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American Gold and Silver Eagle Coin Sales Show Safe-haven Public Mind Set

Commodities / Gold and Silver 2013 May 07, 2013 - 10:14 AM GMT

By: Michael_J_Kosares

Commodities

This chart on American Gold Eagle Coin Sales illustrates a point I made over the weekend in response to a question from JFT about gold as a deflation hedge. As you can see, the demand for American Gold Eagles, a bellwether for international physical demand, grew significantly in the period 2008 to present — a disinflationary period marked by widespread concern over the health of the financial system and the banks.


Note too that the late 2012, early 2013 period bears some similarity to late 2008, a time when weaknesses in the financial system became all-too apparent to the investing public. The fact that the public jumped on price weakness is only part of the story. Something induced the interest in the first place. That to me is the most meaningful lesson from April’s huge spike in physical gold interest. These concerns are not likely to go away any time soon.

The chart on Silver Eagle sales shows a similar pattern, but illustrates too that the public now views silver as a safe-haven. Poor man’s gold has become the poor man’s systemic risk hedge. Almost completely ignored by the mainstream financial media, physical silver demand is one of the more interesting phenomena to develop in financial markets since the 2008 meltdown. It hints that the concern over the on-going financial crisis extends beyond the 1% to the middle class in general — something aspiring politicians might want to take into consideration. Our volumes at USAGOLD for both the silver Eagle and silver Maple Leaf have been off the charts for over two years running.

It isn’t just inflationary fears pushing these markets, at least not thus far.

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Webnote: You can follow Michael Kosares’ regular commentary at our Breaking News page. We welcome your visits.

Mr. Kosares is the founder of USAGOLD and the author of “The ABCs of Gold Investing: How To Protect And Build Your Wealth With Gold,” now in its third edition.
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By Michael J. Kosares
Michael J. Kosares , founder and president
USAGOLD - Centennial Precious Metals, Denver

Michael Kosares has over 30 years experience in the gold business, and is the author of The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold, and numerous magazine and internet articles and essays. He is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings.

Disclaimer: Opinions expressed in commentary e do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. Centennial Precious Metals, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD - Centennial Precious Metals does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

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