U.S. Mint Suspends Purchase of American Gold Eagles

U.S. Mint Suspends Purchase of American Gold Eagles

ronpaul2008nyc.wordpress.com

One of the biggest indicators of the changing tides was the announcement from US Mint on September 13th, 2007 that they would be suspending the purchase of 2007 Gold American Eagles.

(visit the link for the full news article)


Related News Links:
www.coinnews.net
www.numismaticnews.net
catalog.usmint.gov
catalog.usmint.gov

I became aware of this situation yesterday, and now it's beginning to make the rounds of the chat-boards. What's kinda interesting about this news is that it was never broken in a press release (which could ignite buying)...the U.S. Mint simply suspended sales, and posted the unavailablity on their price index.

Now the C-Theory. US gold reserves haven't been audited in more than 40 years, and demand for bullion is on the increase. So...could the U.S. Mint be encountering a temporary supply shortage?

If it's a matter of repricing due to escallating Gold prices, wouldn't they suspend & reprice all Gold coins? Why are some Proof Gold Eagles, and Gold Buffalo's still available...while all classes of Brilliant Uncirculated Gold Eagles, by far the most popular & highly traded, are unavailable? Probably just because they're the U.S. Gubmnt...dosen't have to make sense. Something else to watch though.

While I was on the U.S. Mint website, I also checked for the availability of U.S. Silver Eagles...only to find that they are currently unavailable also?



ronpaul2008nyc.wordpress.com
(visit the link for the full news article)

This will be good news for the coin collectors, I bet their collections will increase in prices very nicely.

There is mass marketing going on with these coins in magazines.

Mostly getting around $60 for 1/10 of an oz, or the $5 coin
instead of the $50 coin.

Well, supposedly BU Eagles should be back on the shelves by the 27th Marg...I'll be watching. Seems like everything Gold related is shifting in predicable form. Last Wednesday, the New York Mercantile Exchange provided some breathing room for the short-side by increasing margins on Gold contracts. Old-time longs are saying that they never see margins boosted in down-markets, only in up-markets. No one's very surprised.

I'll also be watching the CNBC Gold ticker on Tuesday when Benny & the Fed issue their FOMC report. Typically, whenever the Fed goes prime-time to talk-up the economy, and reassure us that inflation is under control...Gold takes a shellacking just to prove their point.

Yeah, Eagles are popular TeslaandLyne...especially BU for investors, but if coin traders were to sniff-out that the U.S. Mint is experiencing supply disruptions...it's reasonable to assume that prices would go

Thought I would update. For whatever reason, Brilliant Uncirculated American Gold Eagles, and Uncirculated Silver Eagles are still unavailable from the US mint. They hoped to have them "repriced" and on the shelves by Sept. 27th...running a little late. Sales have been suspended for 3 wks now.

?

This makes me wonder. What if the U.S. gov't ran flat out of gold? What would happen? I know that gold isn't used to back up currency any more, but would there be any other financial ramifications of there just not being any gold in Federal coffers any more?


[edit on 4-10-2007 by uberarcanist]

I'm a wondering if the U.S. Mint has cut back on employees due to the government running under a continuing resolution instead of a budget. Years ago, I saw Clinton shut the Government down for a couple of days. I was considered essential so I worked anyway, but many clerk types and paper pushers were off work.

Just something to consider.

Originally posted by uberarcanist
This makes me wonder. What if the U.S. gov't ran flat out of gold? What would happen? I know that gold isn't used to back up currency any more, but would there be any other financial ramifications of there just not being any gold in Federal coffers any more?

I agree with this. The U.S. Gov't has run flat out of gold. But don't worry there is PLENTY of gold in the Federal coffers, you do not have to worry about that!




[edit on 4-10-2007 by Techsnow]

Well uberC, the actual US Gold supply, along with the world Gold supply, is shrouded in mystery & speculation. That the Gold market is heavily manipulated, has pretty well been established and accepted as fact. The Gold Anti-Trust Action Committee, GATA by acronym, has been a leader in these investigations.

The crux of the manipulation and supply theory was explained in this missive yesterday regarding Citigroup's recent statement:

Gold undoubtedly faced headwinds this year from resurgent central bank selling, which was clearly timed to cap the price of gold.

Basically, the contention from the Gold community is that world central banks act in collusion with the bullion banks, Goldman Sachs for example, to depress the price of Gold through Gold 'swaps', or leases. In a nut-shell, a bullion bank borrows X number of ounces of Gold from a central bank at a low rate of interest (1%), and then dumps that Gold on the spot market to effectively lower, or control the price. The bullion bank then places the proceeds of that sale on deposit, or invests it in US Treasury bonds for a higher rate of return, say 5%. The transaction gets a bit more complex because it involves futures hedging...but suffice it to say that it results in a net profit for the bullion bank, and serves to cap the price of Gold.

Here's the rub with regard to actual above-ground vault stores. Evidently, when the central banks make these Gold swaps, or leases, they have been keeping the ounces on their books, because the transactions are not technically sales...even though that Gold goes into the market where it gets further refined and turned into jewlery, 1oz bars, or whatever...never to return. The majority of these transactions are eventually settled in cash. Central bank Gold leasing has been taking place in this manner for about 15yrs.

If we combine official recorded central bank Gold sales, with Gold leases, GATA and others speculate that actual above ground storage would amount to a little more than half of the official reported amount.

If true, the supply/demand ratio would likely send Gold into the stratosphere.

I'm just guessing, but probably the demand was higher than expected and they need to mint more. Unless this is a pattern seen in other precious metal coins such as the krugerrand or maple leaf, I don't really see any conspiracy here.

Originally posted by djohnsto77
I'm just guessing, but probably the demand was higher than expected and they need to mint more. Unless this is a pattern seen in other precious metal coins such as the krugerrand or maple leaf, I don't really see any conspiracy here.

Yeah djohnS, in the face of rocking prices, I wouldn't doubt increased demand...and increased demand can strain supply. However, the Mint chose to focus on the need to reprice to market value...rather than the supply/demand component:

"Due to the increasing market value of gold, the American Eagle Gold Uncirculated Coins are temporarily unavailable while pricing for this option can be adjusted; therefore, no orders can be taken at this time. We expect products to be available with adjusted pricing on or after September 27, 2007."

May be nothing more than what they say, but if the issue is related in any way to supply deficits, they'll need to keep that on the QT until production and sales resume. What I found interesting is that they continue to sell some Gold 'proof' coins, including Buffalo's. I guess the mark-up on 'proof's' must be high enough to accomodate Gold in it's current price channel. You would assume that the US Mint would have sophisticated pricing models...three weeks, and not repriced yet?

Since the US Mint doesn't produce Krugs, or Maples, any direct CT would center on US supply...from what I read, it appears there could be some issues coming-up. Wonky stuff going-on with Gold lately

There goes another one
10/11/2007

Look at that. The proof gold American Eagle sales have been suspended on the Mint Web site. Proof platinum American Eagles remain on sale as do the silver American Eagles.
Link

Sales of proof Gold Eagles, go the way of brilliant uncirculated Gold Eagles...suspended for repricing. If you visit the link, there are a few additional comments in the missive titled: Is $100 the tripwire?

Did The U.S. Mint Run Out Of Gold?

....What's the real story? If it really takes over a month to make a pricing decision, perhaps there are bigger problems at the Mint. Link

Well, if they did experience a supply disruption, they got it straightened-out. The Mint is back online with one ounce BU Gold Eagles priced at $831.95...an $80 dollar increase.

I'm still a bit suspicious.

I'd like to close by passing-along an interesting little "rumor" from Bill Murphy's Le Metropole Cafe...and thank those that participated here for sharing your thoughts.

"Bill:

I'll make this as brief as possible as it's completely unverified.

Last month, while playing a little Black Jack on a cruise ship in the Caribbean, the gentleman next to me started talking about his company, the economy and his concerns about staying invested in the stock market. As we discussed various markets I mentioned gold and gave him the Gata gold pitch, at one point mentioning that that there was probably no gold at all in Ft. Knox. At this point, he began telling me that his son had worked at Fort Knox for 5 years during the late 90's and knew for a fact that there was no gold there. Apparently, his son would call him on occasion and lament to him about what a scam the place was, how there was no gold and that all the truck movement was painted bricks being shuffled around to give the appearance that it was still there. What he did say was there was a number of nuclear weapons.

I have no idea if this is true and I never saw the gentleman again. He seemed sincere so I thought I would pass it along."

The Ghost of Fort Knox Past: Part 6

By Dr. Russell McDougal

It’s time to wrap up this series of articles … at least for now. Truth be told, we’ve barely scratched the surface regarding the supposed contents of Ft. Knox. A book is waiting to be written. The interest in the subject is clearly huge. Link

The final chapter. Fun article.

By the way, after just coming back on line, sales of BU GAE's have been suspended by the US Mint again.


Part 1

Part 2

Part 3

Part 4

Part 5