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First Quarter Royal Canadian Mint Gold Sales Up 19%

Gold News
Royal Canadian Mint Sold 212,600 Ounces of Gold in First Quarter of 2016

The Royal Canadian Mint (RCM) released its first quarter 2016 report two weeks ago, just a week after they released their 2015 annual report. The RCM’s 2015 annual report showed that they sold 963,000 ounces of gold last year. The RCM’s 2016 first quarter report showed gold sales of 212,600, an increase of 18.7% from the first quarter of 2015.

Silver sales at the RCM were up 19.3% from the first quarter of 2015.

1st Quarter Gold Sales Build on Rebounding 2015 Gold Sales

Sales of gold in the first half of 2015 at the RCM were slow and appeared headed for a lower annual total than 2014’s 709,200 ounces. In the second half of 2015, however, sales rebounded at a pace closer 2009’s record year of 1,233,200 ounces. In 2015 the RCM ended the year having sold 953,000 ounces of gold, with nearly 2/3 of it sold in the second half of the year.

Gold sales in the first quarter of 2016 at the U.S. and Perth are also up substantially from the first quarter of 2016.

In the first quarter of 2016, the Canadian Mint’s sales of over 212,000 ounces of gold put it on pace to sell approximately 850,000 ounces this year.

Gold sales at the Canadian Mint accelerated after the financial crisis of 2008 and hit a peak of 1.233 million ounces in 2009. Gold sales in the first quarter alone at the RCM in 2016 were just 66,000 ounces lower than 2007’s entire year sales of 278,616 ounces.

The chart below shows the first quarter Royal Canadian Mint gold sales in 2016 vs. annual sales since 2007.

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Gold sales at the Royal Canadian Mint in the first quarter of 2016 put it ahead of last year’s pace.

While gold sales were strong at the RCM in the first quarter, gold was not the main story. Gold sales seem to have plateaued since 2008 at an average of around one million ounces a year. Silver sales in contrast, have hit a new sales record in each of the past three year and are on pace to set another record this year. Skyrocketing silver sales were explicitly noted by the Canadian Mint in its annual report …”many investors have shifted [from gold] to silver as the preferred investment over gold due to its affordability and the safety net provided by industrial demand”

The Royal Canadian Mint noted in its quarterly report that “Sales of silver bullion have been driven for several quarters by demand that exceeds supply in North America and Europe.”

The Price of Gold in 2015

The low price of gold in 2015 helped drive sales in the second half. Rising prices in the first quarter may have slowed sales from the 286,600 ounces sold in the fourth quarter of 2015 and the 323,400 ounce sold in the third quarter last year. A rising gold silver ratio that reached nearly 80 to 1 during the year made silver ‘cheap’ relative to gold, making it more attractive.

The Royal Canadian Mint also sold 953,000 ounces of gold in 2015, for a silver to gold sales ratio of 36 to 1.

In the first quarter of 2016 the silver to gold sales ratio at the RCM grew to nearly 50 to 1.

The Canadian Gold Maple Leaf Coin

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Over two hundred thousand Canadian Gold Maple Leaf coins were sold in the first quarter of 2016.

The bulk of gold sold by the Royal Canadian Mint is in the form of one ounce Canadian Gold Maple Leaf coins. The RCM also mints gold maple leaf coins in 1/20, 1/10, 1/4 and 1/2 ounce sizes. The obverse of Canadian Silver Maple leaf coins feature a portrait of the Queen of England and the inscriptions “Elizabeth” and “50 Dollars”. The reverse of Canadian Maple Leaf coins boast an image of a single maple leaf and the inscriptions “CANADA” “Fine Gold 1 oz Or Pur”. The Canadian Gold Maple Lead coin is 99.99% pure gold.

About the Canadian Mint

The Royal Canadian Mint is the national mint of Canada and it produces the general circulation coinage for the nation and for other foreign nations. The RCM also provides other services such as minting gold and silver bullion coins, as well as special edition collector’s edition coins and coin sets. The Canadian Mint also offers precious metals storage services for businesses, assay services to determine and ensure precious metal bullion weight and finess. The Canadian Mint has operated as a refinery since 1911.

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This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.