Silver proofs to get a boost?

I can’t think of a better way to increase initial demand for proof 2013-W silver American Eagles than to tell collectors a week before they go on sale that the bullion coin version is in short supply so sales have been suspended temporarily.

News of the suspension of sales of silver bullion American Eagles, which have no mintmark on them, broke yesterday afternoon.

Next Thursday sales of the 2013-W proof coin begins. Collectors might even be so eager to snap them up that they will forget to complain about the high $62.95 price.

Total sales of the 2012-W proof silver American Eagle amounted to 819,217. Excited collectors could easily push the figure to 1 million this year.

Timing, of course, is critical.

Demand for bullion Eagles always is the highest during the month of January. Every bullion dealer in the country wants to get the new dates into the supply channel. Every collector wants the new date for his or her set. Every grading service wants to rush out their version of early strikes as designated by their slabs. And some investors want to be the first on their block to boast of having an MS-70.

It is the annual perfect storm of demand.

How short is the supply?

It is a relative thing. The Mint has already sold 6,007,000, nearly as many as it sold in all of January 2012.

If sales begin again in the final days of January as indicated, last year’s January sales figure of 6,107,000 should be eclipsed by at least 1 million coins and likely many more.

How long will the shortage last?

Nothing seems to rev up demand for silver Eagles like potential buyers being told they can’t have any today. They then want the coins all the more.

From a business standpoint, the Mint can be criticized for not having a stockpile at the beginning of the year large enough to fulfill demand from all comers, but that would tie up more working capital and it likely would mean more down time in the production schedule later in the year.

The Mint would much prefer that monthly demand occur in even increments rather than in seasonal swings.

However, there is no penalty exacted by such an Eagle shortage, and in fact, it can be argued that the excitement generated by news of a shortage pays dividends both in the bullion market and in the collector market when individual hobbyists decide to pad their order for the regular proof coin by a coin or two “just in case.”

Buzz blogger Dave Harper is editor of the weekly newspaper "Numismatic News."