US Mint: a Division of the Treasury Department

Gold prices, buoyed by the 'currency wars' which pose a virtually insolvable problem for economies the world over, continue to maintain near-record prices. Demand for physical bullion surges, yet so far supplies are adequate and premiums hold steady.

Earlier this month, the US Mint ran out of 2010-dated gold Buffalo bullion coins, and we probably won’t see any more until the 2011 issues. We’re down to about a hundred or so of the 2010 Buffaloes in stock, but when they are gone, that may it for a while.

The US Mint also made a surprise announcement two weeks ago – a raise in its price to distributors on bullion silver Eagles from $1.50 premium to $2.00. We have had to accordingly raise our delivered price for these popular coins.

The Royal Canadian Mint has not nudged its price upward for silver Maple Leafs as of yet, but we wouldn't’t be surprised to see Maple premiums rise soon. So far, we are holding the line on silver Maple prices. But by next week, who knows?

In the midst of gold latest run-up to record prices, gold Eagle production rebounded from its August low of only 39,000 one-ounce coins to 82,500 in September. Off-take so far in October is also strong, as demand for physical has caught fire in the past six weeks or so.

Supplies at this point are still good for most bullion products, gold Eagles included, and premiums are what can be called ‘normal,’ as opposed to the frightful days of 2008 when production simply could not keep up with demand for any form of physical bullion, all over the world.

Dollar weakness seems to be the key, as last week our currency hit a 15-year low against the Japanese yen (it now takes only 82 yen to buy a dollar), and for the first time in quite a while, our dollar trades for less than the Swiss franc.

Quantitative easing seems to be the theme these days, as dollars continue to be created out of thin air for the avowed purpose of stimulating our moribund economy. As most of the world’s economic officials see weakening of the home currency as a panacea for crumbling economies, the ‘race to the bottom’ in is full swing.

Whether this is a competition that actually produces any winners, remains to be seen. But judging from recent evidence, we are confident that the Federal Reserve and Treasury Department will do their best to keep us competitive in the race towards monetary oblivion.