Avoid the silver frenzy

Time Magazine’s Man of the Year issue arrived in my mail on Friday and I began to read it over the weekend.

Of course I am interested that Pope Francis was honored this year, but what caught my attention particularly was a full-page ad urging readers to order their 2014 silver American Eagles now.

Cover date of the issue is Dec. 23. The first release by the U.S. Mint of 2014 American Eagles will be Jan. 13, 2014.

The advertiser is obviously planning ahead.

January demand for silver American Eagles is always heavy. In 2013, January demand was a record. The Mint sold 7,498,000 silver American Eagles and still ran out of supply.

The Time ad shows we are once again building up to another buying frenzy for the 2014 coins.

I expect TV ads will arrive in advance of the availability date as well, but they do not seem to have started yet. Some readers call me about advance TV offers to ask whether the advertiser offering the coins has somehow gotten supplies ahead of everybody else.

The answer to that question is no, but there is no prohibition on taking advance orders as long as the clients are happy to wait until actual delivery begins.

How will January silver American Eagle sales play out this time?

Unless the price of silver bullion takes a surprising hit between now and Jan. 13, I expect demand will be higher next month than it was in the first month of 2013.

That is a shame because early buyers tend to pay far higher premiums on their silver American Eagles than buyers who are willing to wait until the initial frenzy dies down.

If you want to buy one coin and then run around and show everybody that you have gotten a 2014 issue, that’s one thing, but if you are planning to make a sizable investment, that is something else entirely.

When the time comes to sell months or years from now, the premium you receive will likely be far lower than what it will be in January, so why pay it?

If you simply want silver in January, it would be smarter to check the prices of silver American Eagles dated 2013 and earlier while everyone else is chasing 2014 coins. Premiums for those coins will likely be lower.

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."