For a long time silver investment advisors have pointed to a disconnect between what they call a too-low commodity market price of the precious metal and the seemingly insatiable investor demand for silver American Eagles and other world bullion coins.
Clearly the demand for the silver Eagles is right and the market price wrong, right?
We are about to find out.
When the Mint ceased rationing the supply on Monday – what it calls allocation – buyers can now have all the pristine 2014 silver American Eagle bullion coins they want.
So how many will that be?
So far in 2014 the Mint has sold 22,056,500 of the one-ounce coins during a period of rationing.
That is a higher pace than was set in 2013 when 42,675,000 were sold during the entire year, but it is not gang-busters different.
Buyers often enjoy the idea of acquiring something that is in limited supply simply because the supply is limited.
When a seller says, “I can let you have …” that statement gets the “I gotta have it” gene working in many buyers.
When the seller says, “Back up your truck and take what you want,” the impression it leaves is whatever is being sold is less exclusive somehow, even if the item being sold is something as valuable as silver.
The price of silver has been inching lower little by little in recent days on the commodity markets.
Will Eagle buyers take advantage of this break and load up on these coins at current prices, or will they start doubting that the coins are as desirable as they once thought they were?
One way or the other, it looks like we will find out whether there is a silver market disconnect.
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.”