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INTERVIEW: U.S. Mint: On Track To Set New Sales Record For American Eagle Silver Bullion Coins

By Debbie Carlson Kitco News
Monday August 19, 2013 9:00 AM

(Kitco News) - Silver-coin demand has been strong in 2013, and the U.S. Mint said this year could be a record setter for sales of its American Eagle silver bullion coins.

Dick Peterson, acting director of the U.S. Mint, said demand for the Mint’s one-ounce American Eagle silver bullion coins is “brisk” and so far 2013 sales are currently up 47% compared to the same time last year.

“We sold a total of 39,868,500 American Eagle silver bullion coins in 2011. That was our record for a single calendar year. Year to date, we have accepted orders for a total of 31,046,000 ounces (pieces) of American Eagle silver bullion coins,” he told Kitco News, citing sales data as of late last week. “If present demand continues and our weekly allocations of between 800,000 to 900,000 coins remains constant, we’ll set a new record for sales in 2013.”

Demand for silver coins in 2013 has been a global phenomenon, with many elite mints citing much stronger-than-expected sales. The U.S. Mint is no different. Tight supplies of refined metal at times forced the Mint to limit its sales.

“The rapid increase in demand for all silver bullion coins has put a severe strain on all global suppliers and as a result, the Mint has not always been able to obtain a sufficient number of blanks to meet market demand for American Eagle silver bullion coins. As a result, we are forced to allocate coins to our authorized purchasers,” Peterson said.

The Mint works with a select number of metal dealers, called authorized purchasers, to distribute bullion coins. From there, authorized purchasers supply other coin dealers with U.S. Mint products.

Peterson said the U.S. Mint “has worked diligently over the last five years to grow our supply of silver blanks,” but it’s not always easy to judge investors’ appetite for coins. 

The past two years are an example of just how volatile demand can be, and thus the Mint’s ability to judge what supplies they may need, Peterson said.

After peaking in 2011, demand in 2012 fell by over 22% in the first half of the year, but surged again in the last quarter of the year. The Mint’s January 2013 demand was up almost 23% from January 2012, he said. 

“This volatility makes forecasting extremely difficult as demand is driven by external factors beyond the Mint’s control,” he said. “Overall, we attempt to manage our supplies in a manner that ensures we have a sufficient number of coins to meet the weekly demand of our authorized purchasers.  When that demand exceeds our ability to acquire a sufficient number of blanks, we then go on allocation until our inventories can be rebuilt again and the supply of blanks increased so that time spent on allocation is minimized.”

American Eagle Gold Bullion Coin Sales Surpass Year Ago

The U.S. Mint already surpassed total coin sales from last year for its American Eagle gold bullion coin series, with a combined 1.2 million coins of all sizes sold calendar year-to-date versus 2012 total coin sales of 1.1 million. Peterson said it’s likely total ounces sold will best last year’s level, too. As of mid-August, the U.S. Mint is at 91% of last year’s sales of coins in all sizes, 682,500 ounces, versus 753,000 ounces sold in 2012. The Mint sells its American Eagle gold bullion coins in one-ounce sizes, and in fractional ounces of one-half, one-quarter and one-tenth.

“With over four months to go until the end of the year, and based on recent demand, it appears as though the United States Mint will surpass last year’s calendar year totals for these coins,” he said.

The American Eagle gold bullion coin program started in 1986 and Peterson said there were “multiple” years when more than 1 million ounces of these coins were sold in any calendar year. The record year for coin sales was 1999, triggered by people worried about the “Y2K phenomenon,” he said. That year, the Mint sold a record 2,055,500 ounces, or 5,097,000 pieces, of American Eagle gold bullion coins, he said.

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By Debbie Carlson of Kitco News; dcarlson@kitco.com,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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