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Market News U.S. Mint Gold Sales Boom in May as Market Anxiety Rise
U.S. Mint Gold Sales Boom in May as Market Anxiety Rise
The U.S. Mint sold 147,000 ounces of American Eagle gold coins of various denominations in May, the best May performance since 2010, in a sign of growing investor anxiety. While gold demand was strong in May, investor interest in silver was relatively tepid.
2022-06-02
8841
While gold appears to be in neutral below $1,850 an ounce, actual demand for gold appears to be showing a different picture, one of which is growing investor anxiety, some market analysts said on June 1.
The U.S. Mint sold 147,000 ounces of American Eagle gold coins of various denominations in May, the best May performance since 2010, data showed. Compared to April, sales were up 67%. Gold demand has surged 617% so far this year.
Gold sales in the U.S. rose more than 400% from the five-year average from 2015 to 2019, even without taking into account the production issues related to the outbreak.
Phillip Streible, chief market strategist at BlueLine Futures, said there is a false reciprocity between gold futures prices and market sentiment. He believes gold sales better reflect investors' current anxiety. When the market hears economists talking about a recession, it starts to understand why gold sales are so strong. He believes that gold will always be a long-term store of value.
Daniel Pavilonis, senior commodities broker at RJO Futures, also said that gold sales are more reflective of current market sentiment. He added that the futures market is currently too tied to rates expected to rise this year. The Fed has already signaled that it wants to raise rates by 50 basis points at its next two meetings. However, the market was expecting three moves of 50 basis points.
While the market expects the Fed to aggressively tighten monetary policy, Pavilonis said he doesn't see interest rates rising much further because of the government's huge deficit. "Gold futures are constrained by rising interest rates, but people have been going out and buying physical gold and stashing some real money," he said.
Pavilonis added that he is ultimately bullish on gold because of the steady demand for the precious metal. He said he thinks gold is undervalued given the current level of inflation and its duration through 2022.
While gold demand was strong in May, investor interest in silver was relatively tepid. The U.S. Mint sold 850,000 ounces of silver in May, unchanged from April.
The Mint has no silver sales data for May 2021. Silver sales fell 58% compared to the five-year average from 2015 to 2019.
Streible pointed out that physical demand for silver is closely related to price. He added that if silver prices fall below $21 an ounce, he expects demand to pick up.
A global economic storm is brewing that affects the silver market. Silver prices are also struggling as interest rates rise. Meanwhile, concerns over slowing global economic growth have dented interest in silver.
Spot Gold Daily Chart
At 13:24 on June 2, GMT+8, spot gold was quoted at $1,844.68 per ounce.
The U.S. Mint sold 147,000 ounces of gold in May, its best monthly performance in 12 years
The U.S. Mint sold 147,000 ounces of American Eagle gold coins of various denominations in May, the best May performance since 2010, data showed. Compared to April, sales were up 67%. Gold demand has surged 617% so far this year.
Gold sales in the U.S. rose more than 400% from the five-year average from 2015 to 2019, even without taking into account the production issues related to the outbreak.
Phillip Streible, chief market strategist at BlueLine Futures, said there is a false reciprocity between gold futures prices and market sentiment. He believes gold sales better reflect investors' current anxiety. When the market hears economists talking about a recession, it starts to understand why gold sales are so strong. He believes that gold will always be a long-term store of value.
Daniel Pavilonis, senior commodities broker at RJO Futures, also said that gold sales are more reflective of current market sentiment. He added that the futures market is currently too tied to rates expected to rise this year. The Fed has already signaled that it wants to raise rates by 50 basis points at its next two meetings. However, the market was expecting three moves of 50 basis points.
While the market expects the Fed to aggressively tighten monetary policy, Pavilonis said he doesn't see interest rates rising much further because of the government's huge deficit. "Gold futures are constrained by rising interest rates, but people have been going out and buying physical gold and stashing some real money," he said.
Pavilonis added that he is ultimately bullish on gold because of the steady demand for the precious metal. He said he thinks gold is undervalued given the current level of inflation and its duration through 2022.
Silver investment tepid in May
While gold demand was strong in May, investor interest in silver was relatively tepid. The U.S. Mint sold 850,000 ounces of silver in May, unchanged from April.
The Mint has no silver sales data for May 2021. Silver sales fell 58% compared to the five-year average from 2015 to 2019.
Streible pointed out that physical demand for silver is closely related to price. He added that if silver prices fall below $21 an ounce, he expects demand to pick up.
A global economic storm is brewing that affects the silver market. Silver prices are also struggling as interest rates rise. Meanwhile, concerns over slowing global economic growth have dented interest in silver.
Spot Gold Daily Chart
At 13:24 on June 2, GMT+8, spot gold was quoted at $1,844.68 per ounce.
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