Silver coin demand up, up, up

The Silver Institute confirmed overnight what coin dealers have been saying for a number of weeks now.

There are shortages of bullion coins because buyer demand is exceeding the ability of world mints to supply it.

The result is delivery delays.

The non-profit industry association that is headquartered in Washington, D.C., says the U.S. Mint, the Royal Canadian Mint, Australia’s Perth Mint, the Austrian Mint and the British Royal Mint are rationing their supplies.

Of course, the euphemism of choice in recent years is not “rationing” but “allocation” and that is the word used by the Silver Institute’s report.

But whatever word is used, the point is if you want silver in physical bullion coin form, you probably will have to wait for it for as long as three to four weeks.

This high demand is also spilling over into the market for small bars.

The Silver Institute says there is a slight shortage in the sizes of one-ounce and 10-ounce weights. For these, the delivery delay is pegged at 10 days particularly in the United States and Canada.

Silver bullion coin sales reached an all-time high of 32.9 million ounces in the third quarter of 2015.

This is nearly double the level during the same calendar quarter last year.

The Silver Institute’s numbers indicate that everyone seemed to wake up and demand silver starting July 1. In the first week of the month the U.S. Mint suspended sales and returned to rationing supply after only having just ended it the month before.

Across all types of bullion coins, demand surged 74 percent from the second to the third quarter of the calendar year, according to the Silver Institute.

For most of the month of July the U.S. Mint had nothing to sell, but was still able to sell 5,529,000 silver Eagles when all was said and done, the highest monthly figure since January when the number sold was just 1,000 coins higher.

But the strains are showing.

Sales in August and September dropped at the U.S. Mint, not because demand fell, but because of the shortage of blanks.

In August, the total sold was 4,935,000 silver Eagles. In September, the figure was 3,804,500.

“It is clear that investors are continuing to demonstrate their desire for silver bullion coins and we encourage national mints across the globe to examine their manufacturing pipeline to ensure that this strong demand is met with immediate fulfillment,” stated Michael DiRienzo, Executive Director of the Silver Institute.

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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