A global shortage of physical gold and silver products has created a premium on coins and bars, and this premium is causing a disconnect between the spot price and the “true” price that retail investors need to pay, said Ed Moy, former director of the U.S. Mint.
Moy, who was the director of the U.S. Mint between 2006 and 2011, cites the inability of the mints around the world to keep up with physical coin and bar demand as a reason for this shortage.
“Not only the U.S. Mint, but other Mints around the world, Australia’s Perth Mint, the Mexican Mint, have all run out of gold, they can’t keep it in spot and there’s so many shortages retailers are having problems accessing that gold,” Moy told Michelle Makori, Kitco’s editor-in-chief.
Premiums on these physical gold and silver products can run as high as 20% in some places, Moy said.
“If you go to any of the top retailers for gold bullion and take a look at what they’re charging for an ounce American Eagle gold bullion coin, even though the spot price right now is $1,775 give or take, you’re hard pressed to find a ounce gold coin for anything less than $2,000, and I’ve seen it as high as $2,100,” he said.
One of the main reasons for why the spot prices have not caught up to gold and silver’s premium-adjusted price is that the overall markets are flooded with bullion derivatives, Moy said, but it’s only a…
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