Most Popular Gold and Silver Coins and Bars
(JH MINT Sales and Purchase Volume Data)
Silver Stock Report
by Jason Hommel, May 18th, 2012
People who are ready to buy silver and gold often ask us, "Which should I buy?" and "What's the most popular?" It's the one ounce silver round! It's the clear winner.
The sales volume data shows what's popular, and by how much. To my knowledge, no other bullion dealer has published such data ever. Thus, this is very important industry data. It should be linked, and discussed and cross referenced by those who would comment on the physical bullion market.
The data reveals much. One of my favorite points is that it exposes a lot of fraud.
Don't ever believe it when fraudsters who vault your bullion in the form of 1000 oz. bars, claim that one ounce rounds are not popular, or that it's "too difficult" or "too costly" to manufacture these popular silver products.
Note, the data covers the period from August 2010 to April 2012, which is 1.75 years, or a year and 9 months.
We sold a total of $33.9 million, and bought a total of $13 million worth of silver and gold from the public. We have excluded purchases from wholesalers, or sales to refiners, which would have offset the difference, and would have helped to balance the numbers. So, the numbers reflect what the public is buying and selling and doing and choosing to do, not what dealers buy or sell or have to do to serve the public demand.
Overall, it's important to note that silver one ounce rounds are the most popular item, both in sales and purchases. Since they are the most popular of purchases as well, this says that silver one ounce rounds were the most popular item of the last ten to twenty years. Since sales of silver one ounce rounds were 23.6% of all sales, and purchases were 11.6% of all purchases, this says that they are only growing in popularity. We didn't sell "twice as many as we bought", we really sold $8 million worth of one oz. rounds, while we bought $1.5 million, which is 5.3 times more. To me, that suggests that one oz. rounds are 5.3 times more popular now (over the last two years), than they were "historically".
Every now and then, people will sell the 100 oz. silver bars, or sell gold coins, just to convert into one ounce rounds, as people are growing in their awareness of the need to have a fungible, popular, barterable unit of tradable precious metal.
I believe this is a good trend. It shows the growing awareness of the importance of fungibility, and it is helping the silver one ounce round to gain that fungibility that comes with being the most common unit of trade.
The sales data is showing that silver one ounce rounds are "becoming money".
Another way the data could be interpreted, is that, in theory it could be cross referenced with the total sales of Silver and Gold American Eagles, and then you could extrapolate to estimate total national US silver and gold purchases, and total trades. However, in our shop, we tend to push silver more than gold, and we also tend to push the silver one oz. rounds, so the data is not easily extrapolated to total US trends, as I will show.
I'm surprised by the data in a few ways.
First, I'm surprised that over 40% of our sales volume is the silver 1 oz. coins, the combo of the top two categories, the generic rounds, and the silver Eagles.
Second, I'm surprised how few Canadian Maples we have sold relative to Eagles. National production figures of each suggest that about 4-6 Eagles sell for every Maple. Our sales ratio is more like 25 to 1.
Third, I'm surprised that our top four categories are all silver products! Of course, I promote silver in this newsletter, over gold, but still. So, that reminds me then, by the way, thanks for listening! National sales production figures of silver and gold Eagles suggest a nearly 1:1 ratio between sales of silver and gold.
In 2011, the US MINT sold 1 million oz. of gold Eagle coins, and 40 million oz. of silver Eagles. At a price ratio of about 55 to 1, that's a dollar ratio of about 1.37 Silver to Gold Eagles sold, nationwide.
In contrast, we sell almost three times as many Silver Eagles as Gold Eagles, by dollar volume. This shows why, and by how much, you cannot assume our shop's data is representative of national trends.
Fourth, I'm surprised at the low volume of old $20 gold pieces we've sold. We mark them down lower than nearly any other dealer, as we sell them as bullion, not as "collectible" coins marked up 15% to 100% over spot, but we sell them at the same rate as new gold Eagles. Our low prices still don't encourage people to buy them in substantial quantity. This really goes to expose the scam of selling "rare" gold at inflated prices. (Another part of the reason I do this is that it shows that it's impossible for anyone to be scammed by anything if you refer your friends to our shops. With no scams available on sale, you can trust us with your referrals, which is essential to our business, and essential to helping silver and gold return as honest money.)
Fifth, I'm surprised at the very low volume of historic American silver dollars. We also sell them at bullion prices, and again, the low price just does not encourage sales of these "non moving" forms of bullion inventory. I assume people don't like the odd weight, and they avoid the unusual and not popular stuff, and maybe they avoid it because we pay less for them when we buy them back.
Sixth, I'm surprised at how few silver Philharmonics we've sold. They are really beautiful coins. People are not buying beauty from us, but rather, they are aiming for just the simple preservation of their purchasing power.
Seventh, I'm surprised at how gold bars have nearly caught up to Gold Eagles. It seems people make a choice between either "Most popular" or "Least premium", and often a combination of the two! "I'll take three American Eagles and two gold bars, please," is not an uncommon request.
Eighth, I'm surprised that people love the Gold Maples so much much more than the Silver Maples in our area. The low sales volume of Silver Maples makes me think people in our area have a bias against Canadians, but the sales of Gold Maples says it's not a problem. Maybe the issue is that our price board is not listing silver Canadian coins as a separate item, but we do list Gold Maples?
Ninth, we sell nearly ten times the dollar volume of ten oz. silver bars compared to five oz. silver bars. Kerri, in our office, continually tells me that "we need more 5 oz. bars, as people love the 5 oz. bars". Well, that may be true, in that people who buy 5 oz. bars are excessively enthusiastic about that product, but most people who buy silver are not. Rationally, it seems to me that we ought to stock about ten times the dollar volume of 10 oz. bars compared to the 5 oz. bars. And this leads us to sell out of the 5 oz. bars more frequently, because enthusiastic buyers sometimes buy all that we have. But sometimes, an individual buyer may buy out all of our 10 oz. bars, as well!
Tenth, 40% silver coinage is hardly worth mentioning, but I will. It's horrible. Refiners and wholesalers hate it. Sometimes, they refuse to purchase it completely. And sometimes, so do we. Sorry about that. And funny enough, the stuff is actually an example of "adulterated" silver, the exact kind of which the old law made punishible by death.
According to the Coin Act of 1792, those who debased the currency, "or otherwise with a fraudulent intent" were to suffer the death penalty:
Penalty of Death for de-basing the coins. Section 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.
As a result of this sales data, I may make a few changes.
I may wholesale out, or lower the price bracket spread, on 90% silver. We have a bit too much in stock, due to so much recent selling to us of this form of silver. Hey they don't make this kind anymore, and sometimes it sells out at the wholesale level too, so consider buying some from us while it's cheap and available.
I may raise my buy price on 1 oz. rounds, as they are easy to count, easy to trade, and I like the "quick delivery", called "now", when buying from the public.
I will no longer be buying silver Maples, silver Philharmonics or fractional gold coins from wholesalers, "just to stock", but I can get them in quantity if buyers specifically request a large purchase. We have not really bought these for nearly 6 months anyway. We will likely still have the products, but perhaps not in large quantity. They don't move enough to be worth the risk of selling out of 1 oz. silver rounds.
I do need to re stock more 1 oz. rounds!
Here's JH MINT Sales data without commentary.
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