The Great Planchet Hold-up of 2009

When the US Mint was faced with unprecedented demand for physical gold bullion Eagles when the financial crisis really hit the average investor in late 2008, despite regulations requiring the Mint to keep up with demand, they instead ran out and began rationing the coins, making it almost impossible for many to purchase gold Eagles. The slow up was not blamed on excessive demand, which was already noted, but on logistical problems with the manufacture of gold planchets.

For those who are not already in the know, planchets, also called “type 2 blanks” are the unmarked disks that coins are stamped from. The manufacture of these had been outsourced to private firms during the second Bush Administrations after being directly overseen by the mint for many years.

While the US Mint continues to maintain that this problem is in the process of being solved from a purely logistical standpoint, collector continue to be faced with rationing well into 2009 with no sign of letting up, with demand still historically high. Gold production in the United States still remains high, with the US regaining its position as the number two producer in 2008, it remains the only major mint still rationing its gold production.

Among the rumors that have fueled conspiracy theories among collectors is that the company that supplies planchets has been illegally using Australian gold to supply the US Mint. This is not actually true, though the Gold Corp company does operate mines in both countries. It is notable that both the Perth Mint and the US Mint ran out of 2008 coins at roughly the same time.

More likely is the explanation that they simply didn't foresee demand rising to such levels and were caught unaware. Starting at such a deficit, they've been unable to meet the continuing massive demand for gold bullion Eagles.

Whether the mint will be able to catch up in 2009 remains to be seen. Even with gold rising to $1,000 per ounce in February of 2009, investors looking to buy gold Eagles have had to look elsewhere to find either secondary market Eagle coins or invest in the coins of other nations such as the Canadian gold Maple leaf or Austrian Philharmonic coins. The 99.99% pure gold Buffalo coins have also become scarce, further straining the market for full-ounce gold Eagles as well as the fractional denominations.

For the hoards of investors that still want to keep their investment dollars in the United States with the purchase of gold bullion Eagles, the wait remains, with still no conclusive word on when the situation will improve for bullion gold Eagles. There has been some talk as to whether this situation will have a lasting impact on the number of people willing to invest in gold Eagles, but in all likelihood, the number of people who will continue to clamor for the few coins that are able to be delivered in 2009 is likely to actually increase, with an eye toward a potential numismatic value for what could be a low-mintage year for these coins in the coming years.

Article Article

Stewart Lawson

April 12, 2009