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Platinum Eagles soar

6 May 2020

Reverse of the 2020 American Eagle platinum 1oz bullion coin

Demand for American Eagle platinum bullion coins reaches its highest level for 21 years

Launched in 1997, American Eagles are the US’s official platinum bullion coins and the only platinum bullion coins of which the weight, content and 99.95 per cent purity are guaranteed by the US government.

All American Eagle platinum coins are legal tender – and the 1 oz coin, which since 2014 is the only size issued, has a US$100 face value although, in practice, the coins are not used in circulation.

Obverse of the 2020 American Eagle platinum 1oz bullion coin

The US Mint issues 1 oz American Eagle platinum bullion coins in response to ongoing investor demand. This year’s mintage, however, has been extended due to exceptional demand from investors seeking to own physical platinum in the wake of the COVID-19 pandemic.

Cumulatively, by the end of April, sales of the 1 oz platinum Eagle in 2020 had already reached 56,500 oz, a figure that is close to exceeding the 1999 annual total of 56,707 oz – the second highest on record (beaten only by the 133,002 oz  sold in 1998).

The price consumers pay for American Eagle platinum bullion coins includes various factors: their weight in platinum, based on the prevailing spot market price, plus a premium to reflect minting; distribution and marketing costs; and investor demand.

The soaring demand for precious metal coins in March and April this year, together with constrained distribution, has lifted this premium to four times its typical level for gold and platinum, and nearly three times for silver.

Why platinum bullion?

Platinum Eagles are often purchased by investors seeking an easy – and accessible - way of adding physical platinum to their investment portfolios. In the current environment, investors are turning to hard assets like platinum bullion to mitigate against the significantly increased global risk associated with the unfolding economic impact of the pandemic. The recent fall in the price of platinum brought about by financial markets’ reaction to the crisis has also proved to be an entry point for some investors.

Platinum bullion coins are attractive to investors seeking portfolio diversification as well as a long-term store of value. There can be tax benefits too, as sales of legal tender platinum bullion coins are not subject to capital gains tax in the UK, for UK residents. In the US, platinum bullion can be held as an asset as part of a retirement portfolio.

Contacts:

Brendan Clifford, Investor Development, [email protected]
Trevor Raymond, Research, [email protected]
David Wilson, Research, [email protected]
Vicki Barker, Investor Communications, [email protected]

WPIC does not provide investment advice.
Please see disclaimer for more information.