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All the silver Eagles you want

Rationing of silver American Eagle supplies has ended at the U.S. Mint.

“We are pleased to announce after 28 weeks of allocation in 2016, effective Monday, July 18, 2016, we have lifted allocation of American Eagle Silver Bullion Coins. Authorized Purchasers may purchase as many American Eagle Silver Bullion Coins they desire. The United States Mint will continue to monitor its American Eagle Silver Bullion Coin demand and adjust its bullion coin production accordingly.”

That email from Tom Jurkowsky, Chief, Office of Corporate Communications at the U.S. Mint arrived in my inbox this morning.

How long will they be able to keep this new sales policy is a question that popped into my head as soon as I read it.

We have been here before only to see it reversed as new waves of demand hit the Mint.

Don’t get me wrong. It is good news. Abundant supplies should help the premium come down at least a bit at the retail level at which purchases are made.

But to anyone who has watched the Mint’s struggles to keep up with high investor/collector demand for the silver Eagle coins since the financial crisis struck in 2008, it is a little bit like Charlie Brown trying to kick a football held by Lucy Van Pelt.

The Mint sells silver Eagles only to its Authorized Purchasers, who in turn distribute the coins far and wide.

The APs will buy more only if they believe they can sell more.

It is declining demand for silver Eagles since the end of May that has helped make this change in Mint policy possible.

So might we assume that demand will stay down?

Sales so far in July stand at 695,000 coins. We are at the mid-point of the month.

In the period January to June sales of silver Eagles averaged nearly 4.7 million each month. Then in June sales totaled just 2,837,500.

If we double the July number we get 1.39 million. Could sales possibly come in that low?

Or will Eagle buyers once again get excited and overwhelm available supplies?

Past results don’t guarantee future returns, the financial industry likes to remind us. But the pattern of shortage – oversupply – next shortage of the last eight years does not seem likely to be over just yet for silver Eagles unless you believe the world has become a place of sweetness and light and wisdom has returned to politics.

But this morning’s price of silver, $19.88 a troy ounce will not likely cause the next buying stampede to start today.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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