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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.
Data:
http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2011
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!
I've published
similar data over a year ago:
Simiarly,
the 1 oz. silver round was the most popular then, too.
http://silverstockreport.com/2011/JHMINT-sales-data.html
Here's JH MINT
Sales data without commentary.
http://jhmint.com/reports.html
Feel free to facebook this, reprint, republish, etc.
Now is a great
time to buy silver and gold. We
through the JH MINT, www.jhmint.com can handle your orders.
I strongly
advise you to take possession of real gold and silver, at anywhere near today's
prices, while you still can.
The fundamentals indicate rising prices for decades to come, and a
major price spike can happen at any time.
JH MINT &
Coin Shop
13241 Grass
Valley Ave
Grass Valley,
CA 95945
(530) 273-8175
www.jhmint.com
Minimum telephone
order $5000 for free shipping, USA shipping only.
Open 10AM to
5PM Pacific Time, Monday to Friday, closed weekends and bank holidays. (Also Closed from Dec. 25th to Jan
1st)
Kerri handles
internet phone orders:
kerri.jhmint@yaoo.com
(530) 273-8822
NEW Location in
Auburn, CA!
JH MINT Silver
& Gold
1760 Highway 49
A140
Auburn, CA
95603
(530) 889-1086
http://auburnsilverandgold.com/
You can also
buy silver from my mom at www.momssilvershop.com
Mom will ship
overseas, even large orders up to $300,000 or larger, and also in lots of
more or less than 100 ounces.
3510 Auburn
Blvd #12
Sacramento, CA
95821
Sincerely,
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