Over the several years preceding this article, Atlanta Gold & Coin described seeing both bull and bear markets in gold and silver, along with changing attitudes toward precious metals. When silver approached a 21-year high in April of 2011, the original article reported that demand outpaced the silver inventory then on hand. It similarly said gold demand was extremely strong when gold peaked in August of 2011 at $1,900 per ounce. In 2013, the metals reportedly recorded their poorest performance in decades, declining 28% and 36% respectively. Yet physical gold and silver demand was described as nearly insatiable, rising gold and silver eagle sales of 13.75% and 26.47% from the prior year, respectively. At the time of publication, gold was reported up 3% year to date, while silver was down almost 5%. The article set out to consider how prices had influenced coin sales and to offer its then-current view of possible price direction.
When this article was originally published, Coinupdate.com had recently reported mixed gold and silver Eagle sales in 2014. Silver Eagle sales were only modestly below the prior year’s pace, a difference the article suggested might partly reflect a delayed coin release. American Gold Eagle sales, however, were reported down more than 50% from a year earlier. The article characterized that decline as substantial, particularly because gold prices had reportedly risen only 3% that year. Its stated assumption was that investors of gold coins had grown discouraged by stagnant gold prices and might need a catalyst to return to the market. By contrast, it suggested silver-bullion investors may have viewed lower prices as a buying opportunity, since silver was not far above production costs.
From the local Atlanta perspective described at publication, sentiment in the two metals appeared similar. The article reported that many larger gold-coin buyers had lost some conviction and reduced both how often they purchased gold coins and the quantities purchased. It said some had shifted toward silver because they considered it a better buying opportunity, while others seemed satisfied with a neutral position for the moment. On the silver side, the original article reported that demand for 90% silver coins remained relatively strong, with Silver Eagles continuing to lead demand. It suggested this could partly reflect Silver Eagle premiums falling during the prior year from almost $8 per coin back toward their historical average.
At the time of original publication, the article described the following: The article’s view at publication was that gold would probably need a meaningful price move before demand increased. It referred to a previous article that had discussed possible catalysts for a silver breakout, stating that each scenario still appeared feasible at that time. It added India’s recent election as another potential catalyst, saying elected officials appeared more favorable to gold than the preceding regime and could place an end to gold restrictions. The article further speculated that, if India reopened its markets and ended its described oppressive 10% precious-metals import tax, a new flow of gold and silver into India could follow.
The original article also observed that monthly employment reports had historically moved gold and silver markets. On the publication date, it reported that ADP’s May jobs figures had fallen short of expectations. According to this report from Businessinsider.com, 179,000 jobs were created, compared with expectations for 210,000 jobs. It described the ADP release as a customary precursor to the BLS report scheduled for that Friday. The article speculated that an equally disappointing BLS report could lead the Fed to reverse course or at least pause its bond-tapering program. Historically, it said, more accommodative monetary policy had supported gold and silver markets.
In closing, the article said sentiment toward gold and silver seemed weak at the time of publication, but demand for American Silver Eagles was still strong, as were, to a somewhat lesser degree, purchases of 90% silver coins. It also identified numerous potential catalysts that it believed could lift gold and silver prices and draw back people who had remained on the sidelines. Depending on the BLS jobs report due that Friday, the article suggested the metals could spike, which it described as overdue relief for committed precious-metals followers.
