Precious Metals

Authorized purchasers buy weekly allocation of silver Eagles

Reports about the weekly sales of American Eagle silver bullion coins from the U.S. Mint continue to sound alike. Authorized purchasers placed orders Sept. 28 and 29 exhausting the weekly allocation of 1 million coins, a repeat of the experiences of the past few months.

The allocation totals were announced Sept. 28. The authorized purchasers placed orders Sept. 28 for 693,000 of the total coins offered. Orders were placed Sept. 29 for the remaining 307,000 coins available.

The U.S. Mint has approved 12 authorized purchasers to place orders for American Eagle silver bullion coins.

The two-day sales brought September's cumulative sales total for the 1-ounce silver bullion coins to 3,804,500 pieces. Calendar-year 2015 sales totals reached 36,054,500 coins, with 13 sales weeks still left in the year. 2014's record year recorded sales of 44,006,000 silver American Eagles, with that record likely to be eclipsed in year calendar 2015.

The next allocation of silver American Eagles to authorized purchasers will be announced Oct. 5.

Planchets in short supply worldwide

The Mint continues to experience, like other world and private mints, difficulties in obtaining enough .999 fine silver 1-ounce planchets to mint its product.

The U.S. Mint's primary supplier of American Eagle silver planchets is Sunshine Minting in Coeur d'Alene, Idaho. Sunshine CEO Tom Power reports the employees of the planchet supplier are working around the clock, with an estimated 75 million ounces processed already in 2015, three times the levels from 2008. That 2015 figure includes Sunshine's own struck bullion pieces.

Demand has pushed secondary market premiums per coin to more than $5 on prices charged by authorized purchasers to secondary market distributors. In addition to the increased premium, the limited supply has created delays in shipping product to those distributors.

The secondary market sellers then add their own premiums to the coins when selling them to their customers.

The U.S. Mint does not sell the American Eagle silver bullion coins directly to the public. The coins are sold to a network of authorized purchasers who offer a two-way market buying and selling the bullion coins. The authorized purchasers buy the coins for the closing London PM spot price of the metal per ounce on a specific day plus a premium of $2 per coin.

The authorized purchasers may then resell the coins to collectors, investors, and secondary market distributors at a premium.

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