Posted on January 30, 2023
The American Eagle Bullion Series at the United States Mint has established a track record over the last decade that was built on raging demand for silver and gold. Over the decade 2012-2022, the American Silver Eagle, in particular, set one sales record after another. The latter half of that decade saw ebbs and flows in demand, with the strong global economy of 2017-2019 dragging demand down, while the economic chaos of the COVID-19 pandemic sent the American Eagle soaring again. Despite the presence of factors that should have buoyed precious metals sales, the US Mint experienced a drop in demand in 2022.
With bullion production for 2022 American Eagles ending at the US Mint in 2022, the sales figures for the full year have come into greater focus through the first month of 2023. Among the major programs, the US Mint saw the following sales figures:
The American Silver Eagle, as well as the American Gold Eagle, saw a surprising drop in demand in 2022. Generally speaking, all the right factors were in place in 2022 for precious metals to shine. As safe-haven assets, gold and silver are typically sought out by investors when economic uncertainty reigns supreme. The war in Ukraine, skyrocketing mortgage interest rates, and record inflation all battered the economy and the confidence of investors in 2022.
Despite these ideal factors for precious metals, the American Silver Eagle sold just under 16 million coins in 2022. This is a drop of 43.5% compared to 2021 when 28.2 million coins were sold. This marked the lowest level for Silver Eagles since 2019. In addition to the drop in demand for silver, the US Mint experienced a significant drop in demand for gold as well. While 980,000 ounces of gold was sold, that marks a 22% drop compared to 2021 when gold sales hit a 12-year high.
As mentioned above, the economic factors were in place for US Mint bullion to shine. In fact, other mints around the world saw jumps in demand in 2022, not drops. One of the top competitors in the industry, Australia’s Perth Mint, saw strong growth in demand for both silver and gold from its popular collections.
While demand for Silver Eagles and Gold Eagles sank in 2022, Perth Mint sold 1.11 million ounces of gold in 2022, representing an increase of 6.3% compared to 2021. Perth Mint also saw a jump in sales for silver, with 23 million ounces of silver sold in 2022. This represents a jump of 21% compared to 2021.
Many experts have pointed to one factor in the US Mint’s drop in demand: quality planchets. Industry experts have pointed to a lack of quality blanks in the US as the reason behind the drop in US Mint sales. With fewer planchets available for coining, the products that were made came with higher premiums for 2022 Eagles when compared to other gold and silver bullion products on the market.
Sales at the US Mint in 2023 will depend on economic factors and the ability of the mint to solve its production and supply issues. If premiums remain high for American Eagles, while other major bullion collections continue to see lower premiums, the US Mint is unlikely to see a change in demand. As of the first month of 2023, several economic factors remain in place that should push investors toward safe-haven assets. The war in Ukraine is grinding toward its one-year anniversary. Inflation remains high, though it has retreated from record levels. Mortgage rates also remain high.
It is worth noting that it has already been announced that no commemorative coins will be issued by the US Mint in 2023. The last so-called “gap” year for commemorative coining at the United States Mint came in 1985. All commemorative coin legislation introduced during the 117th Congress stalled in committees. Even if the 118th Congress reintroduces some or all of these bills, it is unlikely that these coins were hit production with 2023 date marks.
There’s no accounting for how economic factors, supply issues, and production factors could impact 2023 figures as the year plays out. Whether or not the US Mint reverses the declines of 2022 depends on its ability to address the factors that are at least somewhat in its control.