Fund Which Liquidated Over 1 MILLION Gold Eagles Since 2012 May Be Buying Again

No one ever talks about the secondary market on American Gold Eagle coins when it comes to the demand side of the equationalways about how many the Mint is currently cranking out
The dearth of back-dated Eagles may be the first sign that the Permanent Fund – which has dumped over 1 MILLION gold eagles and maples onto the market since 2012has stopped selling and may be starting to buy again…

 

Guest Post, by SD Reader TB:

On your last Metals and Markets podcast you mentioned the scarcity of back-dated American Gold Eagles in the market.  No one ever talks about the secondary market on AGE’s when it comes to the demand side of the equationalways about how many the Mint is currently cranking out

What has skewed the numbers over the past is buying/selling by the big multi-Billion dollar Permanent Fund.  Up until mid July of 2012, the Permanent Fund, which holds 20% of it’s assets in gold and 2/3’s of that in one ounce coins (Eagles and Maples), had been the big buyer in the market.  It held 1,400,000 one ounce coins as of July 31, 2012.  (The fund manager must be a big believer in investing in the real thing — gold that you can hold in your hand)  After the bust in the gold price, the fund has had continuing redemptions forcing them to constantly readjust their holdings to maintain their 20% allocation.  The fund (as of  Oct 31, 2015 – the latest quarterly statement) now only holds 350,000 one ounce coins. 

They have unloaded over a million coins on to the secondary market over the past 3 years.  Once investors start getting out of the high flying stock funds and flock back to this preservation of asset strategy fund, it will again begin to attract money and the gold coin buying will begin anew.

The dearth of back-dated Eagles may be the first sign that the Permanent Fund has stopped selling and may be starting to buy again.

http://permanentportfoliofunds.com/index.htm
Extracts from past quarterly reports:  (the bullion is held on the Comex)

July 31, 2012
(Unaudited)
Quantity Market Value
GOLD ASSETS — 21.03% of Total Net Assets
761,469 Troy Oz. Gold bullion (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,226,345,506
1,400,000 Coins One-ounce gold coins (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,313,500,000
Total Gold Assets (identified cost $2,602,195,799) $ 3,539,845,506
SILVER ASSETS — 4.77% of Total Net Assets
28,300,120 Troy Oz. Silver bullion (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 794,797,356
379 Bags Silver coins (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,378,746
Total Silver Assets (identified cost $597,904,777) $ 802,176,102

————————————————————————————————————————————————————

October 31, 2015
(Unaudited)
Quantity Market Value
GOLD ASSETS — 20.62% of Total Net Assets
308,995 Troy Oz. Gold bullion (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 352,717,955
350,000 Coins One-ounce gold coins (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,193,750
Total Gold Assets (identified cost $778,197,614) $ 761,911,705
SILVER ASSETS — 5.03% of Total Net Assets
11,643,205 Troy Oz. Silver bullion (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 181,238,133
379 Bags Silver coins (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,784,850
Total Silver Assets (identified cost $250,034,729) $ 186,022,983

————————————————————————————————————————————————————

One can basically add 1 million ozs of one ounce gold coin demand to what most people thought “stackers” accumulated over the past 3 years. 
I doubt that those coins went anywhere else but to private citizens.  This would be in addition to the normal churn of buyers and sellers of circulating gold coins.  I’ve never seen the breakdown of percent Eagles/Maples held anywhere in their literature, but this source shows it to be basically 50/50.  http://money.usnews.com/funds/mutual-funds/conservative-allocation/permanent-portfolio/prpfx/holdings
All the 400oz bars that left the ETFs are a different story, which may be coming to a head soon with the current huge gold flows into GLD and the other gold ETFs.
 
 

Gold Trivia:  There is more than twice as much gold circulating in the form of gold Krugerrands than is held in the  GLD trust!

Oh, and thanks again for doing the interview with Tom Powers of the Sunshine Mint.  It was one of the best Metals and Markets podcasts you’ve done.

SUNSHINE