Late last week, the U.S. Mint notified its distributors that it will again take orders for its American Silver Eagle bullion coins on April 21, 2008. Interestingly, the Mint further said that it will be allocating coins to its distributors because of “the unprecedented demand for American Silver Eagle Bullion Coins.”
At first it may appear that Silver Eagles will again be in short supply considering the Mint disclosing the need to allocate. However, the Mint undoubtedly decided to allocate based on the brisk demand for the popular 1-oz silver coins at the time the Mint ceased production. Since then, the demand for all forms of silver has subsided as the price of silver has fallen.
Typically, steadily rising prices, such as the silver market enjoyed from the middle of December 2007 through the middle of March 2008, causes increased interest, which results in increased sales. With the drawback in silver prices, interest in all forms of silver is reduced. Consequently, I do not expect the demand for Silver Eagles this week to be anywhere near what it was when the Mint ceased production. In fact, the Mint may find that it has no need to allocate.
Although the Mint will start taking orders today for Silver Eagles and CMIGS will take retail orders, I do not anticipate shipping to retail customers until the end of the week, and maybe not until early next week. By the time anyone reading this places an order, CMIGS should have a better idea when shipping will actually begin.
In announcing that it was again accepting order, the Mint did not reveal why it shut down production in March. It’s our guess that the Mint had production problems or could not get the blanks from which Silver Eagles are stamped. Some dealers speculated that the Mint diverted its resources to other areas, such as collector coins, but I doubt that.
The U.S. mint American Eagle Bullion Coin program has been a tremendous success, with more than 160,000,000 Silver Eagles and 11,000,000 1-oz Gold Eagles being turned out. Interruptions in the production and sales of Silver Eagles and Gold Eagles have been infrequent since their introduction in 1986. The U.S. Mint has virtually a lock on the market for new 1-oz silver coins and new gold coins. There is no reason to believe that the Mint would open the door for competition from other government mints by diverting resources to other areas.