Metals Market Report Archive

The Mike Fuljenz Metals Market Report

March 2021 - Week 1 Edition

American Eagle Gold & Silver Bullion Coin Sales Continue to Soar in 2021

American Eagle Gold coin sales are up a phenomenal 416% in the first two months of 2021 vs. the same two months in 2020, while American Eagle Silver coin sales are up a respectable 77% in the same two months. In addition, the American Buffalo Gold bullion coins were up by a robust 252% so far in 2021.

February was by far a more powerful month for U.S. Mint sales than January, which is traditionally the more popular month for buying newly-dated coins for the new year. This shows a new wave of investment demand beginning in February, unlike February of last year, when demand was very low.

This is true in our business, too. We are getting calls from people we haven’t heard from in a long time. We are not calling them. They are calling us. We have also heard of at least two major new buyers in the rare coin market wanting to spend $20 million or more on coins, many valued at $50,000 to $1,000,000 each.

As we know from many years of past experience, the more investors entering the bullion coin market, the more we see those investors graduate to become new rare coin investors within a year or two.  So, February’s wave of new bullion investors may graduate to being rare coin investors sometime next year.

Two-Month Statistical Review for 2021

Most commodities have soared during the first two months of 2021 as the global economy revives from the depression caused by COVID-19 in the middle of last year. The three main commodity indexes are up by an average 11.7% in February alone, and they are up 15.8% during the first two months of 2021:

 

Some of the commodities growing the fastest, so far, this year are involved in making batteries for electric vehicles: cobalt (+60.9%) and lithium (+51.6%). Due to Biden’s “green energy” push, crude oil (+26.8%) and gasoline (+32.5%) are also up about twice the rate of the CRB index, which they dominate.

It’s no secret that gold is lagging the commodity parade this year – after leading all commodities last year.  Why is gold down? Many are saying Bitcoin is the “new gold,” but Bitcoin fell about 15% in the last four days of February before recovering some on Monday, so that theory doesn’t hold much water. Bitcoin fell when the new Treasury Secretary Janet Yellen fired a warning shot, telling CNBC’s Andrew Ross Sorkin at a New York Times conference, “To the extent it is used, I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions.” That could be a warning about future Bitcoin regulation.

Basically, gold is in a holding pattern until inflation returns, but silver has been strong, returning to its historic 65-to-1 gold/silver ratio after flirting with twice that ratio last year. On March 19, 2020, at the peak of the COVID-19 panic, silver was $12, and gold was $1,475 for a 123-1 ratio. Now, on early Monday afternoon March 1, gold is $1,750 and silver is $26.65 for a 65-1 ratio, in line with recent historical ratios.

 

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