Metals Market Report Archive

The Mike Fuljenz Metals Market Report

November 2014, Week 1 Edition

U.S. Mint Reports a Dramatic Rise in American Eagle Sales in October

The U.S. Mint sold more ounces of American Eagle gold coins in October than September, and both months topped August by a great deal. Despite gold’s price decline during October, that month marked the highest monthly sales for gold Eagles since January. October Gold Eagle sales reached 67,500 ounces, eclipsing the 58,000 ounces in September. Only 25,000 ounces were sold in August and 30,000 in July. Prior to September, the 7-month average was only 32,800 ounces; October more than doubled that figure.

Sales of American Eagle silver coins in October were even more dramatic, reaching 5.79 million ounces, the most sold in 21 months (since the record 7.5 million ounces sold in January, 2013) and 40% higher than September’s 4.14 million ounces. Expect premiums to continue to rise as demand for silver bullion coins rise globally and availability diminishes.

The Eagle That Landed At The Mint

In one form or another, the bald eagle has appeared on U.S. coinage since 1794, reminding Americans that this majestic bird serves as an official national symbol of their country’s power and prestige. It gained that recognition in 1782, while the fledgling republic was governed under the Articles of Confederation.

Some U.S. coins portray eagles in repose; these include the Walking Liberty half dollar and the Peace dollar. Others depict them in heraldic form, as on the Kennedy half dollar and the Barber half dollar and quarter. Perhaps the most stunning, however, are those that show them in full flight, such as the Saint-Gaudens $20 gold piece and the Standing Liberty quarter.

One particular eagle occupies a niche that’s intriguing and unique in the annals of U.S. coinage. He even had a name – and why not, since he was the real thing, not just an image engraved on a piece of metal.

His name was Peter, and he’s said to have made his home for more than half a decade at the Philadelphia Mint in the early to mid-19th century.

There’s little doubt that Peter existed. His stuffed body is on display at the current Philly mint, where it has been a popular attraction for decades for the building’s many visitors. But serious questions surround the circumstances of his tenancy while he was alive – especially just which years he resided at the nation’s mother mint.

A U.S. Mint website for children states that “Peter, the original Mint Eagle” lived from 1830 to 1836 “at the first Philadelphia Mint.”

This appears to be at least partly inaccurate, since the first Philadelphia Mint, affectionately known as “Ye Olde Mint,” ceased operations in January 1833, when the much larger Second Philadelphia Mint began producing coins. And given the cramped quarters at the original mint, plus the fact that it was spread among several small buildings, it wouldn’t seem conducive to hosting a resident eagle – however friendly the bird might have been.

According to the Mint website, “The real Peter used to live up near the roof of the building. People would see him go out during the day to hunt for food and come home at night to sleep.” Given this, it seems far more likely that Peter’s adopted home was the Second Philadelphia Mint, a spacious edifice made of marble which resembled an ancient Greek temple, with large, graceful columns in the front and rear.

In 1972 while still in my teens, I wrote a short article about Peter the Eagle for the Southwest Louisiana Coin Club Newsletter, and in it I concluded that he was a resident of the mint for a period of six years in the late 1840s and early 1850s.

“Where he came from or why he chose the pressroom in the mint as his home can only be conjectured,” I wrote, “but he did receive special consideration from the mint employees and was permitted to come and go as he pleased.”

There seems to have been a pattern to Peter’s comings and goings. He was released each morning, according to most accounts; spent the day foraging for food, then returned to the mint each evening.

During these outings, he was a common sight in the skies over Philadelphia, which was then a small community by 21st-century standards – even though it ranked among the three or four most populous cities in the nation at the time. U.S. Census figures show that “The City of Brotherly Love” had a population of 80,482 in 1830 and 121,376 in 1850. And since the countryside was largely undeveloped not far beyond the city limits, wild creatures could frequently be spotted even in the heart of the urban center.

The exact dates of Peter’s years at the mint hold significance for numismatic scholars, for he has been credited – rightly or wrongly – with inspiring some important U.S. coins. Perhaps the most significant of these is the beautiful Gobrecht dollar, a coin designed by Mint Engraver Christian Gobrecht and first produced in 1836. Peter supposedly served as the model for the eagle on this much-acclaimed coin – but logically, that would be possible only if he was known at the mint in 1836 or before. Modern Mint officials might well have had this tale in mind when they approved the dates listed on their website.

Peter is also said to have inspired the eagle on the Flying Eagle cent, which was issued in only two years, 1857 and 1858. This could have been the case if his stay at the mint occurred during the period I cited in my article for the Southwest Louisiana Coin Club – of which, by the way, I was president at the time. Then again, some researchers maintain that the eagle on the cent was based upon the bird on the Gobrecht dollar.

By all accounts, Peter was remarkably tame by eagle standards. He was given access to much of the mint’s work area, including the coining facilities, and frequently alighted on the coin presses themselves.

Sadly, this propensity ultimately led to his demise. One day, while he was perched on the flywheel of a coining press, the operator – not realizing Peter was there – activated the equipment and the regal bird’s wing got caught in the fast-spinning wheel. The wing was broken, and Peter died soon afterward.

The grieving mint employees took up a collection to hire a skilled taxidermist to stuff the bird’s body. It has been viewed by visitors to the second, third and fourth Philadelphia mints since going on display well over a century ago. As for Peter himself, he has become the stuff of legends.

A More Important November Election (for Gold Investors)

On Sunday, November 30, Swiss voters will probably pass at least one of three measures requiring the Swiss National Bank (SNB) to actively enter the gold market. One measure requires them to hold at least 20% of their assets in gold (their current holdings amount to about 7%). The other two measures would require the SNB to repatriate all Swiss gold held overseas, and to never sell their mandated gold holdings!

Speculators might pour into gold if all three measures pass, but the SNB won’t likely enter the gold market right away. They will be allowed five years to meet the 20% gold-backing requirement, and they will probably procrastinate (or refuse to act) for the first year, waiting for a lower price. They will likely buy gold in small lots, so as not to impact the price of gold, pushing their future purchase price higher.

Overall, they would need to add about 48 million ounces, which is about 60% of annual mine production. Currently, Swiss polls tell us the vote will be narrow. Gold could suffer another dip if none of these three measures pass. Swiss politicians, of course, are outspoken in their opposition to these measures. Imagine telling a politician they have “no right to sell gold.” That’s a red flag, even to a gold-friendly politician.

At the New Orleans Investment Conference, my friend Gary Alexander hosted a closing panel with Marc Faber, Porter Stansberry and Alan Greenspan, in which Faber said he didn’t care if the gold vote passed or not. He said that many people have asked him to write articles favoring the Swiss gold resolutions, but he has turned them down. He explained why: “The referendum calls for 20% gold backing. If it were a 100% backing, I would endorse it, but 20% is neither here nor there. I think we should all become our own central bank. Each one of us can put 10% or 20% of our portfolio into gold right now. We don’t need a central bank to back a currency with 20% gold. We should each hold our own gold reserves.”


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