Silver Coins Sell Out on High Demand

2013 American Eagle Silver Coins Temporarily Out of Stock

By Swagato Chakravorty
Monday, January 21st, 2013

Strong investor buying—the highest in five years—has caused the U.S. Mint to run out of 2013 American Eagle silver coins. It is expected that the mint will resume sales on January 28 or thereabouts after restocking.

The iShares Silver Trust (NYSE: SLV) holdings increased to 571.6 metric tons as of January 16, which is an increase of around $584 million.

Meanwhile, worldwide silver ETP assets rose to $20.1 billion in the face of central banks across the world standing behind stimulus actions to promote market growth. Precious metals are increasingly seen as a safe hedge against the devaluation of currency and rapid inflation that could result from such stimulus actions. Silver benefits particularly due to its wide industrial applications.

From Bloomberg:

“With silver, you can benefit from both sides: its safe- haven status and the fact that it’s also an industrial commodity,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “Given some positive leading indicators, especially in the U.S., investors would probably prefer turning to silver rather than to gold.”

Thus far in January, the U.S. Mint has sold 6.01 million ounces of American Eagle silver coins, compared to December’s 1.64 million ounces. In London, silver for immediate delivery rose to $31.795, up 4.8 percent last week. For comparison, silver had hit a high of $49.79 back in April of 2011.

It is expected, per a Barclays report this month, that supply for silver will exceed demand by nearly 6,441 tons in 2013. Continued investor demand will be a critical factor in silver’s performance in the near future.

Cheers

W.C. Guy