U.S. Mint's Silver Coin Sales Hit Record High

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Gold coin buyers stepped up their purchases from the U.S. Mint in 2013, even as investors in other forms of the precious metal sold their holdings, while silver coin sales set a record.

The Mint sold 42.675 million ounces of silver American Eagle coins during the year, up 26% from 33.7 million ounces sold in 2012, data from the agency show. It was the most silver coins sold in a year since the Mint started producing the American Eagle series in 1986.

Demand for the coins was high as silver prices fell 36% this year, analysts said.

The Mint sells coins to dealers, who in turn make them available to the public. Market participants consider the Mint's data as an indicator of individual investors' demand for gold and silver.

Silver coin sales hit a monthly record in January, with the Mint temporarily selling out of the 2013 American Eagle Silver Bullion coins.

When coin sales set a record in April, the Mint restricted sales of the one-ounce silver coins as it struggled to keep up with robust demand for bullion.

The Mint sold 856,500 troy ounces of the American Eagle gold coins in 2013, up 14% from the 753,000 troy ounces sold in 2012 and the highest sales since 2011.

April was the Mint's busiest month for gold coins, with more than 200,000 ounces of the coins sold to dealers. That was also the month that gold futures posted the largest two-day decline since Comex gold trading began in 1974.

"The lower prices attracted retail buyers, especially in countries where there was a fear of currency devaluation," said George Gero, a senior vice president with RBC Capital Markets Global Futures.

Gold prices fell 28% in 2013, ending a 12-year bull run as the U.S. Federal Reserve prepares to wind down its stimulus efforts. The decision, announced in December, removes a long-running support from the gold market. Many investors had flocked to the perceived safety of precious metals amid fear that the Fed's accommodative policies would raise inflation and weaken the dollar.

Investors of all stripes slashed their gold holdings in 2013 in anticipation of the Fed's move. Speculative traders on the Comex whittled their net bullish wagers from 18.9 million ounces to just 2.7 million ounces, said Howard Wen, a precious-metals analyst with HSBC Securities (USA) Inc.

Physical gold held by exchange-traded funds, which buy and store the metal on investors' behalf, fell from 84.58 million troy ounces at the start of year to 57.7 million ounces on Dec. 31, according to HSBC. This is the lowest level of gold ETF holdings since 2009.