Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
What to Expect at a Critical Stock Market Point: End of a Wave 2 Rally - 25th May 18
Merlin Passes Top Tips for Buying and Using Premium vs Standard, Theme Parks UK - 25th May 18
Trump “Victories” on Trade are Anything But - 25th May 18
Crude Oil: It’s Here! - 25th May 18
Stock Market Distribution Pattern Revealed - 25th May 18
Stock Market Topping - Everything Looks Rosy at the End of a Trend! - 25th May 18
Trump Puts North Korea Nuclear WAR Back on Track as Plans for Nobel Peace Prize Evaporate - 25th May 18
Insane EU GDPR SCAM Triggers Mass Email Spam Attacks! - 24th May 18
Stock Market Higher Again, but Still No Breakout - 24th May 18
Study: Slowing Global Economic Growth IS NOT Bearish for U.S. Stocks - 24th May 18
What if This Week’s Rally in Gold is Already Over? - 24th May 18
EUR/USD – Reward for Bears - 24th May 18
5 Terrible Trading Mistakes That Rookie Investors Keep Making - 24th May 18
More Clarity for the Short Term for Bitcoin Price - 22nd May 18
Study: A Rising and Strong U.S. Dollar Isn’t Consistently Bearish for the Stock Market - 22nd May 18
Gold, Silver & US Dollar Updates with Review of Latest COTS - 22nd May 18
Upside DOW Stock Market Breakout May Be Just the Beginning - 22nd May 18
5 Reasons Why Forex Trading Is Becoming Such A Big Deal In SA - 22nd May 18
Fibonacci And Elliot Wave Predict Stock Market Breakout Highs - 21st May 18
Stock Market Ideal Cycle Low Near - 21st May 18
5 Effects Of Currency Fluctuations On The Economy - 21st May 18
Financial Conditions are Still too Easy for the Stocks Bull Market to End - 21st May 18
US Stock Market Elliott Wave Predictions for 2018 and Beyond - 20th May 18
Are You Still Fearful of Cryptos? - 20th May 18
US Stocks - Why I am Short-term Bearish, Medium-term Bullish - 20th May 18
Looking for a Turn in Gold Price - 20th May 18
GDX Gold Mining Stock Fundamentals 2018 - 19th May 18
Semiconductor Stock Market Canaries: Chirp, Warble… Soon a Croak and Silence? - 19th May 18
Three Drivers of Gold Price - 18th May 18
Gold Market in First Tertile of 2018 - 18th May 18

Market Oracle FREE Newsletter

Trading Lessons

U.S. Mint Suspends Sales of Silver Eagles

Commodities / Gold and Silver 2011 Mar 03, 2011 - 03:09 AM GMT

By: Jason_Hamlin

Commodities

Best Financial Markets Analysis ArticleThis news was initially reported by Patriot News Radio, which you can listen to in this video clip. While the information is true and current as displayed on the U.S. mint page here, it is not anything new. The Mint has not sold uncirculated American Eagle silver coins directly on their site for two years, but has continued minting “bullion coins” that are distributed to dealers.


I called the U.S. Mint and they confirmed that they did not produce American Eagle Silver Uncirculated coins in the past two years and thus far in 2011 have no plans to re-start production. They also clarified that they are still producing proof Silver Eagle coins, but they have numismatic value and carry a much higher premium.

While the hype and rumors are misleading, I think the takeaway is still the same – physical buying is overwhelming supply. Strong demand for Silver Eagles pushed sales to an all-time record of 6.4 million ounces during the month of January. This number is 50% higher than any prior month in the U.S. Mint’s 26 years of published sales history. The latest data also shows that February sales set another all-time record for that particular month and the 7th highest monthly sales ever.

But the truly significant point, as discussed in the last edition of the Gold Stock Bull newsletter, is that those 6.4 million coins represent nearly 20% of total domestic mine supply. The US mines only about 40 million ounces a year. If sales continue at this pace, 100% of all silver mined will be exhausted by Summer on just this one product, which typically represents only 5% of total silver usage.

U.S. law requires that the mint use domestic supply for gold coins and this is thought to also apply to silver, although there is some ambiguity. So either Congress will need to pass a new law to allow the American Silver Eagle to be struck from foreign mined silver or they will run out of silver supply for minting. Here is the current message on the Mint’s website regarding uncirculated American Silver Eagles:

Production of United States Mint American Eagle Silver Uncirculated Coins continues to be temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Until recently, all available silver bullion blanks were being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”

Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin.

However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.

The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.

So far they have not been able to acquire the necessary inventory, now running into the third year of this issue. The problem with this excuse is that the Mint could procure “sufficient inventories of silver bullion blanks” if they were willing to pay a higher price. And as others have pointed out, by stopping the production of US Silver Eagle Coins, the Mint is in violation of Public Law 99-61 which requires them to produce these coins “in quantities sufficient to meet public demand . . . ”

Continued shortages are likely to send premiums on Silver Eagles soaring, particularly if the Mint has to stop production at some point. Despite silver breaking out to 31-year highs, it still has much further to go. It has yet to reach its nominal high around $50 or inflation-adjusted high around $150. If you haven’t secured physical silver in your possession, you might want to get on it while you still can.

By Jason Hamlin

http://www.goldstockbull.com/

Jason Hamlin is the founder of Gold Stock Bull and publishes a monthly contrarian newsletter that contains in-depth research into the markets with a focus on finding undervalued gold and silver mining companies. The Premium Membership includes the newsletter, real-time access to the model portfolio and email trade alerts whenever Jason is buying or selling. You can try it for just $35/month by clicking here.

Copyright © 2011 Gold Stock Bull - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules