As silver prices stagnate, some bullish investors are using unconventional methods to get their hands on the precious metal. Rather than buying mining stocks or exchange traded funds (ETFs), many are hording American Eagle silver bullion coins from the U.S. Mint. (Source: MarketWatch, July 8, 2015.)
The Mint describes the coins as “affordable investments, beautiful collectibles, thoughtful gifts and memorable incentives or rewards.” They are composed of one troy ounce of 99.9% pure silver. Investors can be assured of the coins’ weight and purity as both are verified by the U.S. government. (Source: US Mint, July 9, 2015.)
Silver prices dropped more than five percent on Tuesday July 7th, before recovering on Wednesday and Thursday. Overall, silver prices are in decline—down 16% from the January high of $18.28. (Source: The Wall Street Journal, July 9, 2015.)
The coins are sold in bulk to authorized distributors. As recently as May 2015, the Mint used to ration the sale of coins as part of their inventory management strategy. But that system was abandoned in the face of languishing sales.
As a result, the Mint sold 4.8 million Silver Eagle coins in June, up from just over two million units in May. Seigniorage was halted on July 7th, when the Mint received 2.7 million orders in the first week alone. (Source: US Mint, July 9, 2015.)
In a letter to its authorized distributors, the Mint assured buyers that production is ongoing at its facility in West Point, New York. Sales are expected to resume in two weeks. (Source: CNBC, July 7, 2015.)