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Silver Eagle numbers dwindle

The U.S. Mint said a couple of weeks ago that it would be selling silver American Eagle one-ounce bullion coins to its authorized purchasers until Dec. 9.

That has not changed, but the Mint is also clearly cutting back on the number of coins it is offering each week.

For three weeks in a row it has supplied just a half million coins.

Why?

I expect the Mint is accumulating planchet supplies to feed into the production of 2014 coins so when sales begin on Jan. 13 it won’t run out as quickly as it did in January of 2013.

Rationing has not ended, so that will offer the appearance of new supplies coming on the market even if market demand is not fully being satisfied.

Last January the Mint sold 7,498,000 2013 silver American Eagles and buyers wanted more. How many more will the Mint want to be able to offer in 2014 is a reasonable question to ask.

Naturally, the Mint is adjusting its approach in light of this.

The current sales pace will put November silver Eagle sales at 2 million rather than the more than 3 million of the month before. No month in 2013 has been below September’s 3,013,000 coins.

November results will be below that floor and December with fewer sales days will be lower still.

For current buyers, the question becomes one of the effect reduced supplies will have on premiums.

Will premiums rise?

If no other factor changes, you would expect them to.

This premium rise could be ongoing right through the end of January as holiday demand feeds into end of year demand that feeds into demand for the new date.

Lower silver prices could discourage buyers, but since this has not happened all year, it is not likely that the present trend lower to test the $20 price level will have any impact on demand.

Investors are still enamoured of silver and the sense of American Eagle shortage will continue to feed this love affair.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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