Silver coin premiums set to climb on reduced supply

January 14, 2014 06:01 AM

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Today’s AM fix was USD 1,248.75, EUR 913.10 and GBP 760.97 per ounce. Yesterday’s AM fix was USD 1,246.00, EUR 911.89 and GBP 757.86 per ounce.

Gold climbed $7.70 or 0.62% yesterday, closing at $1,254.80/oz. Silver rose $0.32 or 1.59% closing at $20.45/oz.

Gold is marginally lower today but remains near its highest in a month. Safe haven buying has increased after a drop in equities globally because of concerns over the U.S. economy after a disappointing jobs report last week.


Gold in U.S. Dollars, 5 Year - (Bloomberg)

Increasing demand for U.S. silver coins is set to send premiums to the highest since October according to Bloomberg.

The premium charged by wholesale dealers for American Eagle coins from the U.S. Mint may rise from 14%. The mint has said that weekly allocations will be reduced despite very strong demand so far this month.

Yesterday, the U.S. Mint said 89% of this week’s quota of 3.58 million silver eagles were sold following sales that were stopped on Dec. 9 because of a lack of supply.

Sales of silver American Eagles rose to an all-time high of 42.675 million ounces in 2013. Purchases jumped to a monthly record in January 2013, and the mint suspended business for a week because of a lack of inventory.

The silver bullion coin market is tight with strong hands refusing to sell and mints rationing supplies. Silver's sharp fall is seeing the smart money continue to accumulate silver coins while supply is available and premiums still relatively low.

Separately, the Perth Mint has announced that they have sold out of their silver bullion coin - the one ounce 2014 Australian Kookaburra.

Silver has climbed 8.9% from a five-month low at the end of 2013.

About the Author

Mark O'Byrne is executive director of Ireland-based GoldCore.