Guest Post: "What's Ahead for the American Silver Eagle"

The good folks at Gainesville Coins offered to write up a guest post for us regarding Silver Eagle demand in 2013 and 2014. I said, "knock yourself out", so they did. The result is this excellent summary.

What's Ahead for the ASE?
By Steven Cochran, Gainesville Coins | Thursday, December 19, 2013

Sales of the American Silver Eagle bullion coin hit a new all-time record in 2013, at nearly 42.7 million coins, and it wasn't all due to the precious metals take-downs in April and June. With the Fed giving Bernanke a going-away present of at least a token taper in the December meeting, what will Silver Eagle sales look like in 2014?

The U.S. Mint isn't taking any chances this time, halting 2013 Silver Eagle production a week early, and pushing back the 2014 release date a week, to January 13th. Last year, the Mint had boosted stock on-hand for the 2013 release by 20% over previous year's sales of 6.1 million coins, thinking that this would give them plenty of extra stock. They didn't count on the fiscal cliff/debt ceiling/sequester charades in Washington, though, and completely ran out of 2013 ASEs in eight days, selling 7.48 million coins. Keep in mind, that this was when silver was $30/oz.

The Mint had to ration Silver Eagles through the first half of 2013, due to production bottlenecks, even with the West Point Mint working 24/7. This year, in addition to giving themselves more lead time, they are rationing (allocating) them from Day 1. Is this extra measure of caution well-founded? If pre-orders are any indication, rationing supply among the major distributors is a good idea. Pre-orders of 2014 Silver Eagles are already a best-selling item, more than a month before release. 

To protect itself against silver blank shortages again this year, the Mint now has three suppliers. In addition to Sunshine Minting of Coeur d'Alene, Idaho, two Rhode Island companies also supply precious metal blanks: Vennerbeck Stern-Leach of Lincoln, and GSM Metals of Cranston.

It's been noted that 2013 Silver Eagle sales, at 42.7 million oz, was more than domestic U.S. silver production, at 33.7 million ounces. Global silver stocks have been at a surplus for the last few years, and should continue, even with the closure of the Kennecott open-pit mine due to a landslide. (The mine, also known as the Bingham Canyon copper mine, produces over 3 million oz of silver at peak production, and is scheduled to return to full production in 2016.) The U.S. imported over 170 million oz. of silver in 2012, so domestic production covers less than 20% of demand.

The concern over Silver Eagle mintage numbers compared to domestic silver production may be due to confusion regarding the law on bullion sourcing for the American Eagle Program. Only Gold Eagles are required to use bullion (gold) from U.S. mines, which has been mined in the last 12 months. 

The Treasury has been allowed to buy silver on the open market since 2002, when U.S. strategic stockpiles of silver were depleted (Support of American Eagle Silver Bullion Program Act of 2002.) 

Even with tapering, the Fed is still conjuring $75 billion a month of liquidity into the system, and more people are starting to think about what that will mean for them personally when that money finally hits the broader economy. 

At the current spot prices, we expect more people to enter the market in 2014. The American Silver Eagle is the most popular investment-grade silver coin in the world, and as U.S. legal tender, is exempt from sales tax. With current government fiscal policy, we don't see demand for the ASE falling anytime soon.

107 Comments

Dagney Taggart's picture

First

This isn't going to be like last January and $38 ASEs, is it?

Poor suckers.

treefrog's picture

tooth

twoth

ribbit!

AlienEyes's picture

Second + one

Thurd

TomMack's picture

working overtime

the mint is taking care of business  A quick check at my LCS shows a $4.00 premium for 2013 silver eagles AND a $2.25 premium when they buy them back.  i guess there is not a lot of profit (if any) for US to mint to infinity. 

Bongo Jim's picture

I'll take the 5th

and add a bag of pretzels.

TheGoodDoctor's picture

Woot!

Woot!

Mudsharkbytes's picture

Lucky

Number seven. 

Hammer's picture

I'll take 8 lucky if you are

I'll take 8 lucky if you are Chinese 

Quoth the Maven, “Evermore”

By  Grant Williams +Follow toolbar_5_02.png December 19, 2013 8:53AM
Share:

On January 29, 1845, the New York Evening Mirror published a poem that would go on to be one of the most celebrated narrative poems ever penned.

for the rest of the article http://www.equities.com/editors-desk/economy-markets/economic-data-news/quoth-the-maven-evermore

Hammer's picture

One more thought, if the

One more thought, if the Volcker rule commits banks back to just being banks, and therefore being just lenders as one means of making profit in The States, surely (please argue the point for enlightenment) that means that they will be offering loans to the ordinary man for............housing loans........which means perhaps property prices will go up ?

just doodling thoughts-wise. DYODD. More ticks than an ole dog could ever learn this lot..........

Hammer's picture

I'm so sorry. It's Friday. If

I'm so sorry. It's Friday. If any of you good people out there are batshit crazy with what's going on, blow the froth off of one and have a kick back. Tis Christmas

and for the Brits and all you 

mac's picture

Banksters are it!

The mafia sits behind the desks of american Banks.

Liars, murders, con artists, swindlers, yup, that's america's finest business tycoons.

Now we need Benjamin Netanyahu to run for President!

He can speak Israeli to the Fed Vice Chairman and likely to Ms Yellen, too. That way we can have clean, transparent "communications". Yes?

silver2013's picture

Will silver hit 17.5 next

Will silver hit 17.5 next week?

Belmaniac's picture

Hi this is my first post to

Hi this is my first post to this forum so please bear with me if I'm off base a little.

Gainsville Coins said "Global silver stocks have been at a surplus for the last few years, and should continue, even with the closure of the Kennecott open-pit mine due to a landslide. (The mine, also known as the Bingham Canyon copper mine, produces over 3 million oz of silver at peak production, and is scheduled to return to full production in 2016.)"

Eric Sprott and many others have, after intensive investigation, assured us that this is not the case, that global demand exceeds supply and that the only reason that prices are low is because of market intervention.

So, which is it? They can't both be right, or can they? Have I missed something here?

Boswell's picture

Eagles are nice...

But the premiums are a large % at these prices. I've been getting mostly generic rounds lately to get my DCA down a little, but they will be the first to go if I need to sell anything. The "nice" coins will be harder to part with.

("Lucky" 13?)

Hammer's picture

Oh you can bet your sweet

Oh you can bet your sweet tooshie on it......capitulation here we come.......

koan's picture

Will silver hit 117.5 next week?

Same answer - who knows! 

Gold Dog's picture

Off Topic. I want to ride in the wagon for a while!

We have sold our companies and I will be out of work 1/1/2014.

Should I file for unemployment insurance so that I have some "pin money" to shoot craps with?

Most of my friends are outraged that I would collect because a) They say it is contrary to everything I stand for, and, b) Because I don't need the money.

I say screw them all, I have paid into the system so much for so long I just want to get a tad back. I think I might even qualify for food stamps for the first month of next year and am contemplating buying some prime rib to cook on the grill.

Fire away!

Welfare Queen,

Dog

57Goldtop's picture

Dog, run with this

Get on the dole, food stamps and all.

Start a blog, from an anonymous wealthy retiree who has nothing else to do since his legs won't let him bicycle as much as he'd like.

Call it, "Throw the Dog a bone".

Talk every day about how hard it is to thrive on social assistance, then post a photo of yourself, silhouette style to remain anonymous, lighting a cigar with a $100frn on your boat out on the lake.blush

Ask for donations, and show how they go towards people doing something more noble than lighting cigars with rapidly depreciating shytepaper. Or cleaning up a public park, or sumsuch.

(Merry Christmas!)

Stack'em High's picture

Gold Dog...

If your going to eat on my dime, I insist that your standing rib roast is in fact graded Prime...  preferably Prime + yes

Gold Dog's picture

Guys

I am easily satisfied....the best will do nicely!

Off to the Skunkworks.

WQ,

D

ag1969's picture

Gold Dog

I find your comment hilarious, and in a way sad.

Hilarious- I think it is hilarious the the .gov/welfare/ponzi state has become such a joke, that most people, myself included, would not really give a shit if a person of your means collected unemployment.  .Gov/Fed print the money, JPM gets their vig for "administering" the plastic cards, and you get a little payback for all of the currency you have paid into that broken system, the "shakedown" money.

Sad-when you really think about it, for the same reasons.  If you really want to participate in the way that most of the people do, you need to spend the dollars on cigarettes and heroin.  Have fun with that!

I share your frustration.  I think of all the money I paid in to unemployment, workers comp, and all the other bullshit, and when I closed my business, all of my workers were able to collect unemployment and I, the guy who paid all that shit, was eligible for nothing. 

I think a better "just dessert" for you would be to take as big a loan as you possibly can from JPM, go buy physical with it, and then disappear into South America never to be heard from again.  Same scam, different level.  Heck, do that with every cartel bank you can.  And for good measure, you could even buy the loan officers a drink with your newly acquired EBT card!

I can't wait to see Gold Dog in the 2014 remake of this video:

Yo Dog!  Swipe that EBT cause the shit is free!  LMFAO  And to boot, with your experience, it won't be long before you are the five star general of the Free Shit Army!

ivars's picture

That was to be expected,

That was to be expected, right? Who needs QE with 4,1% growth? Welcome to deflation.

Quote:

WASHINGTON (MarketWatch) — The U.S. economy expanded in the third quarter at its fastest pace in two years owing to stronger consumer spending and business investment than previously reported, according to newly revised government figures.

Gross domestic product climbed at a 4.1% annual rate from July through September, theCommerceDepartment said Friday. Previously the increase was reported as 3.6%.

So prepare cash for coming selloff of real assets in depression that will start next year as QE will be removed, stock market will crash, and mortgage rates will skyrocket. Treasury Yields of course as well.  Gold will at least move down until Treasury rates will be above some uncomfortable level, like 7% ( it was 7% in Italy and Spain case which was called a limit above which default is very likely.).

ag1969's picture

Re: Gainesville

A very nice company to do business with.  I have ordered many times from them.

"The U.S. imported over 170 million oz. of silver in 2012, so domestic production covers less than 20% of demand."

Ahhhh the privilege of having the World's Reserve Currency.  We are able to export ponzi coupons in exchange for 170 million ounces of real money while the criminal banking cartel smashes the price to below production costs.  So real money producers not only get fake money, but less than they should.  Nice scam the bankers have going there.  A lot of people are in for a very rude awakening when we lose that privilege.

"The Treasury has been allowed to buy silver on the open market since 2002, when U.S. strategic stockpiles of silver were depleted"

Pining 4 the Fjords's picture

Dog, I say it's your duty!

If:   1.  The system is dishonest and predatory, and

2. Its impoverishing your kids and grand kids and curtailing their future prosperity by spending money it doesn't have that they will be stuck indebted with, then 

3 it follows that whatever we do to weaken the system and hasten its demise is a moral and honorable act.

Do it for the children, Dog!!

Hammer's picture

Sorry. Wrong. This is what is

Sorry. Wrong. This is what is wrong about the US. It's just about the self and fcuk everyone else. In the early days it was called the american dream but it's now a nightmare and to take from those who could use the help is immoral. Being a very wealthy individual and having done very well to say fcuk em is sorry but just wrong imho. I understand you have paid taxes etc etc and employed people etc etc.

But hey ho, enjoy your steak if you are entitled to it.

ag1969's picture

Hammer

If Michelle Obama can go charge Caviar lunches on our dime, then let's let the Dog enjoy a steak for God's sake!  Obviously you are right, and I have to believe Dog is pulling our legs, but this a harbinger of the new normal where wrong is right and nobody gives a shit!

Hammer's picture

Don't get me started on these

Don't get me started on these people. It's Christmas.........sad

Firstly, I'm not anti wealth making or some kind of marxist trust me.

I know the wealthy pay a huge amount of tax really quite huge hence the logic behind the well if I'm entitled to it comment but in reality if someone s so loaded they actually don't need to suck off the system anymore that should be enough surely ?

They can walk tall knowing they have helped others more needy than themselves.

dgstage's picture

Back to Some News

Cyber Threats to Bank Accounts on the Rise

http://finance.yahoo.com/news/cyber-threats-bank-accounts-rise-224200388.html

Define "Market" Irony: When JPMorgan's Chief Currency Dealer Is Head Of An FX Manipulation "Cartel"

http://www.zerohedge.com/news/2013-12-19/define-efficient-market-irony-when-jpmorgans-chief-currency-dealer-head-fx-manipulat

DeaconBenjamin's picture

Billionaire Steinmetz Sues Soros-Linked Global Witness

 

Israel’s richest person Beny Steinmetz sued Global Witness, claiming breaches of his human and data-protection rights as part of a “sustained negative publicity campaign” led by the anti-corruption activist group.

The claim by Steinmetz and three other individuals, who are employed by or associated with his BSG Resources Ltd., was filed at London’s High Court and served on Global Witness today. The claim was brought under the U.K.’s Data Protection Act after Global Witness refused requests to produce personal data on the claimants for almost a year, according to an e-mailed statement.

Steinmetz said the group had made a number of “bogus” claims about BSGR, which is subject to a probe into how it obtained mining rights in Guinea. Global Witness’s chief donor, billionaire George Soros, has advised the West African nation’s government on mining issues, according to the statement.

BSGR has faced a widening investigation involving at least four nations into how it came to control half of Simandou, one of the world’s richest iron-ore deposits. Global Witness has also been examining the acquisition of the rights for more than a year, the group said in an e-mailed statement.

“Global Witness intends to robustly defend its position and regards the claim as an attempt to stifle journalism in the public interest,” it said. “BSGR still has not explained important aspects of its Simandou deal, notably the ownership of secretive companies associated with it. Rather than seeking to bully those raising legitimate concerns, BSGR should address these matters directly.”

http://www.bloomberg.com/news/2013-12-16/billionaire-steinmetz-sues-soros-linked-global-witness.html

http://www.ft.com/intl/cms/s/0/9d9fb696-680a-11e3-8ada-00144feabdc0.html?ftcamp=crm/email/20131220/nbe/AfricaSubSaharaBusiness/product&siteedition=intl

Agaupt's picture

New Canadian maple security features

I suppose the article could be using ASE as a proxy for all silver, but I'm impressed with the new security features that the RCM is adding to their silver bullion coins:

http://www.coinnews.net/2013/12/06/2014-silver-maple-leaf-bullion-coins/

They added some security features to the gold maple recently too.

I'm not too worried about fake silver bullion coins yet, but I am impressed with the fact the the RCM is taking it seriously now.  I'm not aware of any similar effort by the US mint.  If the price eventually does rise significantly, it will be more of a concern.

Anyone else preferring maples to eagles because of this?

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