September 25, 2023

Silver Eagle Sales Slower as US Mint Rations Supplies

Sales of the United States Mint’s American Silver Eagle bullion coins were slower in the latest week. However, the slow down seems to be the result of the allocation program currently in place, as opposed to a reduction in demand. Sales for Gold Eagle bullion coins dropped to the lowest weekly total for the year to date.

For the weekly period ending March 9, the US Mint recorded sales of 668,500 of the one ounce Silver Eagles. This compares to 1,509,000 coins sold in the previous week.

Since the start of sales for the 2011-dated coins, the US Mint has carried out sales under their standard allocation program. Rather than accepting unrestricted orders, available supplies of silver bullion coins are rationed amongst the authorized purchasers. As such, sales figures reflect the number of coins that the US Mint is able to produce and make available, as opposed to the level of demand from the market.

There has been anecdotal evidence from bullion dealers indicating demand in excess of the available supplies. This reduced availability has caused premium levels for Silver Eagles to expand at the retail level.

Other world mints have indicated that they have been encountering problems obtaining the silver needed to produce coins and other bullion products. The US Mint has not provided any specific explanations.

US Mint Bullion Coin Program Sales 3/9/2011 (ounces)

Prior Week Month to Date Year to Date
American Silver Eagle 668,500 668,500 10,330,500
American Gold Eagle 12,500 18,500 232,000
America the Beautiful Silver 0 0 0
American Platinum Eagle 0 0 0
American Gold Buffalo 0 0 0

Sales of the bullion Gold Eagles were only 12,500 in the latest week compared to a previous weekly total of 37,000 coins. The demand for physical gold has not been as intense as the demand for silver. Since the start of sales for the 2011-dated coins on January 3, 2011, the US Mint has not used the allocation program.

US Mint Silver Eagle Bullion Coin Sales Jump

The pace of United States Mint gold and silver bullion coin sales picked up in the prior week. The US Mint currently has available one ounce American Silver Eagles in allocated quantities and unrestricted quantities of American Gold Eagles.

The latest available statistics show an increase of 1,509,500 ounces of silver bullion sales. In the previous two weeks, the US Mint had sold 908,000 and 833,500. Although sales show a big increase, it could be higher if not for the US Mint’s allocation program. Authorized purchasers are currently limited in the number of coins that they can order, which means sales are not an indication of the full demand for silver bullion.

American Gold Eagle sales increased by 37,000 ounces since the last report. This compares to sales of 28,000 and 31,500 in the prior two weekly periods. The increased demand comes as the price of gold recently reached a new all time high above $1,440 per ounce. For the past several years the rising price of gold has been accompanied by strong demand for physical gold.

US Mint Bullion Coin Program Sales 3/2/2011 (ounces)

Prior Week Month to Date Year to Date
American Silver Eagle 1,509,500 0 9,662,000
American Gold Eagle 37,000 6,000 232,000
America the Beautiful Silver 0 0 0
American Platinum Eagle 0 0 0
American Gold Buffalo 0 0 0

Year to date US Mint bullion coin sales have now reached 9,662,000 ounces of silver and 232,000 ounces of gold. Both figures represent an increase from the average pace of sales experienced in the prior year.

During 2010, the average monthly sales level for Silver Eagles was 2,888,541 ounces, while the average monthly sales of Gold Eagles was 101,708 ounces.

US Mint Silver Bullion Sales Set Monthly Record

The pace of sales for the United States Mint’s American Gold Eagle and American Silver Eagle bullion coins jumped in the past week. This propelled silver bullion sales far into record territory for the month of January.

In the prior week ending February 2, 2011, the US Mint sold 1,748,000 ounces worth of Silver Eagles and 56,500 ounces of Gold Eagles. These are sizable increases from the prior week, when the pace of sales had slowed considerably.

Currently, the US Mint offers only these two options for precious metals investors. The American Gold Buffalo, struck in 24 karat gold, has been unavailable for several months. The American Platinum Eagle remains on indefinite hiatus since late 2008. The recently introduced America the Beautiful Silver Bullion Coins are now in production for the 2011 designs, following the rapid sell out of the previous year’s coins.

US Mint Bullion Coin Program Sales 2/2/2011 (ounces)

Prior Week Month to Date Year to Date
American Silver Eagle 1,748,000 50,000 6,472,000
American Gold Eagle 56,500 6,000 139,500
America the Beautiful Silver 0 0 0
American Platinum Eagle 0 0 0
American Gold Buffalo 0 0 0

For the month of January 2011, Silver Eagle bullion coin sales reached 6,422,000, representing the highest monthly sales total in the history of the program. The previous monthly record of 4,260,000 ounces was set in November 2010, at the time breaking the long standing record of 3,696,000 ounces from December 1986.

To put this monthly sales total into perspective, there were ten separate years of the program where annual sales did not reach this level. If the pace of sales continues for the rest of 2011, more than 77 million ounces of silver would be sold. This amount exceeds the total annual domestic silver mining production of the United States.

American Gold and Silver Eagle Sales Slower

After generating some mainstream media attention for the record pace of sales, United States Mint bullion coins had a quiet week. According to figures provided by the Mint, only 136,000 ounces of American Silver Eagles and 7,500 ounces of American Gold Eagles were sold in the past week.

Some have noted the divergence in the sales of bullion coins, which are in record territory for the month, and exchange traded fund (ETF) holdings, which continue to decline. Both have an impact on demand for silver, although the nature the of the buyers for each type of investment are different.

Those purchasing ETF’s are more likely to be professionals or other investors trying to participate in short terms price gains. Since bullion coins are comparatively more difficult to buy and sell and carry larger spreads, these buyers are more likely to be making longer term investments.

US Mint Mint Bullion Coin Program Sales 1/26/2011 (ounces)

Prior Week Year to Date
American Silver Eagle 136,000 4,724,000
American Gold Eagle 7,500 83,000
American Platinum Eagle 0 0
American Gold Buffalo 0 0

The US Mint has now sold 4,724,000 of the one ounce Silver Eagles for the year to date. This includes a remaining quantity of 2010-dated coins, as well as the newly released 2011 Silver Eagles. This is the highest monthly sales total in the history of the program.

American Gold Eagle sales total 83,000 for the year to date. This includes sales of 80,500 one ounce coins, 1,000 one-half ounce coins, 2,000 one-quarter ounce coins, and 15,000 one-tenth ounce coins. The fractional weight coins represent 2010 Gold Eagles, while the one ounce coins included 2010 and 2011-dated coins.

US Mint 2011 American Silver Eagles Selling Quickly

United States Mint bullion coin sales remained robust for the two available options. In the prior week, authorized purchasers ordered 1,322,000 ounces of American Silver Eagles and 25,000 ounces of American Gold Eagles.

For bullion coin programs, the US Mint does not sell directly to the public, but distributes the coins through a network of authorized purchasers. A group of 11 primary distributors can order coins in bulk quantities from the Mint based on the market price of the precious metals, plus a mark up. In turn, they resell the coins to other precious metals dealers, coin dealers, and the public, as well as facilitate a two way market for the bullion coins.

The US Mint began sales of 2011-dated Gold and Silver Eagles on January 3, 2011. Because inventory of 2010-dated coins remained, the Mint required authorized purchasers to order the newer coins on a ratio basis. For every five 2011 Silver Eagles ordered, they were required to take one 2010 Silver Eagle. For Gold Eagles, the AP’s could order four 2011 coins for every one 2010 coin.

At this time, the US Mint only has available one ounce 2011 Gold Eagles, with fractional weight coins planned to be issued later in the year. The American Silver Eagle is only produced in one ounce size. The release dates for the 2011-dated American Platinum Eagle and 24 karat American Gold Buffalo coins have not yet been announced.

So far, the month of January 2011 is shaping up to be a strong one for silver bullion sales. The past week’s orders for 1,322,000 ounces, bring the monthly (and year to date) total to 3,407,000. In January 2010, the US Mint had sold 3,592,000 ounces for the entire month.

US Mint Mint Bullion Coin Program Sales 1/12/2011 (ounces)

Prior Week Year to Date
American Silver Eagle 1,322,000 3,407,000
American Gold Eagle 25,000 43,500
American Platinum Eagle 0 0
American Gold Buffalo 0 0

US Mint Sells Record 34.6 Million Silver Eagle Bullion Coins

Demand for physical precious metals continues to drive United States Mint bullion sales to new heights. The American Silver Eagle bullion coins sold a record 34,662,500 coins during 2010.

The previous record for annual sales was achieved in 2009 when 28,766,500 coins were sold. This sales level was surpassed in November of this year, so the only question was how far into record territory sales would eventually extend. The final numbers for 2010 represent a rise of 20.50% from the previous record.

Each American Silver Eagle bullion coin contains one troy ounce of .999 fine silver. The coins have been offered by the United States Mint annually since 1986. By law, the coins must be issued in quantities needed to meet public demand, which means that production fluctuates from year to year to meet this target. At some times during the past three years, production has fallen short of meeting full demand, which has necessitated sales suspensions and rationing programs.

From the start of the program in October 1986 through December 31, 2010, total Silver Eagle bullion sales have reached 241,277,000.

Today, the US Mint began accepting orders from authorized purchasers for 2011 Silver Eagle bullion coins. According to the US Mint’s website, opening orders total 1,696,000, although this might include some remaining 2010-dated coins.

2010 Proof Silver Eagle Sales Begin

For the first time in more than two years, Proof Silver Eagles are available for purchase from the United States Mint. In recent years, the availability of the collector coins has been prevented by the high demand for physical precious metals.

The US Mint produces American Silver Eagles for both precious metals investors and collectors. The bullion version of the coin is distributed through a network of authorized purchasers, who are able to purchase the coins based on the market price of silver plus a specified premium (currently $2.00 per coin). The authorized purchasers then resell the coins to other bullion dealers and the public, as well as create a two way market for the coins to ensure liquidity. By law the US Mint is required to issue the bullion coins in quantities needed to meet public demand.

The collector versions of the coin are sold by the US Mint directly to the public. Traditionally, a proof version of the coin has been offered to collectors each year. For various occasions, collectible Silver Eagles have also been incorporated into various numismatic products. More recently, a collectible uncirculated version of the coin was offered. Silver Eagles produced for collectors have been offered at fixed prices, generally reflecting a large premium above the value of the silver content. There is no legal requirement for the US Mint to produce or issue collector coins.

Proof Silver Eagles were last available in August 2008. After that point sales of the 2008-dated coins were suspended, never to be resumed. In the following year, the offering was long delayed and eventually canceled. Due to high demand for the bullion version of the coin and the US Mint’s legal requirement to meet public demand, during this period silver planchet supplies were used exclusively to strike bullion coins for this extended period of time.

This year, the US Mint managed to reconcile their legal obligation to precious metals investors and their traditional obligation to coin collectors and sell a record number of bullion coins and offer the collector coins.

The 2010 Proof Silver Eagles are priced at $45.95 each. A limit of 100 coins per household has been imposed by the US Mint for at least the first week of release. Order fulfillment is expected to begin by December 1, 2010.

Will the US Mint Resume Silver Eagle Rationing?

During the course of the past several years, the United States Mint has implemented a rationing program for their popular American Silver Eagle bullion coins at times when demand has exceeded the available supply. Will a recent surge in demand for silver bullion cause them to reinstate the program?

The euphemistically titled “allocation program” was last implemented for Silver Eagles in December 2009. This followed a brief sales suspension during the last few days of November. At the time, the price of silver had been moving steadily higher, supporting increasing interest in precious metals investment. The US Mint experienced a slow month of silver bullion sales in September, followed by increasing demand in October and November leading up to the suspension and ensuing allocation program, which remained in place until this September.

During the past few months, the situation is shaping up to be eerily similar. In September 2010, the US Mint sold 1,880,000 ounces of silver bullion, which represented the lowest monthly sales of the year. In October, sales rebounded strongly to 3,150,000 ounces. For the current month date, sales have already exceeded this amount, measuring 3,175,000.

With the month a little more than half over, the total seems poised to set a new monthly sales record. The current record is 3,636,500 ounces achieved earlier this year in May. Annual sales are already in record territory.

Bullion sales have been rising against a backdrop of steadily rising silver prices. Since the end of September, the silver price has increased from $22.07 to $26.57, representing a gain of more than 20% in less than two months. Reports of tightening supplies or shortages for other silver bullion have also been reported. This may explain the recent move towards the higher premium bullion coins.

The American Silver Eagle is currently the only silver bullion product offered by the United States Mint. A second program known as the America the Beautiful Silver bullion coins has been scheduled to launch this year, but a release date has not yet been specified.

American Silver Eagle Bullion Sales Break Record

Sales of the United States Mint’s American Silver Eagle have just moved into record territory. The most recent available sales figures show a total of 28,885,500 of the one ounce coins sold for the year to date. This edges out the annual record sales achieved in the previous year when 28,766,500 coins were sold.

With nearly two months left in the year, the final total for 2010 seems likely to beat out the old record by a comfortable margin. During the first ten months, average monthly sales have been 2,863,050, suggesting full year sales of around 34 million.

2010 American Silver Eagle Sales (through 11/5/2010)

January 3,592,500
February 2,050,000
March 3,381,000
April 2,507,500
May 3,636,500
June 3,001,000
July 2,981,000
August 2,451,000
September 1,880,000
October 3,150,000
November 255,000
Total 28,885,500

On an historical basis, sales levels for the American Silver Eagle have been immense during the past three years. This has frequently resulted in the US Mint suspending or rationing the available supply of coins. It has also resulted in the cancellation of certain collector versions of the coin.

As an interesting point of reference, the lowest annual sales total for the bullion offering was 3,466,000, achieved in 1996. This year monthly sales exceeded this amount on two separate occasions.

US Mint Changes Rules for Authorized Purchasers

The United States Mint recently revised the requirements to become an Authorized Purchaser for their American Eagle Gold and Silver bullion programs. Since the start of the program, the US Mint has used an authorized purchaser network to distribute the coins to the public.

These Authorized Purchasers are the only ones allowed to buy bullion coins directly from the United States Mint. They purchase the bullion coins based on the market prices of the metals plus an established premium. The premiums are currently $2 for Silver Eagles and 3%, 5%, 7%, and 9% for one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce Gold Eagles. Authorized purchasers are also required to create a two way market for the coins to ensure liquidity for US Mint bullion coin investors.

There are currently eight authorized purchasers for gold and twelve for silver.

Changes to the requirements recently made effective included modifications to the sections “Purpose”, “Marketing Support”, “Experienced Market Maker”, and “Tangible Net Worth”. The most significant change was the addition of a new section “Right to Temporarily Refrain from the Review of New Applications.”

The new section states the following (emphasis added):

The United States Mint reserves the right to temporarily refrain from the review of new AP applications during periods in which the allocation of any bullion product is required. The temporary refrain period will continue until a minimum of nine months after all allocations have been lifted, but no more than one year after all allocations have been lifted.

For more than two years the US Mint has continually resorted to their allocation program (rationing) in times when gold and silver bullion demand has spiked. From 2008 to 2010, Silver Eagles have spent more time under allocation than not, with the program implemented February 2008, lifted in June 2009, reinstated in December 2009, and lifted in September 2010.

Under the newly established rules, the US Mint can refrain from considering applications of potential new authorized purchasers until at least June 2011. During this time, if another demand spike necessitates the use of the allocation program, the clock starts again, but only after allocation has been lifted. Given the pattern of the past two years, the period of refrain could last indefinitely.

By law the US Mint is required to supply American Gold and Silver Eagles in quantities sufficient to meet public demand. In reality, the supply of coins is limited based on the number of planchets the US Mint can obtain from foreign suppliers, and distribution is limited based on the small number of authorized purchasers and the new hurdles placed before potential applicants.