Higher Premiums Only Real News Surrounding USMint Selling Out of Silver Eagles / Gold Buffalos
Higher Premiums Only Real News Surrounding USMint Selling Out of Silver Eagles / Gold Buffalos by Rory – The Daily Coin
I haven’t been overly excited about the US Mint “selling out” of American Silver Eagles (ASE) because the demand has been so low, their projections have simply been off the mark. This disruption in ASE’s is nothing more than the management of the ASE program miscalculating the number of eagles of produce. The same goes for the Gold Buffalo’s as well. It has nothing to do with supply and everything to do with demand. The demand simply has not been their for the past 14+ months so, why get ahead of yourself?
If you have already picked up some 2018 ASE’s I would actually suggest waiting until 2019’s are released – of course, you do what you want and pay no attention to what I say, I am telling what I’m doing – I’m waiting until the premiums come down and that should be after the first of the year when the US Mint is flush with product. Premiums are elevated on these products because they can be – not because of door-busting demand.
It appears the US Mint and authorized purchasers are selling down NEW / OLD inventory. Authorized purchasers (wholesalers) are over loaded with 2016/2017 ASE’s and what a great way to flush the system of past mintages? Stop selling current year a couple of months ahead of schedule. Who’s having a problem getting silver eagles? How many do you want? Does it matter if one digit changed on the face of the coin?
When I told you all that I had picked up the latest ATB, on Tuesday as the market was getting smashed to the downside, I didn’t even mention ASE’s or that they are currently sold out at the US Mint. Why? Because an ASE is an ASE is an ASE is an ASE – over and over and over. Same design, same everything with only one number changing each year for the past 18 years. The last major change was when the millennium changed from 1999 to 2000. That was the most significant change since 1986 to the ASE and AGE (American Gold Eagle). There has been no other significant change to the design since. Gold Buffalos have the same flaw as the ASE / AGE.
Clint Siegner at Money Metals see this situation in similar fashion as myself.
The lower metals prices are, predictably, driving increased demand for physical bullion from U.S. retail investors. Bargain hunters, who had less reason to buy during the first half of the year, have come out in force over the past two months.
Perpetually plagued by shoddy production planning, the U.S. Mint announced last week the government agency is temporarily sold out of silver American Eagles and gold Buffaloes. Premiums for those coins moved higher almost immediately, especially on Silver Eagles.
The government-run “enterprise” typically operates with little room for error and does not maintain a large supply of unstruck planchets.
This means it can’t handle moderate to large fluctuations in demand. It’s not unusual for the U.S. Mint to fail in its statutory mandate to produce sufficient coins to meet public demand.
At the end of the day, it’s not a big deal and hardly even worth reporting on, except the fact that premiums are moving to higher ground. Once again, nothing unusual, just a way for the wholesalers and retailers to make a better margin – that’s how a free market works. If you’re smart enough to get your annual supply while premiums were low, good for you. If you didn’t, well, you get to finance Christmas bonuses for some of the retailers and wholesalers!