Commodity Trade Mantra

Silver Eagles Soar – 2013 Sales of Silver Coins Smash All Records, 50 Million Within Reach

Silver Eagles Soar – 2013 Sales of Silver Coins Smash All Records, 50 Million Within Reach

Silver Eagles Soar – 2013 Sales of Silver Coins Smash All Records, 50 Million Within Reach

There have been several reports today announcing that the sales of silver coins by the US Mint have breached the total for 2012 annual sales within the first eight months of 2013. That is true.

Sales of American Eagle silver coins by the U.S. Mint this year surpassed the total for all of 2012 as investors snapped up silver at a record pace due to continuing inflation and systemic risk and spark a rebound in prices. About 33.75 million ounces of the silver coins were sold so far in 2013, compared with 33.74 million in 12 months last year, according to data on the mint’s website. In January, sales reached an all-time high of 7.498 million, and averaged 3.65 million a month since then as demand heads closer to the annual record of 39.868 million reached in 2011. The U.S. Mint had suspended sales of silver coins for more than a week in January because of a lack of inventory.  Silver prices reached a 31-year high of $49.845 an ounce in April 2011 as global central banks expanded their balance sheets, boosting the precious metal’s appeal as an inflation hedge. The premium charged by dealers surged to 25% in April, the highest since 2008, after prices slumped into a bear market that month. The lure of it being an industrial metal is also giving it a boost as expectations of demand in China are improving.

Silver prices surged into a bull market last month and have gained 29% from a 34-month low on June 28, sparked by demand for precious metals as an alternative asset. Holdings in exchange-traded funds backed silver rose to a record 20,082 metric tons on Aug. 30 and are up 5.9% this year.

The US Mint’s Monthly Sales of Silver for 2013:

Month Silver Ounces
JAN 7,498,000
FEB 3,368,500
MAR 3,356,500
APR 4,087,000
MAY 3,458,500
JUN 3,275,000
JUL 4,406,500
AUG 3,625,000
Till 4th SEP 675,000
TOTAL 33,750,000
Figures above are in Silver ounces and not in the number of coins sold.
Data source: U.S. Mint

Average monthly sales of Silver Eagles at a record high ever:

What has gone unnoticed is that the average monthly sales of this shiny white metal are at a record high ever. I have tabled below the sales of the American Eagle silver coins since 2001 and the previous high in average monthly sales (AMS) was in 2011 with an AMS of 3,322,375 ounces per month and the lowest one being for the year 2005 at an AMS 0f 700,416 per month. The AMS for the year 2013 till Sep 4, is a mind boggling 4,218,750 ounces per month. At this pace, the annual sales for American Eagle silver coins alone would be a minimum of 50,625,000 ounces.

I had alerted several times in my articles earlier also about the same  – While Gold Demand Slips, Soaring Silver Demand Indicates Higher Prices

The Most Bearish News For Gold Prices Yet – But Silver Bull Right on Track

At the average of current pace of sales, silver bullion may reach a minimum of around 46 million ounces. But if we also take into consideration the addition of investments flowing into silver after rising interest rates and bond yields have been seen, and also with US stock markets poised for sharp corrections, the number could very well cross the 50 million ounce mark for 2013.

The numbers today are proving that my views were right on track. Moreover, the seasonally favorable months for sales of precious metals are September to December. If that proves true this year, the 50 Million mark for silver sales by the U.S. Mint alone will be more that surpassed.

The US Mint’s Annual Sales of Silver Coins from 2001 till Sep 4, 2013:

Year Silver Ounces Monthly Avg.
2001 8.827.500 735,625
2002 10,475,500 872,958
2003 9,153,500 762,791
2004 9,617,000 801,416
2005 8,405,000 700,416
2006 10,021,000 835,083
2007 9,887,000 823,916
2008 19,583,500 1,631,958
2009 28,766,500 2,397,208
2010 34,662,500 2,888,541
2011 39,868,500 3,322,375
2012 33,742,500 2,811,875
2013 33,750,000 4,218,750
Figures above are in Silver ounces and not in the number of coins sold.
Data source: U.S. Mint

Sales of silver in Sep till the 4th, 2013 have been 675,000 ounces as show in the earlier table above.

Silver Sales at record highs at the Royal Canadian Mint:

Also that, the Royal Canadian Mint Maple Leaf sales year-to-date is on track to beat both 2012 and 2011 records. Chris Carkner, managing director of sales for bullion, refinery and exchange-traded products at the Royal Canadian Mint, recently said, “Year-to-date, after the second quarter, we’ve had record volume for silver Maple Leafs, the greatest we’ve had in the over 25 years that we’ve produced them.” Silver Maples increased to 12.1 million up from 8 million, 1H 2012 and 11.4 million in 1H 2011. Silver Maple sales are on track to reach 24 million oz in 2013 which will beat the sales of 18.1 million in 2012 and possibly the 2011 record of 23.1 million. Together, Silver Maple and Silver Eagle sales will hit between 68-71 million oz in 2013.  This is an amazing figure as it represents 9% of total world silver production of 787 million ounces in 2012.  Also, we must remember this 9% investment demand is just from these two Official Mints. If we consider the sales of additional commemorative silver coins as well as sales from the other official mints, total figures for 2013 will more than likely top 2011’s total of 118.2 million oz (2013 World Silver Survey) by at least 10 million oz.

Expect Silver Prices to also breach all expectations:

Bets on higher prices for silver advanced for the three straight weeks, data from U.S. Commodity Futures Trading show. Imports by China, the world’s biggest consumer after the U.S., rose for three straight months through July. Silver remains well below its record inflation adjusted high in 1980, it’s important real record high of over $140/oz. The gold silver ratio is likely to trend lower and revert to its long term average and its geological ratio of 15 to 1 as a huge amount of silver has been used in industrial applications in recent years. Silver above it’s real record high in 1980 seems likely due to increased industrial, investment and, potentially most importantly, store of value demand for what remains a very rare precious metal in a time of universal currency debasement.

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