Why did silver Eagle sales drop in 2016?

A drop of 20 percent hit sales of the one-ounce silver American Eagle bullion coin in 2016.

The 2015 total was 47 million pieces while the 2016 number is 37,601,500.

The difference of 9,398,500 coins means the Mint lost out on sales of around $180 million if we value the coins at current prices.

Why the drop?

Anyone trying to answer that question will most likely look at the behavior of the price of silver from the beginning of the year.

It started with the last close of 2015 at $13.775 an ounce. It soared to over $20 by July and then backed off to today’s $17.03.

Mint silver Eagle sales numbers were strong in the early part of the year, but then hit profound weakness June through September.

Silver Eagle sales recovered in October and November, but neither month equaled results of even the weakest month of the first five of 2016.

Could there be some other contributing factor to this weakness?

We all know that silver Eagles are hugely popular among average coin collectors.

We also know that silver investors who are also coin collectors are most comfortable dealing with physical coins.

What if a change in the behavior of silver-loving average collectors contributed to the large drop in silver American Eagle bullion coin sales?

This year the Mint offered the gold Mercury dime, Standing Liberty quarter and Walking Liberty half dollar.

These coins were designed to appeal to coin collectors nostalgic for the designs of 1916 that they likely put into Whitman folders during their younger years.

These new gold coins have successfully extracted more than $110 million from these collectors.

That kind of money is not chump change.

What if these collectors reduced their purchases of their favored silver American Eagle bullion coins to help fund their purchases of the gold Centennial coins?

It is interesting that sales of the silver American Eagle coins began to drop just as the credit card bills for the gold Mercury dime were coming due a month after the April 21 sellout date.

Because the secondary market for the gold Mercury sizzled, collector focus on the next offering of the gold Standing Liberty quarter on Sept. 8 was quite high.

These gold Standing Liberty coins have sold well but did not sell out.

About the time the credit card bills for this offer were coming due, the silver bullion Eagle sales numbers started jumping.

Were coin collectors who were excited by the gold Mercury sellout in April simply saving their money all summer long for possible use buying the next two gold coins?

Most coin collectors are not made of money. To buy one thing, they have to not buy something else.

Sure, what they also could choose not to buy regular proof sets, mint sets, or other Mint offerings.

However, it takes quite a few $31.95 proof sets to equal the roughly $1,500 cost of the three Centennial gold coins.

Those coin collectors who have been in the habit of buying silver Eagles each year as an investment might have reduced or eliminated these purchases to pay for their Centennial gold coins.

If that is the case, sales of 2017 silver American Eagle bullion coins next year will bounce back strongly toward the 2015 record number.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."