May 23, 2024

Silver Eagle Demand Soars – U.S. Mint Sold Out

Demand for the United States Mint’s American Silver Eagle bullion coins has been off the charts since the beginning of the year.  After running out of the silver bullion coins last year, 2013 opening day sales of the Silver Eagles were the largest on record with sales of 3,937,000 coins.   First day sales of the silver coins amounted to an astonishing 12% of last year’s total sales of 33,742,500 coins.

Coin Update reports on the rush to Silver Eagles and the likelihood of product allocation once the U.S. Mint is able to catch up with demand.

The US Mint expects the temporary sell out of the 2013-dated coins to last until on or about the week of January 28, 2013. At that point, sales will be resumed under an allocation process. During previous periods of strong demand for gold and silver bullion coins, the Mint has used an allocation process to ration available supplies amongst their primary distributors.

Periodic suspensions and rationing of Silver Eagle bullion coins had become almost commonplace between the years of 2008 and 2010. This situation would led to the cancellation of collector versions of the coins in 2009 and a 2010 Congressional hearing which highlighted the inefficiencies of the Mint’s bullion coin programs. The Mint managed to work its way out of these problems by implementing process improvements at the West Point Mint, increasing the number of precious metals blank suppliers, and adding supplemental Silver Eagle production at the San Francisco Mint, while at the same time demand for silver bullion coins had lessened. For much of 2011 and 2012, the Mint had managed to keep up with demand for their bullion coins and had resumed the traditional numismatic offerings.

The past month seems to be a return to the times of old. The US Mint has not been able to keep up with higher levels of demand, and once again resorted to sales suspensions and rationing as they try to catch up.

Sales of the American Silver Eagle bullion coins has climbed steadily since 2007.  Although total sales for 2012 were below the prior year’s total, they might have hit record highs except for the fact that demand depleted the Mint’s supply of the coins in mid December.  Investors who have steadily accumulated the silver bullion coins are sitting on huge gains, with silver up by double digits for seven of the last ten years.

Investors have purchased almost a quarter billion Silver Eagles since 2000.  The total value of the beautiful one ounce coins are now worth over $7 billion dollars at current market prices.

Late Note:

The premium on the Silver Eagles has increased dramatically after the U.S. Mint announced that it was sold out. Yesterday, one of the dealers I purchase bullion coins from was pricing the 2013 Silver Eagles as low as $2.69 over spot – today the price is $3.99 over spot – a huge increase of 48%.

New Gold and Silver Baseball Commemorative Coins Highlight Lack Of Innovation By U.S. Mint

How Congress Stifles Innovative Coin Designs By U.S. Mint

Ever wonder why the U.S. Mint shows a lack of innovation in coin design compared to other world mints?  Here’s part of the reason as detailed by Mint News Blog:

Many coin related bills are introduced each year, but only a small number become law. In order for a bill to become law, it must be passed by both the House and Senate and then signed into law by the President. Under Congressional rules, two-thirds of each body must co-sponsor a bill before it is even put up to a vote, which is the hurdle that many bills cannot meet. Another rule limits the number of commemorative coin programs to only two per year.

The most recent bill to become law was the National Baseball Hall of Fame Commemorative Coin Act. The bill H.R. 2527 was introduced on July 14, 2011, passed in the House of Representatives on October 26, 2011, passed by the Senate on July 12, 2012, and signed by the President on August 3, 2012.

The program calls for the minting and issuance of up to 50,000 $5 gold coins, 400,000 silver dollars, and 750,000 clad half dollars in recognition and celebration of the National Baseball Hall of Fame. These coins will be issued only during the one-year period beginning on January 1, 2014.

Mint New Blog goes on to discuss how the coin design will be unique with the reverse of the coin made convex and the obverse concave to enhance the resemblance to a baseball.  The coin may resemble a recently produced dome shaped coin issued by the Royal Australian Mint as shown below.

The commemorative baseball coin would represent the first innovation in coin design by the U.S. Mint since 2000 when the Library of Congress $10 coin was produced, which was the first and only US Mint bimetallic coin.  While the new baseball coin will certainly increase public interest in precious metal coins, Congress should grant the U.S. Mint more latitude to produce a wide variety of innovative coins without an onerous legislative process.