U.S. Mint suspends sales American Eagle gold coins

August 21, 2008 by · Leave a Comment
Filed under: Economic News 

This is an interesting development with what happened last week. Last week we saw a major disconnect in the precious metals markets. The price dropped by double digits in one day but this is the paper market dropping with investors on margin and when the price drops so quickly you can see “margin-calls” that will create forced selling. I called some bullion dealers to ask them if they were see people running in too dump their physical metals in conjunction.

To my surprise two of the largest dealers told me that not only is no one selling their metals but the demand has never been higher and there was a 4-8 week delay on delivery and because they see to market disconnecting that there was a possibility that if the market continues to operate like this that they would suspend sales as well because of a growing lack of confidence in other dealers to be able to make their deliveries as well. What does this announcement mean with the economy heading south and bailouts happening across the board?

Release:

A shortage of American Eagle bullion coins following a recent sharp retreat in gold prices has forced the U.S. Mint to suspend sales of the popular coins temporarily, dealers said on Thursday.

Rand LeShay, senior vice president of A-Mark Precious Metals, an authorized purchaser for the U.S. Mint, confirmed that the Mint told dealers in a memorandum it was halting all sales of American Eagles, a novel item among collectors and investors.

“It is temporarily suspending,” said LeShay. He said he saw no communication about a permanent suspension from the U.S. Mint.

“Until the U.S. Mint can supply us with more (American Eagle) coins, we won’t be able to supply any to our customers,” LeShay said.

Michael White, a spokesman of the U.S. Mint, did not return calls seeking comment.

LeShay said that there was a big spike in demand for gold and silver coins and ingots following a recent tumble of precious metals prices.

BULLION COIN DEMAND SPIKES

Coin dealers from the United States to Canada also reported a surge in buying of bullion coins and other gold products since prices plummeted from highs last month. The buying spree contributed to supply fears and helped boost gold prices sharply on Thursday.

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