 and silver $32 I unloaded all my silver and bought gold. Had under 500 ozs so it wasn't a huge amount of cash, ended up with under $15k. That bought 5 1/2 ozs of gold and have picked up a couple more ounces this year.
The prices this year make buying a little under melt possible but I'm about tapped out. Hope to end up with 10 ozs later this year.
Has the gold/silver ratio really changed much in 25 or so years?
Yes.
My US Mint Commemorative Medal Set
Silver over gold is a no brainer.
Maybe short term you could make an argument that it isn't.
But if you're a stacker and holding out for the long haul, you'd have to be nuts to choose gold over silver.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
I wonder what percentage of the increase in silver was collectors buying the new Peace & Morgan dollars?
:
0.0017%
.
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
I don't think institutions are buying graded DEs.> @Goldminers said:
No
Are you kidding to be negative?
Look at the graph. 25 years ago, the gold/silver ratio was 56 and the last close on the graph 25 years later, is 90. It had a low of 31.64 and a high of 125.89. Maybe you don't think that "the ratio has really changed much in 25 or so years", but I sure do.
My US Mint Commemorative Medal Set
There's a lot of variance but not any real trend.
You could pretty much draw a straight line across the whole graph at about 60 and you would have no change but a lot of variance
It's quite possible that there is no importance to the ratio and the two commodities are simply moving independently.
People forget that when there was a ratio, it was determined and maintained by governments. Since they allowed the metals to move freely, the ratio has been all over the place.
I just looked it up. The average over the last 50 years is 65.
In my opinion, the gold-so-silver ratio is an historical artifact that too many folks get caught up in when they look at the metals.
In honor of the memory of Cpl. Michael E. Thompson
The last 4 years the average ratio has been in the 80's. That is clearly above the average trends bouncing around in the 60's the prior 25 years.
I am not arguing the ratio is some magic predictor. Obviously, gold is up significantly compared to silver the past couple years, and as a result the ratio has increased.
My US Mint Commemorative Medal Set
Agreed. People have been failing at bimetalism since at least 1792.
It is an artifact. Has no current grounding in the markets
If you are referring to the monetary ratio, even during this time, the ratio between the commodity price fluctuated widely. I've never looked into how easy or difficult it was to buy/sell either at the time, the relative liquidity.
GSR is and has been irrelevant for decades. RGDS!