During the course of the past several years, the United States Mint has implemented a rationing program for their popular American Silver Eagle bullion coins at times when demand has exceeded the available supply. Will a recent surge in demand for silver bullion cause them to reinstate the program?
The euphemistically titled "allocation program" was last implemented for Silver Eagles in December 2009. This followed a brief sales suspension during the last few days of November. At the time, the price of silver had been moving steadily higher, supporting increasing interest in precious metals investment. The US Mint experienced a slow month of silver bullion sales in September, followed by increasing demand in October and November leading up to the suspension and ensuing allocation program, which remained in place until this September.
During the past few months, the situation is shaping up to be eerily similar. In September 2010, the US Mint sold 1,880,000 ounces of silver bullion, which represented the lowest monthly sales of the year. In October, sales rebounded strongly to 3,150,000 ounces. For the current month date, sales have already exceeded this amount, measuring 3,175,000.
With the month a little more than half over, the total seems poised to set a new monthly sales record. The current record is 3,636,500 ounces achieved earlier this year in May. Annual sales are already in record territory.
Bullion sales have been rising against a backdrop of steadily rising silver prices. Since the end of September, the silver price has increased from $22.07 to $26.57, representing a gain of more than 20% in less than two months. Reports of tightening supplies or shortages for other silver bullion have also been reported. This may explain the recent move towards the higher premium bullion coins.
The American Silver Eagle is currently the only silver bullion product offered by the United States Mint. A second program known as the America the Beautiful Silver bullion coins has been scheduled to launch this year, but a release date has not yet been specified.
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