U.S. Mint sells 412K ounces of gold coins in Q1; best start to the year since 1999

The gold price continues to struggle to find momentum but investors are taking advantage of lower prices to load up on the physical metal as the U.S. Mint sees its best start to the year and the best quarterly sales in more than 20 years.

Sales data compiled by the U.S. mint shows that 412,000 ounces in various denominations of American Eagle Gold bullion coins were sold in the first quarter of 2021, up more than 88% from the first quarter of 2020.

This is the largest sales pace for the mint since the third quarter of 1999.

The strong quarterly numbers were supported by hefty sales in January and February. The data shows that the mint sold 66,000 ounces of gold in March, down more than 47% compared to February.

The latest mint data is in line with what Ronald-Peter Stoeferle, fund management at Incrementum AG, said he saw in the precious metals market. In a recent interview with Kitco News, Stoeferle said that investors are trying to protect themselves against the rising threat of inflation.

He noted that in February, Comex delivered 113 tonnes of physical gold to investors, which is about five times the historical average.

“In a world of uncertainty, investors are eager to get their hands on physical gold,” he said. “This rise in physical demand will provide important support for gold’s long-term bull market.”

Phillip Streible, market strategist at Blue Line Futures, said that while the headline sales number is surprising, it is not unexpected as there is a lot of pent-up demand for physical gold.

“Gold at $2,000 an ounce was a little overstretched for investors interested in bullion, but a 10% drop from the highs has created a new entry point for investors,” he said. “Gold is a lot cheaper compared to other overvalued assets. Physical gold has also proven its validity over the years.”

Silver bullion demand also saw a strong start to the year as the U.S. Mint sold 12.05 million one-ounce American Eagle silver bullion coins. Silver coin demand is up 20% compared to the first quarter of 2020.

Silver sales saw their best start to the year since 2016, when the U.S. mint sold more than 14 million ounces in the first three months of the year.