Silver Coin Demand Is Absolutely Through The Roof – Perth Mint
If the continuing depression in precious metal prices has a silver lining, it is the enormous surge in demand world-wide for silver. With most mints & brokers experiencing higher than expected demand for silver coins, many are having to set weekly sales quotas after record coin sales.
According to Nicholson, Ananthalakshmi and Harvey, reporting for Reuters yesterday, this rapid surge in demand for silver is due to unprecedented interest in coins from ‘mom & pop’ buyers in the US. “Dealers and mints trace the supply squeeze to a burst of buying by mom-and-pop investors in the United States, who scrambled to scoop up coins they considered to be at bargain levels after spot silver prices in early July sank to six-year lows.”
In addition, there is a perceived shortage in the market of silver coin supply which, according to a Perth Mint spokesperson, “is in fact a (crunch in) manufacturing capacity.”
With North American mints overwhelmed by orders, investors and collectors were forced to look overseas for increasingly scarce supplies, triggering a domino effect in Europe and Asia.
"We can only get a fraction of what we could sell," said Terry Hanlon, president of Dillon Gage, one of the world's biggest precious metals dealers, based in Addison, Texas.
Hanlon said he has seen premiums for coins, which are paid on top of the spot price for physical delivery, surge to about $4 to $5 per coin in wholesale deals, compared with $2.30 in June.
While such buying binges are not uncommon in the coin world, and the U.S. has allocated sales of silver coins several times since prices of silver plummeted in 2013, this episode has lasted far longer, and its effect more pronounced, than in the past, dealers say.
The silver spree is also notably more intense than in gold coins. U.S. Mint sales of gold coins had their best quarterly performance since the second quarter of 2010, but mints aren't yet straining to keep up.
Still, the rush of coin buying has failed to offset a years-long silver rout by institutional and retail investors betting on further gains in the dollar, U.S. equities and an improving U.S. economy.
Prices have fallen 7 percent this year, are on track for their third yearly loss and down by 70 percent from all-time highs of $50 hit in April 2011.
Holdings in the silver-backed exchange traded funds,, which were popular with investors during the financial crisis that followed the collapse of Lehman Brothers, sank to below 518 million ounces this week, their lowest in almost three years.
For now, however, coin dealers are riding the wave. Bullion dealers around the globe who typically offer next-day delivery are now taking silver coin orders several weeks out.
"I don't expect things to get better until next year," said Gregor Gregersen, founder and director of retailer Silver Bullion based in Singapore.
Courtesy of http://www.goldcore.com/
Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.