The U.S. Mint is selling out of gold and silver coins…
Last month, the U.S. Mint sold 97,000 ounces of American Eagles, the most popular U.S. gold coin. That’s 185% more than it sold in October, and 62% more than November 2014.
Demand for gold coins has been so strong that the U.S. Mint is running out of certain coins. It recently sold out of its 0.1-ounce, 0.25-ounce, and 1-ounce 2015 gold American Eagles.
During the third quarter of this year, the U.S. Mint sold 397,000 ounces of gold American Eagles. That was the most it’s sold in a quarter since early 2010.
The huge spike in gold coin sales shows that investors are using low prices to load up on physical gold. The price of gold has fallen 10% this year. Gold is now trading at a five-year low.
• The U.S. Mint is also selling record amounts of silver…
It has sold 44.67 million ounces of silver American Eagles so far this year, breaking last year’s all-time record of 44 million ounces. November’s sales were 41% higher than they were in November 2014.
Like gold buyers, silver buyers are using low prices to stock up on silver coins. The price of silver has fallen by almost 11% in the last month. It’s now trading at a six-year low.
• Casey readers know why it’s important to own physical gold and silver…
Precious metals are the best protection against out-of-control governments. As we’ve stressed many times, major world governments have created trillions in currency units since the financial crisis, setting us up for a global currency crisis. Cracks are already starting to show in several major currencies. In just the last two years, the euro has lost 22% of its value…the yen has lost 16%…and the Australian dollar has lost 21%.
As Casey Research founder Doug Casey puts it:
These reckless policies have produced not just billions, but trillions in malinvestment that will inevitably be liquidated. Paper currencies will fall apart, as they have many times throughout history.
Every time paper currencies fall apart, gold holds its value…and often increases in value. With precious metals prices at multi-year lows, now is a great time to build a position in physical gold and silver.
• The U.S. dollar just hit a new 12-year high…
On Monday, the U.S. Dollar Index closed at 100.21, its highest close since 2003.
The index has rallied 6.7% over the past six weeks. And it’s gained 26% since last summer. This is a massive move for a major currency.
• The euro is at an eight-month low against the dollar…
The value of the euro has declined 5.6% against the dollar over the past month…largely because the ECB is printing hundreds of billions of new euros. Europe’s quantitative easing (QE) program is currently pumping €60 billion ($64 billion) into the Eurozone’s financial system each month. Each new euro makes existing euros worth a little less.
The weak euro is one big reason why the dollar appears strong today. To measure the value of the dollar, we use the U.S. Dollar Index…which compares the dollar against other major currencies like the euro, Japanese yen, and British pound. The euro is, by far, the largest component of the index with a weight of 58%. So when the euro loses value, it causes the dollar index to go up. A weak euro makes for a strong dollar.
• The ECB’s QE program could strengthen the dollar…
Because a weaker euro makes for a stronger dollar, Europe’s ongoing QE could keep the dollar strong. However, this doesn’t change the fact that the dollar has been losing value for decades. This long-term chart shows that the dollar’s trend has been “down” since 1985.
• Corporate insiders are cashing out of the stock market…
Corporate insiders sold $7.8 billion worth of stock last month, according to Barron’s.
Insiders include high-ranking corporate officers and directors. Insiders tend to be more knowledgeable about the stocks they’re buying and selling than non-insiders. So a spike in insider sales can be a warning sign that businesses aren’t doing well.
On Monday, Barron’s reported that last month’s insider selling reached the highest level since 2011. Insiders also sold $2 billion more in stock last month than they did during September and October combined.
• Insiders sell for many reasons…
They could be expecting their companies to do poorly. They could be selling for tax purposes or personal reasons. They may also be selling because they think the bull market is coming to an end…
The current bull market in U.S. stocks is almost 81 months old. That will make it 31 months older than the average bull market since World War II.
Stock valuations are also very rich today. U.S. stocks are 59% more expensive than their historical average, based on the popular CAPE ratio.
We can only speculate why insider selling surged last month. Even so, it’s not something investors should overlook. It’s another worrying sign that the bull market in U.S. stocks is nearing an end.
We recommend investing with caution today. We suggest you own a significant amount of cash and some physical gold. You may also want to hedge your portfolio by shorting (betting against) companies most vulnerable to a stock market crash. These simple strategies can save you a lot of money during the next market downturn.
Chart of the Day
The U.S. Mint has never sold more silver American Eagles.
Today’s chart shows this year’s record sales for silver American Eagles. As you can see, Silver Eagle sales have more than doubled since the financial crisis. Last year, the mint sold an all-time record 44 million Silver Eagles. This year, the U.S. Mint has already sold 44.7 million American Eagles…and it still has a month to go.
Due to the record demand, the mint has suspended Silver Eagle orders until December 14.
Delray Beach, Florida
December 02, 2015
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