U.S. mint suspends gold coin sales

[Kat Kanning]

Is this something that happens once in a while, or something new?


http://www.gata.org/node/6489
U.S. mint suspends gold coin sales; futures price is a fiction
Submitted by cpowell on Fri, 2008-08-15 04:27. Section: Daily Dispatches

12:25a ET Friday, August 15, 2008

Dear Friend of GATA and Gold:

The U.S. Mint has suspended sales of American eagle gold coins and is refusing orders from dealers, two coin and bullion dealers confirmed Thursday.

The mint's suspension of gold coin sales follows its tight rationing of sales of silver eagle coins, begun in May, when sales to the public were terminated and sales to the mint's 13 authorized dealers were tightly limited.

Word of the mint's suspension of gold coin sales came from the American Precious Metals Exchange in Edmond, Oklahoma, (http://apmexdealer.blogspot.com/2008/08/news-alert-us-mint-suspends-sale...) and from Centennial Precious Metals in Denver, Colorado.

The suspension is overwhelming evidence that the futures contract price of gold on the commodities exchanges is substantially below the physical market price and that, indeed, the commodities exchanges are being used as GATA long has maintained -- as part of a massive scheme of manipulation of the precious metals, currency, and bond markets.

Michael Kosares, proprietor of Centennial Precious Metals and host of its Internet bulletin board, the USAGold Forum (http://www.usagold.com/cpmforum/), explained Thursday:

"The U.S. Mint buys direct from the refiners, and this suspension of gold eagle sales may be an indication that the supply line is already backing up, or that the mint expects that it will back up for the rest of the year. I wonder who would give up physical metal at these prices and under these circumstances except distressed sellers. The central banks are in a hunker-down mode as far as I can determine, and it's the mines that supply the refiners. So if the mint, which buys from the refiners, is having a difficult time locating metal, what does that tell you? I keep saying that we may get a surprising rubber-band effect later in the year when the pre-holiday/festival season kicks off in September/October. It may happen sooner. One of our indicators of approaching a bottom in gold is how many calls Centennial Precious Metals gets from our U.S.-based Indian clientele. Here's a quote from my office's report to me at the end of the day today: 'Today was a good day. ... There must have been an Indian convention where someone was handing out USAGold business cards.' That may give you a clue as to thinking in India proper and probably the rest of the Asian rim."

That is, through their agents the bullion banks the Western central banks, desperate to prop up a corrupt and totteringt financial system, have put gold so much on sale that even the U.S. Mint can't find any now. The price reported from the commodities markets is a fiction -- a scary one, perhaps, but a fiction no less.

You can strike a blow at the market riggers who are defrauding the world -- just buy a little real metal. The dealers listed at the bottom right of this dispatch will be glad to help you do it.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

[Raineyrocks]

I don't know but this certainly seems strange.

[bigmike]

yeah, this can't be good but it doesn't surprise me.

i knew last year when the secret service stole the liberty dollars in idaho that the next to come would be a clamping down on coins of value.

anyone know what's happening with the law-suit to get those liberty dollars back? i know a regional currency officer in north carolina who, i believe, is part of that suit but have not been in contact with him.

maybe i'll try to track him down and make a separate post.

[error]

Apparently the recent sudden drop in the price of gold and silver is the result of market manipulation. Prices don't go down in a free market when supply is dwindling and demand is high. It won't last, so you should buy all you can as soon as you can.

[TackleTheWorld]

anyone know what's happening with the law-suit to get those liberty dollars back? i know a regional currency officer in north carolina who, i believe, is part of that suit but have not been in contact with him.

maybe i'll try to track him down and make a separate post.

You asked for it bigmike
Bernard von NotHaus is no the most succinct or humble author.

[bigmike]

thanx lauren.

yeah, i've heard he's a little arrogant but i've never talked with the guy personally.

i think LD is going out of business as bernard retires.

[SamIam]

If you want to really understand in depth what is happening to gold and silver prices, Here's a great article:

http://www.investmentrarities.com/08-18-08.html

It's very lengthy, and has a lot of technical trading terms that may sound foreign (Naked Shorts, options, etc). Basically it looks like the brokerages have waited for the slow period in off hours trading (8pm est), flooded the market with silver options at $1.50 below market, that triggered an electronic sell off in the futures market, people had naked positions on borrowed money, that generated margin calls, which had a snowball effect. Once prices dropped they were able to buy back way more than the 100M-Oz. of silver they sold in the weeks before.

Currently most mints are out of silver, Ebay silver bullion is selling way over spot, and there has been no drop in demand. The market is being manipulated, and the article explains this in detail. Those of you that can read it all, enjoy.

Sam

[error]

Someone else actually sent me the same article. I have to concur with his analysis. Buy Now.

[Friday]

Is this something that happens once in a while, or something new?

No one actually answered Kat's question.  Does anyone know?

[FreelanceFreedomFighter]

The U.S. Mint stops sales of precious metal coins from time to time based on availability, spot price, market fluctuations and a number of other factors, but usually it is because they simply run out and don't mint any more for that year. They generally (at least for the past 15-18 years have honored anyone who's signed up for a "subscription" to collect certain coins. While the price of ASEs (American Silver Eagles) was up last minting for subscriptions, the orders were still filled. Currently, you can purchase uncirculated ASEs, but they're priced at nearly double spot. Because of the low spot price of silver right now, it simply isn't worth selling the Proof ASEs, so they haven't reminted any. They didn't "discontinue" selling them, they simply sold out of what they had minted for this year (at 2.5X current spot price of silver) and haven't minted any more. This actually happens on a somewhat regular basis. The mint doesn't just keep minting these precious metal collectors/bullion coins. They take the previous years amount purchased by dealers and collectors, along with the non-dealer and non-subscription sales they make online and decide how many to mint for the next year. Depending on various circumstances, they may mint more. People have gotten used to that happening and gotten to expect it, but the fact is that it is at the discretion of the mint and they don't always mint more.

On Gold, the same thing has happened. The mint fulfilled it's initial sales obligations to dealers and subscribers both of the last two years and then didn't mint anymore, causing people to get upset because the mint "suspended sales". Only twice did the mint actually "suspend sales" for gold when they still had stock of the coins and that was when the spot price was going up faster than they could mint the coins. Even on those occasions, they still filled the outstanding dealer and subscription orders only "suspending" online sales. In the end, the mint settled on a rather high price for those collectors coins like the AGEs (American Gold Eagles) and Buffalos. (The difference is that the AGEs are 22kt, the Buffalos are 24kt, but both oz coins contain a full oz of gold.) 

Currently, you can purchase 1oz Buffalos from the mint for $1,118.88... only available uncirculated, not proof. And you can purchase 1oz AGEs for $1,199.95 for proof, $1,119.95 for uncirculated. Right now (8/25/08 AM) the spot price for gold is $820.50. Soooooo, the mint is selling for ~36-46% premium over spot. If YOU want to pay that kind of premium, fine. Not me.

Ebay has a similar problem. People saw how much others were getting for their gold and silver bullion coins just 6-12 months ago and even though spot price is down, folks selling on ebay are either pricing their coins at the old, higher spot price (asking $900-1000+ easily) OR the bidding is going way up (again $950-$1100+ commonly). There are some other factors, such as date, condition (proof/uncirc/graded/ungraded/etc) that cause the price to be up or down compared to other coins.

Fundamentally, if you're just looking for bullion grade gold, then Ebay and the US mint aren't where you should be going right now. They're both very high compared to spot price. If you're looking for collector's grade coins, then the US mint, a reputable dealer, OR (if you know what you're doing... caveat emptor...) Ebay may be the place to go.

What I purchase for bullion, I purchase from a reputable dealer who hasn't had any problems getting me gold or silver at the normal dealer's premium over spot prices. Check around, things aren't so dire... yet. As more and more people realize that these commodities, just like petroleum, are finite, then the prices are certain to climb again. However, (fortunately for us) the general population is seeing the dollar get a little firmer, prices come down at the pump a little bit, and the spot prices of gold and silver drop quite a bit... lulling them back into their complacency just like the power brokers want them. Thus, giving the REST of us some more time to put back a few more ounces of gold and a few more rolls of silver. 

Take care...

[FreelanceFreedomFighter]

Just an FYI...

These folks are getting around 8% premium over current spot for gold... (~$885/oz-coin vs spot of ~$821... cheaper for non-American coins) and ~25% premium for silver (~$17/oz-coin vs spot of ~$13.50). I don't recall what they charge for shipping, but I think they work with you if you buy over a certain amount. These prices are based on last friday's spot (hasn't moved much), but call if you want current pricing.

http://www.goldline.com/precious-metals/coin-prices.html

[Friday]

Thanks for the info, triple-F

[Friday]

So, um, the stock market lost 3 percent today, and the price of gold dropped several more dollars.  Very confused.      Is this caused by more of the same market manipulation of two weeks ago, or something new?

random aside: aren't Chinese Pandas cute?   

[Ron Helwig]

So, um, the stock market lost 3 percent today, and the price of gold dropped several more dollars.  Very confused.      Is this caused by more of the same market manipulation of two weeks ago, or something new?

There's a couple of thoughts I have:

1) yep, more market manipulation by the bastards.

2) demand is dropping as the market goes to crap. People with no FRNs can't use them to buy real money.

I just watched a short interview of an "expert" saying he believes the housing market could drop worse than in the great depression. That leads to less consumer spending, since a lot of consumer spending is tied to housing via home equity loans.

Also, I've heard that the boom in China might be slowing down a bit.

I'm more prone to believe #2, which may be indicating that now or soon is a good time to buy. (Unless we are actually going in to a deflationary depression, in which case that's the last thing you want to do)

[margomaps]

FYI, sales were resumed a week or two ago.  According to the US Mint, they were suspended because of overwhelming demand.  The demand was due to the sharp decrease in prices last month.  The price decreases last month were due to...well, the article doesn't go into that. 

http://www.reuters.com/article/businessNews/idUSN2539668920080825