23/5/17: U.S. Mint Gold Coins Sales 1Q 2017

Updating, with a lag, my data for U.S. Mint sales of gold coins, here is 1Q 2017 in its full glory.

Total sales of U.S. Mint gold coins stood at 221,500 oz in 1Q 2017, down from 363,000 oz in 4Q 2016 and down on 305,500 oz in 1Q 2016. However, 1Q 2017 sales were better than 1Q sales in both 2014 and 2015.

Total number of coins sold by the U.S. Mint stood at 438,000 in 1Q 2017, down on 647,500 in 1Q 2016. In terms of number of coins sold, 1Q 2017 was the slowest of all 1Q periods since 1Q 2012.

Average weight per coin sold was 0.5057 oz/coin, stronger than in 1Q 2016 (0.4718 oz/coin) and stronger than 1Q average coin weight for 2014 and 2015.

Monthly data, plotted alongside historical and period averages shows that more recent months (especially April) posted weak sales performance.

Meanwhile, a look at quarterly aggregates indicates that while 1Q was weaker than 4Q 2016, it is still in line with the generally upward trend that has been present (with some serious volatility) since the end of 2013.

Both, the monthly series and the quarterly aggregates indicate relatively stable and strong negative correlations between the price of gold and the demand for U.S. Mint coinage over the last 6 months within the range of -0.62 and -0.84.

20/2/2014: Gold Demand 2013: US Mint Sales

I recently posted on the 2013 demand for gold:

• http://trueeconomics.blogspot.com/2014/02/1822014-gold-demand-trends-2013.html started with highlights of the World Gold Council report and was followed up with 
• http://trueeconomics.blogspot.com/2014/02/1822014-demand-for-gold-netting-out.html covering demand for gold stripping out changes in ETFs holdings.

To complete this analysis, let's take a look at another area of demand.

Sales of gold coins by the US Mint are usually seen as representing more stable, long-only and non-instrumented demand for gold. US Mint coins are first and foremost used by investors interested in a store of value and secondly as long term savings. These are principally non-speculative in nature and do not rely heavily on shorter term volatility in prices (as some o the statistics discussed below show).

The series covered here include American Eagles and American Buffalos. The data we have for both series goes back to the start of 2006.

We shall focus in this post on annual values.

In 2013,

• US Mint sold 1,095,500 oz of gold in the form of coins, marking the third largest demand in the series history. The demand in terms of total weight was up 29.8% y/y, reversing previous 3 consecutive years of annual declines.
• US Mint sold total of 1,697,500 gold coins in 2013, marking the third highest year of sales by coinage, and up 39.1% y/y.
• Average weight of coin sold in 2013 was 0.645oz/coin, down on 0.692oz/coin in 2012. Overall, this was the third lowest annual average oz/coin sold performance.

Correlation between price and weight of gold sold was 0.349, and between price and coins sold 0.450, while correlation between price of gold and oz/coin average weight was 0.137.

Monthly series confirm that there is little sustained correlation between prices and gold sales via US Mint coins:

Looking at longer-range series:

• Average sales of coins by total weight in 2005-2009 was 874,250 oz per annum, against 1,092,250 oz per annum for 2010-2013 period.
• Average sales of coins by total number in 2005-2009 was 1,174,625 coins per annum, against 1,548,625 coins per annum for 2010-2013 period.
• Average sales of coins by average weight per coin sold in 2005-2009 was 0.705 oz/coin, against 0.703 oz/coin for 2010-2013 period.

In conclusion: US Mint sales of gold coins suggest healthy demand for gold, strengthening in 2013 on foot of both - improved affordability and rebounding in the underlying demand toward the 2010-2013 average levels.