Debt Downgrade Looms, Gold & Silver Bullion Coin Sales Surge

Now it seems a deal has been reached. But, has the damage been done? After all, Fitch credit rating has put the US on credit rating watch negative.

The government failure did not sit well with Fitch.  While the US still has AAA, it certainly seems the seeds have been sowed for an immediate future downgrade.

“The U.S. authorities have not raised the federal debt ceiling in a timely manner before the Treasury exhausts extraordinary measures,” the ratings wrote in a statement.

“The U.S. Treasury Secretary has said that extraordinary measures will be exhausted by 17 October, leaving cash reserves of just USD30bn. Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”

The last time the US’s credit rating met headwinds was in July 2011. Gold increased considerably on the news, before floating back downwards.

On Tuesday, sales of United States Mint bullion coins increased considerably. The single day of sales on Tuesday surpassed last week’s total of coin’s sold.  American Gold Eagles have sold 22,000 ounces for October, and so therefore are already well above sales of 13,000 ounces in September and 11,500 ounces in August.

The sales increase in American Silver Eagles is higher than the prior weekly totals going back to the end of August. They remain on an annual record pace.

American Gold Buffalo coins at 10,000 for October have matched sales from the two prior months.

So, it seems, gold and silver  buyers have taken notice. But, when will the markets?