When it comes to demand for the silver American Eagle bullion coin, is there anywhere else to go but up?
Kenneth Lewis, chief operating officer of APMEX, Oklahoma City, Okla., said that the silver Eagle market has grown over the past year.
“I am amazed that the demand is this high,” he said. “I’m not sure where all the silver Eagles are going.”
The United States Mint sold 5,530,000 silver Eagles in January and 2,149,500 in the first half of February.
In 2014, 4,775,000 silver Eagles were sold in January and 3,750,000 in all of February.
The market for the 2015 silver Eagle may even go higher later this year, he said.
“There are a lot of 2014 silver Eagles still on the market that may be bringing sales down now,” Lewis said.
John Maben, owner of Modern Coin Mart, Sarasota, Fla., said that there’s no slowdown in demand for the silver Eagle.
“Sales based on units sold have been phenomenal,” he said. “We’re about 50 percent over where we were last year for the same number of days since release.”
Silver Eagles are a very popular way to invest in silver, he said.
“Buyers like the fact that it is the No. 1 selling bullion coin in the world,” he said. “Some buyers may just add to their holdings based on the number of coins. In other words, a buyer might purchase a monster box each year without regard to price.”
Silver Eagles are also easy to sell on the secondary market, he said.
“It also has a relatively tight spread, meaning about only a 40 cent difference between the buy and sell per coin in large volume purchases,” Maben said.
Lewis said that the silver Eagle’s next closet competitor is the Canadian Maple Leaf silver bullion coin, but it’s not much of a competition.
“Silver Eagles outsell Maple Leafs on a four-to-one basis,” Lewis said. “That’s not saying the Maple Leaf is a bad coin, but that buyers prefer the silver Eagle.
“You pay 60 to 70 cents more than a Maple Leaf to buy a silver Eagle. You might have to pay more for it, but you’ll also be able to get more for it when selling it on the secondary market.”
The stability of the silver Eagle provides confidence to the buyer, he said.
“It’s the U.S. government backing it up,” he said. “You can’t ask for a stronger economy and government to back it up.”
The fact that the silver Eagle design hasn’t changed in its 29 years of mintage further helps its popularity, he said.
“No doubt, recognizability helps investor sales,” he said. “People know quality when they see it.
“A design change is more for the collector and not for the investor. Collectors are a small part of the silver Eagle market.”
The only area the silver Eagle isn’t strong in is Europe, Lewis said.
“The silver Eagle is not popular at all in Europe,” he said. “A lot of the market there is in the Austrian Philharmonic bullion coins.”
Alexander Haus, manager of sales at JM Bullion, Dallas, Texas, said other bullion options in the marketplace may draw in more silver bullion buyers.
“There are more exotic places that are getting into the game and ramping up their production in silver bullion,” he said. “We’re seeing a growing demand from Germany for the Geiger Mint where the Armenian Ark bullion coins and others are minted.
“Collectors are really open to purchasing other coins. I think that’s a good thing.”
Private mints in the United States have also developed new bullion designs and concepts to attract both collectors and investors, he said.
“I think we’re seeing increased interest toward more homegrown mints selling metals,” he said. “The silver bullion bullets we sell appealed to a certain market.
“The mints are also coming up with better technology for anti-counterfeiting their bullion products.”
Maben said that something new and appealing does well on the silver bullion market.
“As an example, our Burundi silver Lion quickly sold out the maximum mintage of 50,000 coins.
“Low mintage items that are appealing as well as items that have a known theme do well.”
But however demand for new silver bullion coin products develops, it still has a long way to go to catch up to the soaring American Eagle.