Booming Silver Demand Spurs Sales Of American Eagles Silver Coins To Record High

Includes: PSLV
by: Moneyline

With nearly two months to go in 2013, the U.S. Mint already has surpassed the 2011's all time high record sales of 39,868,000 ounces in American Eagle Silver Bullion Coins. Total sales for the year 2013 to date have now reached 40,175,000 ounces. Sales of the United States Mint's American Eagles Silver coins moved into record territory yesterday after authorized purchasers ordered their full weekly allocation of 500,000 coins. With sales averaging over 3.97 million ounces per month this year, American Eagle Silver Coins sales through 5th November totaled 39,675,500 compared to 33,742,500 for all of 2012. The American Eagle Silver Bullion Coin enjoys a dominant market share worldwide. I had alerted several times in my articles earlier also about the same - While Gold Demand Slips, Soaring Silver Demand Indicates Higher Prices. While the price of gold continues to trade at levels that puts gold bullion coins out of the reach of many investors, silver remains relatively affordable. Add to this the American Eagle Silver Bullion Coin's unique backing by the U.S. Government and its beautiful and uniquely American design and you can see why demand for these coins has continued to grow."

At the average of current pace of sales, silver bullion coins may reach a minimum of around47.5 million ounces. But if we also take into consideration the addition of investments flowing into silver after rising interest rates and bond yields have been seen, the number could very well cross the 50 million ounce mark for 2013.

The numbers today are proving that my views were right on track. Moreover, the seasonally favorable months for sales of precious metals are September to December. If that proves true this year, the 50 Million mark for silver sales by the U.S. Mint alone will be more that surpassed.

Physical Silver demand at an all time high -

Demand for the one ounce silver bullion coins has been intense throughout the entire year. When sales for the 2013-dated coins began on January 7, 2013, opening day orders totaled 3,937,000 coins, which seemed to represent the highest ever one-day sales for American Silver Eagles. After only ten days of sales on January 17, the U.S. Mint was forced to announce a temporary sell out as their entire inventory had been depleted. Sales were resumed on January 28, subject to an allocation process which rationed available coins amongst authorized purchasers. The U.S. Mint uses this allocation process in times when demand for bullion coins exceeds the available supply. Authorized purchasers have been informed that the U.S. Mint plans to have inventories of 2013-dated American Gold Eagle and American Gold Buffalo bullion coins available going into the month of December.

Silver Eagle bullion coins have remained subject to allocation for the entire year. As such, sales figures are not a reflection of full market demand for the coins, but rather a reflection of the U.S. Mint's production capacity. During the current year, Silver Eagle bullion coins have been struck at both the West Point and San Francisco Mint facilities in an effort to expand the supply of coins available to the market.

With a potentially wider gap in availability for the popular silver coins, the U.S. Mint may see even more intense demand for the 2014-dated release. The 2014-dated Silver Eagle bullion coins will not be available to order until Monday, January 13, 2014. The initial release will be subject to the U.S. Mint's allocation program, which rations supplies amongst the authorized purchasers. The situation for American Silver Eagle bullion coins differs from the prior year. Authorized purchasers will be offered the last weekly allocation of 2013-dated coins on Monday, December 9, 2013. With demand continuing to run ahead of the available supplies, the allocation will likely be quickly depleted.

The U.S. Mint's Monthly Sales of Silver for 2013:

Month Silver Ounces
JAN 7,498,000
FEB 3,368,500
MAR 3,356,500
APR 4,087,000
MAY 3,458,500
JUN 3,275,000
JUL 4,406,500
AUG 3,625,000
SEP 3,013,000
OCT 3,087,000
Till 12th NOV 1,000,000
TOTAL 40,175,000

The U.S. Mint's Annual Sales of Silver from 2001 till Nov 12, 2013:

Year Silver Ounces Monthly Avg.
2001 8.827.500 735,625
2002 10,475,500 872,958
2003 9,153,500 762,791
2004 9,617,000 801,416
2005 8,405,000 700,416
2006 10,021,000 835,083
2007 9,887,000 823,916
2008 19,583,500 1,631,958
2009 28,766,500 2,397,208
2010 34,662,500 2,888,541
2011 39,868,500 3,322,375
2012 33,742,500 2,811,875
2013 40,175,000 3,977,700

Figures above are in Silver ounces. Data source: U.S. Mint

Sales of silver in Nov till the 12th, 2013 have been 1,000,000 ounces.

The U.S. Mint's sales Silver Gold ratio:

Month Gold Ounces Silver Ounces Ratio of Silver Oz bought per Gold Oz
JAN 150,000 7,498,000 49.98:1
FEB 80,500 3,368,500 41.84:1
MAR 62,000 3,356,500 54.13:1
APR 209,500 4,087,000 19.50:1
MAY 70,000 3,458,500 49.40:1
JUN 57,000 3,275,000 57.45:1
JUL 50,500 4,406,500 87.25:1
AUG 11,500 3,625,000 315.21:1
SEP 13,000 3,013,000 231.76:1
OCT 48,500 3,087,000 63.64:1
Till 12thNOV 19,000 1,000,000 58.82:1
TOTAL 771,500 40,175,000 52.07:1

Figures above are in ounces and not in the number of coins sold. Data source: U.S. Mint

Perth Mint Bullion Sales in Troy Ounces for 2013

Month Gold Silver
JAN 65,683.71 670,544.36
FEB 44,048.62 426,319.29
MAR 50,356.16 408,178.52
APR 111,505.06 1,102,465.96
MAY 86,983.54 587,454.82
JUN 47,047.83 588,630.13
JUL 56,488.25 697,247.39
AUG 30,430.10 691,258.63
SEP 68,488.06 961,977.07
OCT 77,255.18 821,579.77
Total YTD 638,286.51 6,955,655.94

Data Source

Advances of Silver in Industrial Applications

In the latest Silver Institute newsletter, several advances have been reported when it comes to applications of silver in industry. In particular, the industrial applications are in the field of photography (first article), bio-batteries (second article), clean energy (third article) and energy (fourth article).


Expect Silver Prices to also breach all expectations soon

Silver remains well below its record inflation adjusted high in 1980, it's important real record high of over $140/oz. The gold silver ratio is likely to trend lower and revert to its long term average and its geological ratio of 15 to 1 as a huge amount of silver has been used in industrial applications in recent years. Silver above it's real record high in 1980 seems likely due to increased industrial, investment and, potentially most importantly, store of value demand for what remains a very rare precious metal in a time of universal currency debasement.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. I am long in silver and hold substantial (physical) silver bullion. Willing to buy more for the long term at any price dips.