June isn’t over yet. Though, looking at this year’s US Silver Eagle Sales by the US Mint, 2013 stands out as the best first half year ever. The table shows the sales figures for both gold and silver coins since 2008. For every year, the figures include 6 full months (one exception: 2013 represents only 5 and a half months).
While comparing the Silver Eagle figures of the last 5 years with the first 5.5 month figures of this year, we see the following picture:
- First 6 months of 2013 equal 119% of total 2008 US Mint sales of Silver Eagles
- First 6 months of 2013 equal 81% of total 2009 US Mint sales of Silver Eagles
- First 6 months of 2013 equal 67% of total 2010 US Mint sales of Silver Eagles
- First 6 months of 2013 equal 57% of total 2011 US Mint sales of Silver Eagles
- First 6 months of 2013 equal 73% of total 2012 US Mint sales of Silver Eagles
The point is very simple: US Silver Eagles are in very high demand, whether looking at yearly of half yearly sales figures, or comparing it with the Gold Eagle sales.
Moreover, the ratio for the first half year stands at roughly 40, which means that 40 times more ounces of silver coins have been bought by the US Mint than gold coins. When calculating the dollar value of this (with an average price of 1550 for gold and 28 for silver), it appears that the silver value accounts for 71% of the total gold value. Those are revealing figures, for sure because this takes place in the midst of a severe price decline and extremely pessimistic public sentiment vis-à-vis the grey metal (see chart below, courtesy Sentimentrader.com).
The most plausible explanation for this trend is that people (in this case retail investors) realize the dangers and severity of the ongoing crisis, and seek some form of “safety” (whatever that means in a centrally managed economy). Silver being “poor man’s gold” is more affordable to the retail public. The ironic fact is that prices have been declining, and that they could still go lower. At the same time, the monetary protection from the metal(s) has never been more required. We should start accepting that such a disconnect is part of “the new normal” we are living in.
One remark: we have explained in the past that a higher demand does not necessarily translate into higher prices, at least not directly or in the short run. Readers should think of all the gold and silver in the world as one big pool, where the metal is simply changing hands.