Silver beats gold in the three-legged race

It is no secret that demand for U.S. bullion coins has been weak this year.

Monitoring sales is a bit like watching a three-legged race at a picnic. The marvel sometimes is that anybody finishes.

However, it can be pointed out that the October results improved over the very weak September numbers.

Sales of silver American Eagles more than tripled September’s 320,000. October came in at 1,040,000 pieces.

As weak as this is, it is still better than four other months of 2017.

The improvement in monthly gold sales was not as strong.

Total ounces of gold sold rose from 11,500 in September to 15,500 in October.

Interestingly, this also is better than the results of four other months in 2017.

This figure is divided among the four sizes of bullion Eagle coins.

For just the one-ounce gold eagle coin, sales rose in October to 11,000 pieces from 8,000 in September.

With two months left to go in 2017, it is hard to see how this year’s results can come anywhere near those of 2016.

In the race to be less negative, silver Eagle sales are doing better than gold.

The total of coins sold in the first 10 months of 2017 equals 44.9 percent of the number of coins sold in all of 2016.

So far this year, buyers have taken 16,938,500 one-ounce silver pieces. In 2016, they took 37,701,500 over the 12-month span.

But gold demand is only half as strong as silver demand, which is a small consolation to silver fans.

This year, buyers have taken only 25.1 percent as much gold Eagles as they did in 2016.

That is very weak, especially considering that this is an up year for the price of the precious yellow metal.

If it is inconceivable that silver can more than double the number of coins sold in the remaining two months of the year, what do we call gold’s need to quadruple sales?

Since neither silver nor gold can make up enough lost ground, the next two months will be a period during which pundits like me scratch their heads and try to figure out why this happened.

It could simply be that bullion investors have more confidence in other assets this year and are diverting their funds towards the stock market, or Bitcoin, or even simply spending more on themselves.

Bullion is used as a hedge against inflation and other forms of financial disaster. If investors feel that disaster is further away, it is logical that they cut back their purchases of gold and silver.

Coin collectors will be pleased that silver Eagle sales are holding up better than gold Eagle sales. They still like silver better than gold. But that is the collector talking rather than the investor.

Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper "Numismatic News."

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