May 28, 2024

2010 Proof Silver Eagles at Risk of Cancellation

One of the consequences of the record pace of United States Mint silver bullion coins might be the cancellation of the popular Proof American Silver Eagle for the second year running.

The Proof Silver Eagles have been issued each year from 1986 to 2008. During this period, the coins have sold between 372,168 and 1,092,477 coins per year and had firmly established itself as one of the United States Mint’s most popular products.

2009 Proof Silver Eagle (not issued)

The offering was abruptly canceled for 2009 to the dismay of many collectors. The US Mint explained that it was legally required to produce the bullion version of the American Silver Eagle in quantities sufficient to meet public demand. They were not under any legal requirement to produce the collectible proof or uncirculated versions of the coins. Because demand for silver bullion coins apparently outweighed production, the US Mint sourced all incoming blank supplies towards the production of bullion coins.

The announcement of last year’s cancellation came by way of a press release issued October 6, 2009, which highlighted the two collectible precious metals offerings that would be available in 2009, before enumerating the long list of products which were canceled. As if in validation of the high demand for US Mint bullion Silver Eagles, in late November the US Mint was forced to temporarily suspended sales of bullion coins after inventories were depleted.

During 2010 to date, Silver Eagle bullion coin sales are running at a higher pace than the prior year. An average of 3,028,083 ounces have been sold per month this year, compared to an average of 2,397,208 ounces per month last year. Demand shows no signs of abating, as investors continue to buy every silver bullion coin the US Mint can produce.

The US Mint recently unveiled a numismatic product release schedule for the remainder of 2010. The 2010 Proof Silver Eagle and most other precious metal products were conspicuously listed as “TBD.” The Mint is still preserving some hope that these coins may be issued, but the situation looks rather bleak.

Why can’t the United States Mint produce bullion coins in sufficient numbers along with the traditionally issued collectible precious metals products? Is it the result of the onerous requirement that precious metals must be sourced from newly mined domestic sources? Is there a lack of manufacturing capacity? Or is it a case of managerial incompetence?

The same excuse of blaming “unprecedented demand from investors” is getting a bit old after two years.