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Canadian Mint Gold Sales Surge 53% in Second Quarter

Gold News

The Royal Canadian Mint Sold 464,000 Ounces of Gold in First Half of 2016

The Royal Canadian Mint (RCM) released its second quarter 2016 report last week. 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. The RCM second quarter report showed gold sales of 251,400 ounces an increase of 53% from the second quarter of 2016.

Total first half 2016 RCM gold sales were 464,000 ounces up 37% from 342,900 ounces during the first half of 2015.

United States Mint Gold Sales Rise to 1.3 Million Ounces in First Half of 2016, Topping Sales at Canadian and Perth Mint sales

While the Canadian Mint’s first half 2016 gold sales were impressive, the United States Mint’s gold sales topped the Canadian Mint’s overall sales and percentage increase. The United States Mint first half 2016 gold sales as of the end of June 30, 2015 were 613,500 ounces up 66% from 1st half 2015 sales of 370,000 ounces.

The United State Mint also topped the Perth Mint’s first half 2016 gold sales of 232,715 ounces that were up 38% from the Perth Mint’s 1st half 2015 sales of 168,650.

canadian perth and US mint first half gold sales bgasc
The top three sovereign mints all increased their gold sales in the first half of 2016.

Silver sales at the RCM in the first half of 2016 were up 21% from the first half of 2015. Silver sales at the United States and Perth Mints in the first half were up 21% and 172%, respectively from the first half of 2015.

Second Quarter RCM Gold Sales Build on Rebounding 2015 and First Quarter 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.

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. The pace of gold sales accelerated in the second quarter to 251,400 ounces, or one million ounces on an annualized basis.

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 second quarter of 2016 at the RCM in 2016 were just 27,216 ounces lower than 2007’s entire year sales of 278,616 ounces.

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

Canadian Mint gold sales 2007-2016 bgasc through june 2016
Gold sales at the Royal Canadian Mint in the first half of 2016 were nearly a half a million ounces.

While gold sales were strong at the RCM in the first half, 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 Price of Gold in 2015 and 2016

The low price of gold in 2015 helped drive sales in the second half. Rising prices in the first half of 2016 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.

In the second quarter of 2016, the silver to gold sales ratio at the RCM fell to 36 to 1 as the pace of silver sales slowed in the second quarter and gold sales increased from the first quarter.

The Canadian Gold Maple Leaf Coin

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Over four hundred and fifty thousand ounces of gold were sold at the Royal Canadian Mint during the first half 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.