Bloomberg reports that the US Mint is limiting the supply of silver and gold coins to authorized buyers. The reason is the coronavirus pandemic. But that’s not all. It is also about the interest in metals on the part of speculators.
The US Mint limits the supply of new gold and silver coins
According to documents obtained by Bloomberg, the reduction in supply is mainly due to a pandemic that has affected the pace of production. The Mint is to overcome the crisis regarding the pace of work in the period from 12 to even 18 months.
It is worth noting that before the pandemic and the lockdown, the West Point Mint could produce gold and silver coins simultaneously. Currently, production is only possible for one metal, so the work takes place in turns.
– The pandemic has created a whole new set of challenges for us that we must meet. We believe that this state of affairs will continue to lead to some degree of capacity constraints as West Point tries to balance worker safety with market demand – we read in the document quoted by Bloomberg.
Last week, mint officials even called on American consumers to… spend their coins, as the pandemic has severely reduced circulation.
For the first time in its history, the US Mint also asked buyers to provide its 10- and 90-day forecasts of coin demand.
The mint was also closed for a few days in mid-April. The aim was to reorganize production in order to provide employees with the greatest possible safety at work.
Records in the precious metals market
Apparently, the decision was also to be taken due to the actions of speculators (probably hence the request to increase trade in coins on the market). All this, however, can have the opposite effect and drive the demand for gold and silver coins even more. Gold was already trading at $ 1,980.57 an ounce on Tuesday. Now the market has learned that there will be even fewer new coins in circulation than it is today. Additionally, tomorrow we have a Fed meeting at which important decisions regarding US monetary policy may be taken.