U.S. Mint Fractional Gold Eagle Bullion Sales Down from 2009

Made available for purchase last Thursday, the 22-karat 2010 American Eagle Gold Bullion Fractional Coins first sales figures have been released by the United States Mint.

310,000 were sold during the first five days amounting to 48,500 ounces of gold. A look at the individual coins sales are shown below:

2010 1/2 oz Gold Eagle 28,000 coins for 14,000 ounces

2010 1/4 oz Gold Eagle 42,000 coins for 10,500 ounces

2010 1/10 oz Gold Eagle 240,000 coins or 24,000 ounces

While these numbers are high, they are lower than the sales in 2009 when the  fractionals were released on Dec. 3, 2009. On that opening day alone, 345,000 were sold totaling 58,000 ounces of gold.

However, as Coin News points out:

....it should be noted that an apple-to-apple comparison is not possible.


First, and foremost, the 2010 fractionals were released under an allocated or rationed process. Buyers are limited in how many they can order.

Second, the U.S. Mint typically strikes and issues gold fractional eagles consistently throughout the year. However, 2009 saw an over-whelming demand which resulted in over 1.3 million one ounce American Gold Eagles sold. Unable to keep up as a result of limited gold coin blanks, the Mint had suspended sales of the fractional Eagles until late in the year.

As a result, they launched into an environment of unprecedented, pent-up demand. In a single day, the Mint declared a sell-out of their entire inventory of the 1/10 ounce sizes with 270,000 sold. It delayed additional sales of the 1/4 ounce and 1/2 ounce varieties until more could be produced. On December 14, 2009, the Mint released the remaining fractionals and declared a sell-out several days later with the 1/2 and 1/4 ounces each at 110,000.

Still, the sales drop should be a reminder that in the short-term gold is in a very tricky market. I suspect much of the gold buying of late has been the result of Europeans, especially the Germans, fleeing the euro. Although, there is no indication at this point that the ECB is printing more euros to support the PIIGS. It appears the ECB is draining funds from the system and thus sterilizing any PIIGS support activities, which mean while this activity is distortive to the euro zone, it is not necessarily inflationary..

In the U.S., new gold buying may be coming from Tea Party followers who are learning about gold through Ron Paul and also Glenn Beck. But here also, at present the Fed is not increasing the money supply (M2).

Thus, while the buying power represented by fearful Germans and newly educated Tea Party followers is formidable, it is not the type of buying that comes when the printing presses are unleashed with unlimited new buying.

Therefore, while I fully expect that at some point the printing presses will be released  inboth the U.S. and the Euro zone, given that such is not occurring at present a short-term violent pullback in gold could occur at anytime. This is no time to sell any long term gold poitions, just be aware that things could get volatile.