For the second time in 30 days, evidence of a silver shortage is presenting itself. Back in December, we questioned whether there would be a shortage of Silver Eagles when the U.S. Mint sold out of its 2012 coins and informed authorized purchasers that there would be no more production or delivery.
Well, it appears that brisk sales of 2013 Silver Eagles has resulted in the exact same thing for the 2013 coins. At the time of the 2012 notice, dealers began taking pre-orders for 2013 coins, with notice that delivery would begin around January 20th of this year. A shortage for new 2012 Eagles resulted in some dealers lifting premiums and others directing buyers directly to their 2013 Eagle pre-order pages.
Authorized purchasers have been informed that the mint will not be able to deliver additional 2013 coins until around January 28th. We would indeed define this as a developing shortage. The simple fact is that demand for both 2012 and 2013 silver eagles have outpaced production twice now inside of 30 days. The U.S. Mint apparently can’t keep up with demand, which has been heavy. According to CoinUpdate.com:
“On the first day of availability for 2013-dated Silver Eagles, authorized purchasers had placed orders for 3,937,000 of the one ounce coins. This seemed to mark the highest one-day sales in the entire history of the program. The strong demand has continued with sales now having reached 6,007,000 according to the latest information posted on the Mint’s website.”
As the most popular silver bullion coin, a shortage in Eagles is going to eventually spill over into other forms of bullion. Premiums on Silver Eagles have already started going up. Bars and Rounds can’t be far behind, especially if we see investor demand pick up in the current precious metals rally.
This development, along with increasing Central Bank demand for its gold bullion from New York, is going to begin raising awareness as to how tight supply in the precious metals markets truly is, and we could at some point see physical silver and gold break away from paper prices in a dramatic fashion. Spot Silver has had a nice rally over the past few days and if delivery demand begins to increase, shorts are going to be in for a real pickle.
Physical is still available at online silver dealers, but premiums are drifting higher (and this is most evident in the Eagle right now). Unlike our note on the mint selling out of 2012 coins in December, we won’t assure those still needing to add to their stack that there is no need to panic. A lot of events are conspiring to suggest silver may soon launch higher. Right now, PMBull suggests looking at Canadian Maple Leafs, bars or rounds as an alternative during this temporary mint delay. They will get you more silver for your dollar.
Now we are getting somewhere. Premiums on 2013 Silver Eagles have come back down to something more reasonable today. Plus, spot prices dipped today as well. A lower spot price, combined with lower premiums, means a more significant reduction in price for the most popular silver coin. See PMBull’s Physical Silver Bullion page for a coupon code to shave an additional $1.00 per coin off the already low prices provided by GoldAndSilverOnline. After the PMBull reader discount, their prices are as low as we can find, at any quantity (i.e. no minimums – you don’t have to buy a Monster Box to get the lowest price).
The discount code with this dealer has ended, but premiums have come back down and prices have been lowered, so all in all, Silver Eagles can now be had at a more reasonable rate.
Ok, dealers are stepping up to establish new clients. See our Physical Silver Guide for a discount code that can be applied during checkout at GoldAndSilverOnline. This discount code will provide an additional $1.00 per coin discount on 2013 Silver Eagles, off their already low price. As best as we’ve been able to determine, this results in the lowest possible Eagle price at the current time, and there are no minimums required. If looking to grab a tube or two of Silver Eagles, this most certainly the way to do it!
Really, there is no reason right now to pay up for Eagles. They are beautiful coins, highly trusted, and perhaps the most popular silver to own, but right now, they are commanding $4.00 to $5.00 premiums out there. The same dealers offer rounds and bars and Canadian Maple Leafs for significantly lower premiums at the moment, which quite simply, will get you more ounces per dollar. I suppose that somebody into numismatics might be able to argue that these coins are likely to command a higher premium in the future, especially if the US Mint suspends production altogether due to a true silver shortage, but under those conditions, I doubt that there will be new collectors of coins to add a numismatic premium. No, pure silver bullion would make more sense, would it not?
It would seem that Maple Leafs are following the Eagle lead as I’ve noticed a gradual jump in their premiums as well over the past 24 hours…so I’m just going to keep looking elsewhere.
Yes, perhaps the Canadian Maple Leaf premiums are rising too, but as of now, they are $1.24 lower per coin than the U.S. Eagles on our Physical Silver page. That’s nearly 4% less. Those not concerned with the format of their silver and who are simply looking for more ounces of silver per dollar should turn their attention to the 10 Ounce Silver Bars, where you will save an additional 10% over the U.S. Eagles. That is a big difference in premium! As stated above though, a lot of the additional premium on the coins will remain at the time of sale, and some will speculate that premiums on the coins will actually rise over time. That’s fine, but this site primarily concerns itself with silver as a commodity and not as a numismatic endeavor, which is something different altogether.
Bilbo, you showed some foresight here. It has come out that they will be rationing Maple Leafs in Canada as well. This, combined with the U.S. Mint selling out, is further evidence that a real shortage in Silver is developing. If the mints can’t produce enough bullion coins to meet demand, what does that tell us? Demand is greater than supply. Perhaps this is just a temporary silver shortage, but what if it isn’t? For those who like to stack on a regular basis, accelerating purchases might be a wise idea. There is plenty of chatter in other forums that suggest local dealers have been running low on other forms of silver, including pre-65 coins, bars and round. We will have to wait and see if other forms begin to disappear at the online dealers too.