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American Eagle shortage ending?

Gold buyers for most of the past year have interpreted the shortage of American Eagle gold and silver bullion coins as an indication that the prices of precious metals should rise, even when the exchanges, which trade “paper gold,” were declining.

Now there are indications that the American Eagle shortage is ending.

In the prior two weeks, the 14 purchasers authorized to buy the American Eagle coins from the U.S. Mint have not taken the maximum number of coins that are available, leaving the Mint with an extra 39,000 one-ounce gold American Eagles and 185,000 extra silver American Eagles.

These numbers are not large, but the trend is confirmed by Coin Market editor Harry Miller. He reported in his weekly column on the Coin Market at a Glance pages in Numismatic News yesterday that premiums on these coins have returned to the normal levels that prevailed before the shortages began. Indiana dealer Julian Jarvis three weeks ago was the first to point in this direction in an interview for Coin Chat Radio and Numismatic News.

If this is indeed the end of the shortage, will gold buyers interpret this as an indication that gold bullion prices should stay where they are or fall?

I think you know the answer to that question.

Interestingly, “paper gold” has been rising in price in recent days, now over $950 a troy ounce.

Perhaps gold buyers will find in this market a new best friend and market indicator.

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One Response to American Eagle shortage ending?

  1. Mark says:

    I don’t think the amount of American Eagles the mint sells has anything to do with the spot price. During the height of the shortage, gold and silver dropped to their lowest ptices after the March 2008 highs. Now the prices are rising again as the shortage has ended. At least we can rule out manipulation.

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