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Are Eagle sales sending us a signal?

Silver and gold buyers probably remember the year 2016 as the year of two markets. The first half of the year saw precious metals go up and up. They had racked up huge gains by the beginning of July. Then the price of bullion went down and down, and down some more until the end of the year was reached.


So far in 2017, precious metals look like they are reading from last year’s script. They are rising. Will they continue to rise until July? No one can know for sure.

However, if you are watching sales of gold and silver American Eagle coins, you might scratch your head and begin to wonder.

Sales in February 2017 have been much weaker than January sales numbers. To a degree, a drop is to be expected. January is virtually always stronger than February. Everybody wants to buy the new date. Dealers want to get their supply in house as quickly as they can.

Last year’s one-ounce gold dropped from 89,000 in January to 67,500 in February. In 2017, the monthly drop is more severe.

The story is the same for the silver Eagle. In January 2016, the sales figure was 5,954,500. The February number was 4,782,000.

Watch the final February monthly sales number. It might tell you something. We should become aware of it just as this issue of Numismatic News Express is sent out to readers.

The January 2017 silver sales number also was lower than its 2016 counterpart. It came in at 5,127,500. Close enough, don’t you think?

But if the final figure for February 2017 is much weaker than the February 2016, that might be an indication that bullion coin investors either have better uses for their money this year, or they are squaring away their positions in anticipation of another downturn in the prices of precious metals just as they did last year.

As you might remember, Eagle sales began to fall off sharply in June for silver. It was even earlier for gold. March was the particularly weak month. But in both cases, these drops occurred before there was any sign of weakness given by the market prices of precious metals in July.

At this point, we cannot know whether we are observing statistical noise, but nevertheless, it does not pay to dismiss market signals like this out of hand.

Be conservative. Be ready to ride out a price decline. Make sure your investment in bullion, if prices weaken for a time, does not take your lifestyle down with it.

Markets fluctuate. It is the only thing we can count on from them. The 2017 highs could exceed those from 2016, but they also could be lower. This will not matter if they comprise an appropriate percentage of your assets – 10 percent is the one professionals often mention. It also does not matter if you hold bullion items as a hedge against uncertainty, or you are collecting them. In both instances, your time horizon is far enough distant to make any concern about 2017 prices nothing more than a tempest in a teapot.

This article was originally printed in Numismatic News Express. >> Subscribe today

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