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
Jan 21, 2013 1:45PM
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Even if a proof coin....If multiple thousands are minted, good luck getting that big buck down the road.

 

I have a sack of silver for you...Lemmee see...??

 

The Mint is finally gonna make some big bucks...

Jan 21, 2013 1:40PM
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Guess if I was going to buy silver it wouldn't be 1 troy oz. coins for $63 dollars or much more then a couple of bucks over actual value.....Price of spot that day, or maybe average for the week ??

Even 10% is way too big of premium to give anyone, including a dealer....

 

If you are turning this into a Numismatic thing, then go for it, but even then, I see no realistic value much over spot if they mint 10s or 100s of thousands of these...

PT Barnum had you spotted decades ago...And you are still walking around.

Much better ways to own or invest in Silver or PGMs....imo.

But keep believing the Hype and good luck..

Jan 21, 2013 1:39PM
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"One expert thinks investors are snapping up the coins as a refuge from continuing economic uncertainty in the U.S."-

Oh,is that what it is?!More like Fed counterfeiting.And despite the mainstream media's aversion to recognize the centuries old FACT that PMs are MONEY,Au/Ag are moving toward the monetary system again just as Jim Sinclair said they would.The funny thing is most Americans still have total faith in a piece of paper that continues to lose its global reserves status AND purchasing power.Sadly,these fools will move into metals when it is already too late.Keep counterfeiting Bennie!
Jan 21, 2013 1:31PM
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$ 63.00 is for a Silver Proof coin from the U.S. Mint it has nothing to do with spot silver prices for christ sakes you idiots !!!
Jan 21, 2013 1:28PM
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Americans are never going to straighten out this defunct political system as long as the most important things on their minds are Bieber, 49ers, Katy Perry, nascar, the bachelor, rap, golf, etc....
Jan 21, 2013 1:23PM
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LIMO can i just say

 

haaaaaaaaaaaaaaaaaa

Jan 21, 2013 1:22PM
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Silver bullets are needed to fend off those demented Repukelican zombies!
Jan 21, 2013 1:08PM
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they made a mistake about the price,63 dollars maybe they meant the other way around like 36 dollars and thats for bullion eagles.however if they mean the special collector issue proof eagles,then you'll be closer to their  price of 63 dollars.
Jan 21, 2013 12:58PM
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Never buy coins direct from a mint . Here in the UK it is much better to go to a coin dealer because they buy in bulk from the mint at a huge discount e.g The price of a gold sovereign is around $500 but  only $300 from a dealer. (My prices are not  100% accurate and are only an illustration )
Jan 21, 2013 12:33PM
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Hell I did the video 15 Billion Reasons to Own Physical Silver! Seen now by 40,000 People...
Jan 21, 2013 12:23PM
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$63 each!! I bought two for $35.50 each from a local coin shop in Memphis, TN last week. I also called two other coin shops to check their prices before making my purchase. Prices among the three shops ranged from $35-$37 each. And all three had plenty to sell; however, I bought them on the day they recieved their 1st shipment from the mint. The $63 price must be for Silver Eagle proofs, but who would buy a proof as a hedge??? I buy the uncirculated coins like the one pictured in the article and not proofs.

 

I've been collecting Silver Eagles since they came out in 1986. The value has gone up dramatically over the years. There was a shortage in 1996, which made the '96 coin extremely valuable. That coin and the rise in silver prices has more than paid for my collection. And, they're beautiful coins.

Jan 21, 2013 12:21PM
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63 dollars for a silver eagle.You must be joking!
Jan 21, 2013 12:15PM
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I started to get sucked into this coin deal years ago. Why would you spend $63 for a coin that's an ounce of silver when you can get silver bullion for half that price ? Only an idiot would fall for this scam.
Jan 21, 2013 12:12PM
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Reuters is out of date w/ the $63 price.  Monex has Silver 1oz @ $31.96.
Jan 21, 2013 12:01PM
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gold is the answer and this is why? the fed keep printing money and puting up 87 billion in bonds each month this is to curve inflation and it only stops inflation for a little while when the bonds become due the real inflation will come.china and india and japan are buying gold at a alarming rate germany wants it's gold back less and less is being mined the mines are not producing lokethey use too in many countries they are using mercery to mine and the world has turned a blind eye this is getting into the air and water and fish but in countries like canada the goverment makes them mine it right there is a company which will be bought out because it is so low BRD who has a face value of 225 million but the have over 3.5 billion of gold in reserve and this is only on 20 percent of it's land most likely they have or are sitting on 6 to 7 billion look for this company to be bought out at 3.00 a share from china or india it might even pay 4.00 a share the stock is trading at .95 a share they did 56,000 ounces in 2011 77,000 in 2012 and in 2013 they should be close to 100,000 and in 2014 when they go for the good stuff and build there mill to handle 3,000 tons per day this is from a couple of years ago they were handling 500 a day right now 2,000 and if gold goes to 2500 this company is setting on at least 6 billion and proubally actually closer to 10 billion check out BRD this is a stock you can retire from
Jan 21, 2013 11:41AM
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Did you ever notice that everybody who loves gold and silver is a sour puss ?
Jan 21, 2013 11:29AM
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the mint ran out of money to pay for the new supply of silver blanks. there is no shortage anywhere
Jan 21, 2013 11:11AM
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the counterfeiting nature of frn's has come home to roost.  deport the corporation---WDC.
Jan 21, 2013 10:29AM
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If you actually look at current commodity prices in comparison to the DOW Jones and the Dollar, they have been artificially suppressed and held back for a number of years due to the Fed's QE and bond purchasing manipulation. Weak global economic outputs and debt contagions in Europe and in the U.S. will force the price of many precious metals and other commodities to break out in the very near future. You can only hide the inevitable for so long. You can't keep on consuming more than what you produce and expect others to foot the bill. You can't tax or spend your way into prosperity, either. The infinite fiat money printing and central planning ponzi schemes will have a finite day of reckoning. Sooner or later, you will have to pay the piper.
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