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U.S. Silver-Coin Sales Top 2012 as Investors Buy at Record Pace

U.S. Silver-Coin Sales Top 2012 as Investors Buy at Record Pace
A die finishing specialist inspects dies used to strike coins under a microscope at the United States Mint at West Point in West Point, New York. Photographer: Scott Eells/Bloomberg

Sept. 4 (Bloomberg) -- Sales of American Eagle silver coins by the U.S. Mint this year surpassed the total for all of 2012 as investors snap up precious metals at a record pace and spark a rebound in prices.

About 33.75 million ounces of the silver coins were sold so far in 2013, compared with 33.74 million in 12 months last year, according to data on the mint’s website. In January, sales reached an all-time high of 7.498 million, and averaged 3.65 million a month since then as demand heads closer to the annual record of 39.868 million reached in 2011.

Silver prices surged into a bull market last month and have gained 29 percent from a 34-month low on June 28, sparked by demand for precious metals as an alternative asset. Holdings in exchange-traded funds backed silver rose to a record 20,082 metric tons on Aug. 30 and are up 5.9 percent this year. Bets on higher prices for the precious metal advanced for the three straight weeks, data from U.S. Commodity Futures Trading show.

“Demand continues to remain very strong,” Paul Zimnisky, chief executive officer of Madison, New Jersey-based, Pure Funds, said in a telephone interview. “The lure of it being an industrial metal is also giving it a boost as expectations of demand in China are improving.”

Imports by China, the world’s biggest user after the U.S., rose for three straight months through July.

The U.S. Mint suspended sales of silver coins for more than a week in January because of a lack of inventory. Sales of gold and silver coins may rise to a record this year if demand continues at the current pace, Richard Peterson, acting director of the mint, said in a June 5 interview.

High Premium

The premium charged by dealers surged to 25 percent in April, the highest since 2008, after prices slumped into a bear market that month, according to Richard Nachbar, a coin dealer based in Williamsville, New York.

The metal reached a 31-year high of $49.845 an ounce in April 2011 as global central banks expanded their balance sheets, boosting the precious metal’s appeal as an inflation hedge.

Silver futures for December delivery fell 4.2 percent to close at $23.415 today on the Comex, the biggest slump since July 5. While prices are up from the June low, they are down 23 percent for the year.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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