December 2020 - Week 1 Edition

Silver American Eagle Sales Soar 10-Fold in November 2020 Over November 2019

During November, the U.S. Mint sold 4,805,000 one-ounce Silver American Eagle coins, more than 10 times the 463,000 coins sold in November 2019, bringing the year-to-date totals to almost a 100% gain (29.3 million ounces vs. 14.8 million last year). Gold American Eagle sales were up 673% in November, with 85,000 Troy ounces sold vs. 11,000 in November 2019 that brought the 2020 11-month total up to over 5-fold from 2019 (794,500 Troy ounces in the first 11 months of 2020 vs. 150,000 ounces in 2019). The Buffalo Gold coin sales were also up strongly, +370% for November and +286% for the year-to-date

This powerful sales surge came despite the occasional work stoppages at the U.S. Mint, due to COVID-19 work restrictions and occasional stoppages due to the risks of workers placed in close proximity. There is no telling how many more ounces could have been sold if the Mint were able to operate at 100% capacity. Increases in sales of U.S. Mint bullion products often increase the number of future rare coin buyers. Call us today to discuss this important trend!

Silver is Expected to Reach $30 to $40 in 2021, According to Leading Industry Analysts

Barrons’ Commodities column covered silver in its November 30 column with a title: “Solar Panels, 5G Could Help Boost Silver Prices.” Author Liz Moyer quoted three industry analysts who predicted prices ranging from $30 to $40 in 2021, representing price gains of 32%-76% from silver’s November 30 price.

Goldman Sachs analyst Mikhail Sprogis focused on silver’s role in solar panels, which would expand greatly during a Biden Administration. Solar applications account for 18% of silver’s industrial demand and 10% of total silver demand, according to Sprogis, who set a $30 price target for silver in 2021.

CIBC (the Canadian Imperial Bank of Commerce) predicts silver will reach $32 in 2021, citing the Fed’s low interest rate policies and rising federal debt as “supportive of further significant price appreciation.”

Citigroup analysts maintain a $40 price target on silver over the next 12 months, due to investors seeking safety, plus industrial demand, particularly the robust industrial and private demand in China. Citi also sees 12% growth in 2021 for silver demand in traditional consumer segments like silverware and jewelry.

Gold Gained 2% on Tuesday

Gold gained $36 (2%) on Tuesday, December 1, as a new “stimulus package” works its way through Congress. This came after gold fell by a similar amount last Friday in its first fall under $1,800 since last July. Part of the drop was technical, since many traders set “stop losses” under technical support levels like the 200-day moving average. Since the drop happened on thin volume in the early morning hours of a post-holiday trading session with few traders present, the move was steep, and unsupported by buyers.

Usually, gold bounces back from such a move when traders return from their holiday break, and that is what happened Tuesday morning. The news media always offers some reasons for the price rise, like the stimulus package or an economic statistic or COVID news, but it’s generally just bargain hunting. They don’t usually provide analysis on why gold may have briefly fallen.

Through Monday, for the first 11 months of 2020, gold and silver beat most stock indexes, but the tech-heavy NASDAQ index has maintained its torrid pace, up nearly 36% through November 30. Silver and gold, however, have stayed ahead of the other major stock market indexes for the first 11 months of 2020:

Will Coronavirus Mean “The End of Coins”? (I Think Not!)

The advent of Coronavirus has caused the temporary end of handshakes, big Thanksgiving dinners, open school rooms, large corporate meetings, big football crowds, concerts, night clubs, conventions, most air travel and now some newspaper headlines tell us that coronavirus could spell the end of coins and the cash economy. Every financial transaction will take place online or with credit cards, Pay Pal, crypto-currencies or some new program they claim.

Don’t count on it. Every time I shop and offer cash, a smile comes to the eyes of the vendor, who often saves 2% with a cash purchase, since credit card companies often charge up to 3% for the “convenience” of a credit card. There’s no such thing as a “free lunch” and vendors pay for that plastic transfer of funds.

More importantly, this pandemic will be mostly over someday, probably within a year, and we will go back to normal. I have written about all the new coins being planned for 2021 and the rest of the Roaring 20s to come. I have not seen as much interest in new coins since the State Quarter series. Once we see some new designs on circulating coins, we will see new interest in the general population. Circulating coins will always remain pieces of American history you can hold in your hand, and they will continue to generate interest in older gold and silver coins, too.

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December 2020 - Week 1 Edition