The United States Mint’s bullion program delivered stellar results during the fiscal year ended September 30, 2013. A sharp increase in demand drove record sales volume of 45,862,000 ounces of gold and silver bullion. Total revenue for the segment grew by 31.8% to more than $3.2 billion with net income more than doubling to $59.3 million.
The United States Mint manufactures gold and silver bullion coins which are issued to a network of authorized purchasers based on the market price of the metals plus a premium. The authorized purchasers distribute the coins more broadly to the public and agree to maintain an open two-way market for the coins, assuring their liquidity.
The US Mint’s current bullion products include the American Gold Eagle, American Silver Eagle, American Gold Buffalo, and America the Beautiful Five Ounce Silver Coins. The weight, content, and purity of all bullion coins are guaranteed by the United States government.
United States Mint Bullion Program Sales Volume
| (ounces sold) | 2013 | 2012 | Change |
| American Gold Eagle | 983,000 | 647,000 | 51.9% |
| American Silver Eagle | 43,559,000 | 33,707,000 | 29.2% |
| American Gold Buffalo | 235,000 | 141,000 | 66.7% |
| ATB Silver | 1,085,000 | 445,000 | 143.8% |
| Total | 45,862,000 | 34,940,000 | 31.3% |
After two previous years of declines, the US Mint saw gold bullion sales rebound sharply during the year. American Gold Eagle sales grew by 51.9% to 983,000 ounces and American Gold Buffalo sales grew by 66.7% to 235,000 ounces. The increased demand was driven in part by a decline in the market price of gold. When gold posted its largest one day percentage drop in 30 years on April 15, 2013, authorized purchasers ordered more than 100,000 ounces of gold during the next three days. The jump in demand resulted in the temporary sell out of the one-tenth ounce sized American Gold Eagles.
The US Mint achieved record breaking volume in silver bullion coin sales at 44,644,000 ounces across the two offerings. Sales of the American Silver Eagle bullion coins grew by 29.2% compared to the prior year, while the lower volume America the Beautiful Silver Bullion Coins saw growth of 143.8%. Amidst high demand, the Silver Eagles remained subject to allocation from January 28 through the end of the fiscal year. During times when demand exceeds available supply, the US Mint has used an allocation program to ration the available number of coins amongst authorized purchasers.
During the fiscal year, the average daily spot price of gold was $1,521.61 per ounce, down by 8.4% from the prior year. The average daily spot price of silver was $26.79 per ounce, down by 13.4% from the prior year.
Bullion Coin Revenue, Cost, and Net Income
| (in millions) | American Gold Eagle | American Silver Eagle | American Gold Buffalo | ATB Silver | Total |
| Sales Revenue | $1,586.0 | $1,256.0 | $371.9 | $30.7 | $3,244.6 |
| Gross Cost | ($1,544.7) | ($1248.2) | ($362.4) | ($29.5) | ($3,185.3) |
| Net Income | $41.3 | $7.8 | $9.0 | $1.2 | $59.3 |
| Net Margin | 2.60% | 0.62% | 2.42% | 3.91% | 1.83% |
The increases in sales volume more than offset lower selling prices, resulting in revenue growth across the US Mint’s four bullion programs. Revenue generated from American Gold Eagles rose by 43.4% to $1.586 billion, revenue from the American Gold Buffalo rose by 54.6% to $371.9 million, revenue from Silver Eagles rose by 14.1% to $1.256 billion, and revenue from ATB Silver Coins rose by 143.8% to $30.7 million.
The US Mint’s four bullion programs generated net income of $59.3 million for the fiscal year. This was an increase of 108.8% compared to the $29.4 million in net income for the prior year.
Net margins showed improvement across all four bullion programs as the higher sales volumes spread fixed costs over a larger number of units. Compared to the prior fiscal year, net margin improved from 2.53% to 2.60% for the American Gold Eagle, from negative 0.40% to positive 0.62% for the American Silver Eagle, from 2.20% to 2.42% for the American Gold Buffalo, and from negative 3.50% to positive 3.91% for the ATB Silver Coins.
not really sure if you can help,but about 2 years ago,i read an article that presumed at current rate of usage(believe it was about 30 million ounces)that by the year2020-2021 the use of silver would be pretty well shot by the US mint is there anywhere i could learn more about this? thanks
Great write-up, Michael. I am not surprised to see that the decline in gold prices are what caused the big sales surge. Demand for gold and silver at the current prices seems to be stratospheric; no one seems to believe that the current prices are “real” and everyone is still expecting a big rebound at some point. I think if people did believe the current prices to be “real,” you’d see sales declining back to pre-2008 levels and not accelerating like this.
Also of interest were the results from the AtB silver bullion program. Not only did that have the largest percentage sales increase, it also had by far the highest net margin. If the US Mint can keep demand for these products increasing, the AtB program seems like it could become very profitable for them. I have to say, I am really happy to see it apparently turning the corner at last.
@britaniawaves,
Basically US silver production is 30-35 million ounces. The US Mint must buy from US sources first if they can not meet the demand then they can go to foreign sources. In essence the US mints bullion program consumes the entire us silver production, we are currently the 9th silver producer in volume.World silver production is about 787 million ounces so the us mint has big dent in taking production but I doubt it will have a global effect. Now saying that IMHO these production levels should be difficult to maintain because most silver is mined as a byproduct of the lead/zinc sector, which is slowing down due to lack of demand. The increase cost of fuel\mining makes the current production levels hard to maintain at the current price.
Google “The Silver Institute” it has production and demand data.
many thanks sith,with the info you posted it kind of clarified production and usage a bit…..last year the mint used about 48,000,000 ounces of silver and government produced about 37 million ounces,which may mean they are already out in the secondary market,thanks so much for the information
http://www.silverdoctors.com/silver-update-ase-sales-from-national-defense-silver-stockpile/
interesting numbers about silver in a document style webcast