Silver coins the new hot haven investment?

The US Mint has temporarily halted the sale of silver coins. Investors may be snapping them up as a refuge from continuing economic uncertainty.

By Bruce Kennedy Jan 21, 2013 9:13AM

Image credit: U.S. MintIs there a real silver shortage, and are we seeing a modern silver rush? The answers to those questions might depend on whom you listen to.


Last week, the U.S. Mint halted sales of its 2013 American Eagle silver bullion coins.


The Mint website says the coins, with a face value of $1, contain a minimum of one troy ounce of 99.9% pure silver. According to Reuters, they are worth around $63 each.


Reuters quotes an email sent by the Mint to authorized dealers on Thursday saying that sales of coin will resume at the end of the month after inventory has been restocked.


So what's going on? One expert thinks investors are snapping up the coins as a refuge from continuing economic uncertainty in the U.S.


"It is easy to infer that some element of the fear trade may be at play," Joni Teves, an analyst at UBS AG, wrote in an emailed report over the weekend. "We view the chunky sales of American Eagle coins more a function of seasonality than anything else. It is important to keep an eye on U.S. coin sales in the coming months to see if volumes remain elevated as the debt ceiling showdown plays out."


And Ole Hansen, head of commodity strategy at Copenhagen's Saxo Bank, told the Oman Daily Observer that several international factors are apparently in play when it comes to silver's current volatility. The current global economic downturn, he says, is fueling investor demand in precious metals. Conversely, improving economic data is increasing worldwide demand for commodities like silver -- which has value as both an industrial metal and a financial investment.


A recent report released by the Silver Institute, produced by Thomson Reuters GFMS, projects an estimated 6% rise in demand for industrial silver. And that rise in silver prices, fueled by "a steadily improving economic outlook, strong growth in the automobile sector, and a recovery in the housing and construction industry," could take industrial silver to a new record high next year.


Some market analysts say that while there’s no physical shortage of silver, those holding silver aren't interested in selling at current prices. 


Seeking Alpha reports that, as of the middle of last week, "silver holdings across all silver exchange-traded funds (ETFs) increased by 59.4 million troy ounces over the last 12 months" -- which means current holdings are about 8% of the annual silver supply.


And commodities analysts at Frankfurt's Commerzbank, according to ResourceInvestor.com, said last week saw "the largest inflows into silver ETFs since December 2010, taking total ETF holdings to a new record of nearly 20,000 tonnes."


"With silver, you can benefit from both sides: its safe-haven status and the fact that it’s also an industrial commodity," Frederique Dubrion, president and chief investment officer of Geneva's Blue Star Advisors SA, told Bloomberg. "Given some positive leading indicators, especially in the U.S., investors would probably prefer turning to silver rather than to gold."

More on Money Now


61Comments
Sep 11, 2013 10:04PM
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Just buy 90% silver coins dated 1964 and earlier for a much better deal
Feb 9, 2013 11:06PM
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Interested in learning how to get Silver for free Let me know
Feb 6, 2013 3:07PM
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Some  one mentioned that price is for thr Proos, still too high

buy old coin silver pre 1965 if you want to buy any at all & for goodness sakes

SHOP AROUND

Jan 25, 2013 7:20PM
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I've been just stocking up on the old pre-1936 "Peace" and "Morgan" dollars or the old pre-1965 quarters and half dollars and sometimes dimes.  Works just as good and may even command a higher premium on some years.  Buying them from the dealer's "cull" basket for $2 - 5 over spot. on the silver dollars and the old pre-1965 quarters and half dollars at spot.  As for the rounds I buy them at spot if available but other people buy them quickly they don't carry it.  For proof rounds if it's offered at spot I'll buy it and sell it on eBay for $63.  Sure if the price is right.
Jan 22, 2013 12:56AM
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no where in the article does it say proof coin
Jan 22, 2013 12:54AM
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kitco.com is selling the 63 dollar coin for under 36 bucks.
Jan 22, 2013 12:50AM
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coins worth 63 bucks each?  I have 3000 to tell the guy. SCHMUCK
Jan 21, 2013 6:18PM
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Silver....32.05

Gold...1690.  appx figures this pm.

 

Wouldn't pay over 34 for that coin.

To each his own...

 

 

Jan 21, 2013 6:16PM
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They have trouble posting facts and criticism, on this one...
Jan 21, 2013 4:16PM
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$63 must have been a type-o.....cuz I buy them for $36.
Jan 21, 2013 4:10PM
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I don't know about silver,but lead seems to be a better choice, in the the form of bullets.  Obama and his proposed gun  control bills are arsine.
Jan 21, 2013 3:56PM
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Facts and Logic, under republicans we went from a $237 billion dollar surplus to a $1.3 trillion dollar deficit in 8 years doubling our debt and crippling our economy.

Under Obama we have reduced the deficit from $1.3 trillion annually to a projected  $800 to $900 billion in 2013.

So should America have voted for the party that increased the deficit by $1.537 trillion or the party that has reduced it by $400 to $500 billion in 4 years. "  Stupid is as Stupid does  " Did you vote Republican?

Jan 21, 2013 3:18PM
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Come on, where did he get the figure of $63 for a one ounce silver coin?
Jan 21, 2013 3:06PM
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I'm still waiting for a shortage of wood, so that all those nickels I've been taking will be worth something someday...
Jan 21, 2013 2:28PM
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factsand logic.........hmmmm...?

 

Been looking logically at that dribble for over a half hour...Really don't understand or see any connection to silver bullion coins...?

It isn't even funny, nor does it makes any sense...?

 

But you have at least 7 moron followers now...

Jan 21, 2013 1:57PM
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The price quoted by the US mint is accurate for Proof Silver Eagles.  The US mint does not sell the regular issue.  The reporter didn't do all of his homework.  If they had they would have known that regular issue bullion silver eagles are not sold by the mint to the public.  The US mint is having some delivery problems with silver eagles.  This is very similiar to what happened in 2008 when silver deliveries at times were backed up for two months.  We are not there, yet.  Blanchard and Co can currently deliver at least 20,000 silver eagles around $35 per ounce.  1-888-443-2843.
Jan 21, 2013 1:50PM
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LIMO Pat.....A lot of Someone "no names" aren't really too bright when it comes to investing.
Jan 21, 2013 1:49PM
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Only need to see Obama on TV this morning to know you need to prepare for a very bad future end to his manness.  The sad thing is the American people have shoved this sharp stick into our own eye.  All voting for Christmas to continue on borrowed moeny.  How stupid, how greedy!
Jan 21, 2013 1:47PM
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SOMEONE:I doubt if you bother to read newspapers, but USA TODAY stated that the stock

market is up 85% since Obama took office.That`s before dividends.Sorry you`ve missed

out on the bull market.It would improve your disposition if you invested in America and

loved this country as much as I do.

Jan 21, 2013 1:46PM
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Was Willard anywhere in the audience?....I was looking ONLY for him..

 

Geezus Christ were half of you people stupid, or what...?

 

I'm going for the WORST..

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