Physical Silver Supply Shortage at $30, News Of Stalwart Demand Keeps Rollin’ In

As the Silver Liberation Army has mused about the days of silver shortage, most members did it with the belief in mind that silver would be drained with the price at $50, $75, $150 or $500, but NOT $30. But, alas, that is what has come to pass. In January of 2012, major stories have broke, from the ETP inflows hitting highs to the US Mint suspending Silver Eagle sales, the Royal Canadian Mint managing its Silver Maple Leaf supply and then on January 28, the first day American Silver Eagles were back on the market, 1.1 million of them were sold, meaning that the monthly sales record had been surpassed, and the mint had thus sold more coins than in any other month since 1986, the coins’ inaugural year.

It seems that every few months now silver ETPs are breaking holdings records. Likely, physical silver is receiving this same sort of demand minus the coverage.

There has already been a silver deficit since 2003, and that is as silver was around $4. Nonetheless, there was no silver deficit in 2004 with silver increasing in price to $6.67 per ounce.  It is very clear that silver investment has increased, the silver price has increased and with them both so has silver production. Growing demand of official government coins is an easy stat to keep a pulse on. In 2002, the entire supply of official government coins and medals were 31.6 million ounces. By 2011, this had grown to 118.2 million ounces.

And this demand just keeps on getting sturdier. Steep growth now in India’s silver exports is outpacing all other trade in precious metals as world demand picks up for silver. Indeed, shipments for silver jewelry products are expected to increase by 30 percent this year, according to trade body officials from India. Silver exports are likely to to go up by 25-30 percent this year against $797 million a year ago while gems and jewelry exports are expected to rise 15 percent against $38.28 billion worth of overseas shipments in the previous year.

Robust sales are expected in the US by the GJEPC, which last year contributed to 11 percent of exports.”From the U.S., demand and consumer confidence are very encouraging… this market will play a major role in gems and jewellery exports,” said Vipul Shah, chairman of the GJEPC, adding they have been focusing in other growth areas like the United States, China, Russia and Australia.

As SV mused in a recent article entitled “The Beginning of the End of the Silver Eagle:”

This week has been quite the week for silver and the US government. Just Tuesday the US Mint notified the public of higher prices for some 2013 silver products, including the five-ounce America the Beautiful silver coins, for which the price increase $15 or $3 per ounce of silver.. The 2013 American silver eagle proof coin, as well, was announced on the 14th that it would be priced $3 higher than its 2012 counterpart, along with the 2013 burnished uncirculated with a “W” mintmark, which will be released in May, will be $53.95, $3 higher per coin as well.

The purpose of the rise in price, one might surmise, would be to quell demand, as America The Beautiful coins have already generally showed sluggish sales.

In an inquiry about why the price rise, the US Mint replied:

“When pricing was established based on a given spot price for silver, US Mint silver numismatic products reflected those higher prices. However, as has been the practice over the last couple of years, we will continue to adjust prices from time to time to reflect the changing price of silver.”

Considering that generally the US Mint reacts to price changes, and not doesn’t predict them, if they hold with these new prices, then they might in the near future raise their prices once again.

Then, two days after the announcement about the price rise (which, admittedly, did not affect the Silver Eagle), the US Mint announced this:

Authorized Purchasers,

The United States Mint has temporarily sold out of 2013 American Eagle Silver Bullion coins.  As a result, sales are suspended until we can build up an inventory of these coins.  Sales will resume on or about the week of January 28, 2013, via the allocation process.

Please feel free to call us if you have any questions.

Regards,

Jack A. Szczerban

Branch Chief, Precious Metals Group

Department of the Treasury

United States Mint

As SV wrote after the announcement:

Demand out of the US Mint has been staunch, and as silver has held well below its April 2011 heights. The beginning of January 2013 has been record breaking. After having sold more than 6 million silver coins in 2013 thus far, the US Mint has announced it has run out of Silver Eagles (for now) and has suspended sales. The mint will be offline until January 28. With gold repatriation out of Germany, and G20 meeting next month to pretend once again to slow currency devaluation, demand for silver eagles will not be slumping.

Silver in the meantime has had an excellent week, peaking through $32.

The Silver American Eagle Coin series was authorized by Congress in 1985 and first produced by the United States Mint in 1986.  Silver Eagles are made of .999 fine silver and are the finest silver coins ever minted and distributed in the United States.

Each coin contains one troy ounce of fine silver and measures 1.598” (or 40.6mm) in diameter with a thickness of .117” (or 2.98mm).The Silver Eagle is America’s only investment grade silver bullion coin.

The obverse design is based on the U.S. “Walking Liberty” half dollar which was first minted in 1916 and designed by German immigrant sculptor Adolph Weinman.  The reverse side of the coin features a bald eagle and shield with thirteen stars above the bald eagle.  The thirteen stars represent the thirteen original American colonies.

Is this the beginning of the end of the Silver Eagle? Might be. Silver demand is at record highs.

The post Physical Silver Supply Shortage at $30, News Of Stalwart Demand Keeps Rollin’ In appeared first on Silver Vigilante.