Precious metals drop sharply even as physical demand runs at its highest levels since the 2008-2009 financial crisis

(USAGOLD – 2/15/2021) – Precious metals dropped sharply in early trading as government bond yields jumped and the dollar firmed somewhat. Gold is down $18 at $1802. Silver is down 66¢ at $27.03. While prices have been in a downtrend to start the year, investor demand for coins and bullion is running at levels not seen since the 2008-2009 financial crisis. That strong demand is coming from investors concerned about the proposed $1.9 trillion stimulus package, the accompanying massive federal deficits, and Fed promises to allow its ultra-easy monetary policy to run at full tilt for the foreseeable future.

“Obviously, short term, there’s a lot of factors that are causing some push and pull, which has kept gold trading within a very tight range,” says former U.S. Mint Director Ed Moy in an interview at S&P Global Market Intelligence. “But from my perspective, I think the fundamentals for rising gold prices are very strong over the next year. I expect gold prices to eventually break out and head to new records sometime in the next year or two.….” That said, his former employer, as shown in our Chart of the Day, enjoyed a very big January for gold coin sales as investors took advantage of falling prices for much of the month, and February looks to be off to a very strong start.

Chart of the Day

bar chart showing U.S. Mint gold coins sales big jump January 2021

Chart note:  The U.S. Mint posted its best month in five years in January with gold coins sales of 282,000 ounces.

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