2016 Saw Highest Demand for Gold Coins Since 2011

Gold demand trends are constantly changing and while sales might have been low in October, the U.S. Mint saw a spike in market interest. Historically low-interest rates are currently tied to physical gold assets, which have majorly influenced the demand for coins. In fact, a report recently released by the U.S. Mint revealed how gold bullion products were as high in demand throughout 2016 as they were in 2011. This news comes after a compilation of sales data was published, confirming that the 2016 American Eagle one-ounce, quarter-ounce, and tenth-ounce coins have reportedly sold out. Gold bullion investors and collectors can still get their hands on one-ounce Buffalo and one-half-ounce American Eagle coins, however.

So, why were sales for American Eagle coins so high this year? The gold coin sales figures are just below rates seen in 2011, with 984,500 ounces of gold being sold throughout 2016, and one million ounces of bullion sold in 2011. November was the month with the most demand. Total sales hit 147,500 ounces, which is over 50 percent more than the recorded sales for November 2015. An eight percent drop in prices encouraged buyers to invest and at just $1,167.90 an ounce, who could blame them?

Recovering from a Slow Summer

In October 2016, the U.S. Mint reported that gold sales were higher than they had been since April. This news was well-received by sellers and investors alike. Nevertheless, the spike in sales did not necessarily mean that demand was higher than it was the year before. During September, the number of American Eagle and Buffalo gold coins (various denominations) sold was 67,500 ounces. This is a 65 percent increase from August, but it is 23 percent less than it was at the same time last year. It is interesting to learn that the rise in demand has not affected supplies, and the marketplace is currently bulging with physical gold products.

Gold Prices Could Drop in 2017

Just because 2016 has been a good year for gold bullion sales, it does not mean that the outlook for 2017 is bleak. In fact, there are a myriad of reasons why gold prices have the potential to rise in the next few months. Global concern is one reason. There is hope that a stronger dollar will be achieved as a result of tax cuts and more infrastructure expenditure, which will translate to lower gold prices. Another reason why gold prices could plummet in 2017 is because India imported huge amounts of gold in a single week – 30 tonnes to be precise. This instant demand caused gold prices to shoot up. As a long-term wealth builder, gold is always a worthwhile investment, especially since it tends to appreciate in value frequently.

Demand is having an effect on the market as a whole and the market could be stabilized, as a result. While increasing demand might not be reducing debt completely, the outlook for 2017 is appealing. Supply and demand dynamics, bad market conditions, and geopolitical uncertainty are three concerns that have been raised by the World Gold Council (WGC). However, a 15% year-on-year demand increase was noticeable in the second quarter of this year, which brings hope for 2017.