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Wisdom of silver buyers

Have average bullion coin investors begun to run out of money for buying silver American Eagles?

That might be an overdramatic question, but the June sales figures, with just three days to go in the month, are running at half the May level.

Fluctuations are normal over time, but this year buyers have been taking as many coins as the U.S. Mint can produce each and every month.

That purchase pattern is not playing out in June.

This week the Mint has nearly 3 million coins to sell. The likelihood that it will sell them all is virtually nil.

So I repeat the question: are buying running out of money?

An alternative assessment comes to mind that relies on the wisdom of these silver coin buyers.

After dramatic price gains since the beginning of the year, do these buyers foresee a market price correction?

In this case, buying fewer coins makes sense. It is the intelligent thing to do.

If in a month or two, the silver American Eagle bullion coins can be carried off at lower prices, why buy in June?

Silver closed the year 2015 at $13.775 a troy ounce. The Kitco website this morning has the price of the metal at $17.73.

The gain is $3.955. That is 28.7 percent.

Silver owners should be well satisfied with those numbers. Stock market investors can only envy the silver result so far in 2016.

So if owning silver was the smart thing to do in 2016, is a buying pause now also the smart thing to do?

We can’t say for sure, but we can play the odds and say yes with some confidence.

Silver was cheap at the beginning of the year. Buyers recognized it. They pounced.

Silver is not as cheap now. Buyers seem to have paused.

With all of the turmoil in the world now, there is no question that silver needs to be part of every investment portfolio. It is a must-own asset.

That makes buying silver at the most advantageous price the name of the game. If a little waiting achieves this, that is what the smart money will do.

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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One Response to Wisdom of silver buyers

  1. schnauzer says:

    I’m not so sure that investors have actually paused their purchases of silver. Maybe there has been a pause in Silver Eagles true, but Silver Eagles are not the only game in town. Private outlets such as Provident Metals, Modern Coin Mart and Paradise Mint, along with many others, are selling thousands and thousands of ounces of silver. Not to mention Ebay and purchases of non ASE silver from local coin dealers. Numbers of ounces sold through these businesses are not made public as are U.S. Mint sales. So we don’t really know how much money investors are spending on silver right now.
    I don’t mean to downplay ASE’s as an awesome product, because they are beautiful. But possibly folks are getting away somewhat, from high premiums and are in a “pause mode” currently. A mode that allows them to actually purchase more physical silver by choosing private mint silver rounds or bars at a lower premium than ASE’s. A 1 oz. generic round has the same amount of silver as an ASE. If the “hard times” really do come to pass thus a time of desperation and despair, grades, special labels, eye appeal and owning a ASE over a generic, won’t really matter.

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