Tag Archives: Us Mint

Is there any gold bullion stored at the US Mint in Denver?

Anyone with even a passing interest in US official gold reserves will probably recall that the US Treasury claims to hold its gold (8,133.5 tonnes) over four locations in continental United States, namely at three US Mint facilities in Fort Knox (Kentucky), West Point (upstate New York), Denver (Colorado), and at the New York Fed (Manhattan, New York City).

The claimed gold holding locations and summary quantities held appear in a never-changing monthly Treasury report titled “Status Report of U.S. Government Gold Reserve”.

This report states that 4,583 tonnes of US Treasury gold are stored in the US Mint’s bullion depository in Fort Knox, 1,682 tonnes at the West Point bullion storage facility, and 1,364 tonnes in the US Mint facility in Denver, for a total of 7,628 tonnes of gold. The US Treasury further claims that 418 additional tonnes of its official gold reserves are held at the Federal Reserve Bank vault in New York. An additional 87 tonnes, a working stock figure (which never changes), comprises the balance.

While Fort Knox and the NY Fed vaults regularly take the limelight in terms of volume of media coverage, and to a lesser extent the West Point vaults do so also, there is very little if anything devoted to coverage of the US Treasury gold supposedly held in Denver. It is therefore of interest that none other than the US Mint on its own website recently ceased claiming that it stores gold bullion at its Denver facility.

On August 11, 2014, the US Mint’s Denver web page contained the following statement:

“Today, the United States Mint at Denver manufactures all denominations of circulating coins, coin dies, the Denver “D” portion of the annual uncirculated coin sets and commemorative coins authorized by the U. S. Congress. It also stores gold and silver bullion.

Denver Aug 2014
US Mint – Denver page on website August 2014

Less than a month later, on September 8, 2014, the above paragraph had been subtly changed to the following, and the words ‘gold and’ had been removed:

“Today, the United States Mint at Denver manufactures all denominations of circulating coins, coin dies, the Denver “D” portion of the annual uncirculated coin sets and commemorative coins authorized by the U. S. Congress. It also stores silver bullion.

Denver Sept 2014
US Mint – Denver page on website September 2014

The amended wording remains on the Mint’s present day Denver web page i.e. with just the “It also stores silver bullion” sentence.

Denver Aug 2016
US Mint – Denver page on website August 2016

At the very least this change in wording between August and September 2014 is very unusual. Why would the Mint have authorized and made such a wording change and deleted the reference to gold bullion? I asked the US Mint to clarify but the query went unanswered:

Given that the Denver Mint does not produce any gold or silver coins, the Mint does not have a need to store either gold or silver bullion working stock in Denver, so the above wording cannot be referring to metal being stored for fabrication supplies. The only commemorative coin produced in Denver is an uncirculated clad half dollar made of copper and nickel.  While the above change of wording on the US Mint’s website could have an entirely different explanation, it does raise the possibility that there isn’t any US Treasury gold bullion stored in Denver. This possibility would also subscribe to a view that has been expressed for quite some time now by well-known gold author and commentator James Rickards. Since at least 2010, and probably prior to that, Rickards seems to think that the US gold reserves are nearly exclusively stored at West Point and Fort Knox. Some tweets of his illustrate the point:   

This view, that the US gold is kept at West Point and Fort Knox, actually makes quite a lot of practical sense and is entirely logical. It also makes Denver look like the odd man out.

The US Mint facilities at Fort Knox and West Point are located adjacent to US military installations, namely the US Army base, Fort Knox, and the US Military Academy, West Point. The Fort Knox bullion depository, which opened in 1936, was actually built on land that was previously part of the Fort Knox military base, and that had been deeded to the Treasury Department. The West Point bullion facility, which opened two years later in 1938, was built on land formerly occupied by the West Point military facility, and that had also been deeded to the Treasury Department.

Having large quantities of gold stored in facilities next door to US military facilities is a natural security advantage for protection and also as a deterrent against any would be gold heists. In contrast, the US Mint facility in Denver is located on a city block at 320 West Colfax Avenue, between Delaware St and Cherokee St. It’s near a court-house and a police station but no sign of any US military facilities in the immediate vicinity.

Denver 3D
US Mint Denver facility
Denver 3D2
US Mint Denver rear view

The US Mint in Denver is also the odd one out (of the three) in that it offers public tours of the facility, something unheard of at Fort Knox and West Point. Arguably, the NYFed offers a gold vault tour, but out of US Mint facilities that the Treasury claims to store gold at, Denver is the only one with a public tour. The supposed location of the gold vaults in Denver is also a complete mystery with no photos or images of any vaults or contents of vaults (as far as I can see) ever on the web. A review of the Denver Mint tour (here) mentions supposed gold storage in the lower decks of the building but this seems to be merely supposition as it is inferring that 3 gold bars on display in Denver came from the building’s vaults. However, they did not. These three gold bars actually came from West Point, as CoinWeek stated in May 2012:

“Denver Mint plant manager David Croft pointed out that the three bars were shipped in from the U.S. Mint’s working gold supply at West Point and did not come from the gold that is in deep storage in Denver.

Which begs the question, why? The US Mint would probably answer, so as not to ‘break the seals’ on the Denver vault doors, but this shipping of 3 gold bars from upstate New York to Denver would seem completely unnecessary if Denver was storing  a couple of tonnes of gold, let alone 1,362 tonnes. The more accurate answer may be that the US gold, if it even exists to the extent to which the US Treasury claims, is held adjacent to US military bases at West Point and Fort Knox. 

Austrian Mint sells 41 tonnes of gold coins and gold bars in 2015

Earlier this year, the director of marketing and sales at the Austrian Mint confirmed to Bloomberg in an interview that the Mint’s combined gold bar and gold coin sales in 2015 had totalled 1.32 million troy ounces, a 45% increase on 2014, while the Mint’s silver sales in 2015 had reached 7.3 million ounces, a figure 58% higher than in 2014.

Since Münze Österreich, or the Austrian Mint in English, only publishes its annual report in July of each year, we had to wait a few months to see the granular details behind these sales numbers. Now that the Austrian Mint’s 2015 Annual Report has been published, the detailed sales figures are as follows.

Gold Philharmonics – 23.5 tonnes

In 2015, the Austrian Mint sold 756,200 troy ounces (23.52 tonnes) of Vienna Philharmonic gold coins, of which 647,100 troy ounces (20.18 tonnes) were in the form of its flagship 1 oz Vienna Philharmonics, with the remainder comprising ½ oz, ¼ oz, 1/10 oz and 1/25 oz gold Philharmonic coins, as well as a handful of the Mint’s very large 20 oz gold Philharmonics. Gold Philharmonic sales in 2015 were 56% higher than comparable sales of 483,700 ozs in 2014, and were also higher than 2013’s figure of 652,600 ozs.

Vienna coins
Sales of the Vienna Mint’s flagship 1 oz gold Philharmonic accounted for the lion’s share of gold coin sales

Philharmonic gold coin sales in 2015 were the third best year on record, just slightly lower than 2008’s total sales of 795,000 ozs, but still well short of 2009’s bumper sales total of 1,036,000 ozs, when that year’s finanical crisis was in full flight.

Aus AU Phil
Source: www.goldchartsrus.com

Gold Bars – 16.3 tonnes

Turning to gold bars, the Mint sold 524,722 troy ounces (16.32 tonnes) of its branded gold bars in 2015, over half of which comprised sales of 1 kg, 500 gram and 250 gram gold bars. The 2015 gold bar sales were nearly 28% higher than 2014 gold bar sales of 410,300 ozs, but slightly less than 2013’s comparable sales of  711,200 ozs.

Vienna bars
The Mint’s larger bars were the most popular in terms of total gold output

In addition to gold Philharmonic coins and gold bars, the Austrian Mint also produces a series of historic re-strikes of original Austrian circulation gold coins in the form of gold ducats, gold guilders and gold crowns. In 2015, sales of these gold re-strike coins, mostly ducats, accounted for 37,700 troy ounces of gold (1.17 tonnes), which was a 128% increase on the previous year’s sales of 16,500 ozs.

Overall, in 2015, the Austrian Mint sold gold coins (Philharmonics and historic coins) and gold bars containing 1,318,700 ozs (41 tonnes) of gold. In 2015, the gold Vienna Philharmonic’s largest markets were Europe followed by Japan and North America, and notably the gold Philharmonic was the best-selling major gold bullion coin in both the European and the Japanese markets.

Aus AU
Source: www.goldchartsrus.com

Looking at the long-term chart above, you can see that total gold sales (by volume) at the Austrian Mint during 2015 were noticeably higher than in 2014 and approached the gold sales figures of 2013, however they were still below the multi-year high sales figures from 2008, 2009 and 2011. Notice also that for the last 8 years there has been a trend of the Austrian Mint’s gold sales following a high one year, lower the next year pattern, possibly due to risk on / risk off sentiment among gold investors depending on how the general financial markets were performing.

Silver Philharmonics – Strong North American sales

As the Austrian Mint does not fabricate silver bars, the Mint’s silver bullion sales are exclusively from the silver coins it produces, specifically the 1 ounce silver Vienna Philharmonic coin. In 2015, the Mint sold 7.3 million silver bullion coins containing 227 tonnes of silver. The largest markets for the Mint’s silver coin sales in 2015 were North America, followed by Europe. Silver sales in 2015 were also notable in that it was the first time that the Mint’s silver coins sales in the North American market surpassed those in Europe. Looking at a long-term chart of Austrian Mint silver sales, you can see that 2015 was a year of recovery following relatively low sales in 2014, which was partially due to an increase in VAT on silver sales in Germany in 2014.

Aus AG
Source: www.goldshartsrus.com

The Mint’s silver coin range also includes historic re-strikes of a Maria Theresa Taler coin in uncirculated and proof editions. These coins contain 23.39 grams of pure silver (approximately 0.2 tonnes). These coin sales are classified separately from silver bullion coin sales and their sales are quite minimal. In 2015, sales of these Taler coins reached 9,777 pieces, slightly down on 2014’s sales of 11,470 pieces.

Gold Bullion Sales Drove Total Revenues

In terms of Austrian Mint revenues, gold bullion coins (gold Philharmonics) generated revenues of  €788.9 million in 2015, up 70% on 2014’s €464.2 million. Gold Philharmonics were also 48.5% of total Mint revenues in 2015. Gold bar revenues of €547.3 million were 40% higher than in 2014, and accounted for another 34% of all Mint revenues. Silver coin sales in 2015 reached €111.3 million, 58% higher than in 2014. Adding revenues from gold coin re-strikes of €40.4 million, the total revenues from gold and silver coin products reached €1.37 billion, which was 84.7% of total Mint revenues for 2015.

Aus rev
Gold coin and gold bar revenues account for over 80% of  the Mint’s total revenues

In terms of revenues, annual gold sales at the Austrian Mint are far higher than its silver sales. In volume terms, the Austrian Mint also produces more gold products than its counterparts but far less silver products than its counterparts. So the Austrian Mint could be said to be a gold specialist.

For example, in 2015, and just looking at bullion coin sales, the US Mint sold gold bullion coins (American Eagles and American Buffalos) containing 31.8 tonnes of gold, but silver bullion coins (predominantly American Eagles) containing 1,495 tonnes of silver. Likewise, in 2015, the Royal Canadian Mint sold gold bullion coins (gold Maple Leafs) containing 29.6 tonnes of gold, and silver bullion coins (silver Maple Leafs) containing 1067 tonnes of silver.

Based on 2015 volumes sold of 227 tonnes of silver coins and 24.69 tonnes of gold coins, the Austrian Mint had a silver coin sales to gold coin sales ratio of only 9.19, whereas comparable ratios for the US Mint and Royal Canadian Mint were 47 and 36, respectively.

Non-bullion revenue at the Austrian Mint is generated by activities such as producing Euro circulation coins, and producing semi-finished products and medals. Non-bullion revenues accounted for €248 million or approximately 15% of total Mint revenues during 2015. Interestingly though, although the Mint does not report the geographic origin of its revenues on a segmented basis, it does report the share of revenue derived in Austria vs derived outside Austria. For 2015, €1.258 billion in revenue was generated in Austria vs €360.6 million internationally, meaning that international markets contributed only 22.3% of Mint revenues.

Therefore, the domestic Austrian market is still the Mint’s primary market in terms of bullion sales. In one way this is not surprising because the Austrian population has a very strong appetite for gold coin and gold bar products, especially gold products from the Austrian Mint in Vienna. The Mint’s gold coins and bars are sold widely throughout Austria in banks such as Bank Austria, the Raiffeisen banks, the Steiermärkische Sparkasse savings banks and through the Erste Bank und Sparkassen group, as well as through the retail branches of gold bullion wholesalers such as Schoeller Muenzhande, which is a fully owned subsidiary of the Austrian Mint. See BullionStar Gold University’s profile of the Austrian Gold Market for more details on the vast network of Austrian bank and wholesalers that sell physical gold coins and bars.

For further information on the sales patterns of the world’s largest precious metals mints, please see BullionStar blog “Bullion coin sales boost revenues of world’s largest Mints“.