US Mint Sees Record Silver Sales In Q3 As Physical Demand "Is Absolutely Through The Roof"

Tyler Durden's picture

Having recently pointed out the surging premiums for physical gold and silver relative to the 'paper' prices spewed forth by the mainstream media, it will likely come as no surprise that, as Reuters reports, "silver [coin] demand is absolutely through the roof," according to the Perth Mint. Confirming the demand side is the U.S. Mint sold 14.26 million ounces of American Eagle silver coins in the third quarter, the highest on records going back to 1986. 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.

 

As Reuters reports,

The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand.

 

The U.S. Mint began setting weekly sales quotas for its flagship American Eagle silver coins in July because it can't meet demand, and the Canadian mint followed suit after record monthly sales in July. In Australia, the Perth Mint sold a record of more than 2.5 million ounces of silver this month, nearly four times more than in August, and has begun rationing supply of a new line of coins this month, a mint official said.

 

"Silver [coin] demand is absolutely through the roof," said Neil Vance, wholesale manager at the Perth Mint.  "There seems to be a bit of frenzy as people think there is a shortage of silver. But in fact it is a (crunch in) manufacturing capacity."

 

While demand has risen in response to the slump in spot prices to $14.33 an ounce in late July and its subsequent drop to fresh six-year lows below $14 an ounce in August, mint officials also said they were caught out by the sudden interest in coins. In July, the U.S. mint halted sales for almost three weeks after running out of "blanks", which are used to make coins.

The spread between silver and gold, a closely watched gauge for the precious metals markets, has risen to its highest in the third quarter since a brief silver frenzy following the financial crisis. Silver coins typically outsell gold anyway because they cost less, but the wide spread meant the silver price is 76 times cheaper than gold, making it even more appealing than usual to investors.

The U.S. Mint sold 14.26 million ounces of American Eagle silver coins in the third quarter, the highest on records going back to 1986. The Canadian mint has been limiting sales of its silver Maple Leaf coins since July after record monthly sales that month, an official told Reuters. Sales were at all-time highs in August and September.

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.

 

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.

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Kaiser Sousa's picture

no offense but u guys r late with this as i posted it this morning...

still appreciate u though....just sayin......

Payne's picture

nothing to see no real shortage just a bottle neck in getting out of the ground.

stacking12321's picture

"Silver [coin] demand is absolutely through the roof," said Neil Vance, wholesale manager at the Perth Mint.  "There seems to be a bit of frenzy as people think there is a shortage of silver. But in fact it is a (crunch in) manufacturing capacity."

 

rick rule of sprott gave a great interview (as always!) a few days ago, noted that there isn't currently a supply shortage of silver, just a supply shortage of retail (minted) product:

https://www.youtube.com/watch?v=bI0dAJ_NzRk

J S Bach's picture

And yet, the price remains $14.50 in fiat dollars.  How do they do it?  You've got to give them credit... they're masters in illusion, delusion and lies.  Reality will bring it all to an equilibrium soon though.  Economics are as much in the grip of nature's laws as physics.

Soul Glow's picture

Why would I want silver when the Fed can print an infinite amount  of dollars?

:)

Wow72's picture

Because its real and the FED is in your head. They will make those dollar worthless just like they have for the past 40 some odd years.   Look at the long term dollar value chart?  They haven’t done a dam thing to make it more valuable.  Just printing makes it less valuable, people just don’t realize it.  Think of it as a reverse split, they keep dividing the value up(which there is no longer any).  It means you get more dollars that are continually worthless.  Notice your monthly bills going up? BINGO.  Why wouldn’t people want silver at these prices? Because they don’t understand value. 

 

At some point the big industrial boys are going to feel the price is low enough to consider a stock pile? What do you think is going to happen then? after all these years of deficit? After all low prices dont last forever and silver will never go out of business.

The more they print the worse our problems will get, distortion will be in multiples, if its not already.

ThaBigPerm's picture

They're going to have to put a stop to people dumping their PMs at the landfill soon at this rate.  Like the restaraunt nobody goes to any more because it's too crowded.

Wow72's picture

Time will tell.  Ill put a basket out in front of my door just toss them in Ill throw you a dollar for each? Ive never known someone with a pile of gold or silver to be poor?  Whats the reason for the word "Precious"?

 

Maybe if there is enough gold around that we can afford to bring it to the dump, lets let Germany have THEIR gold back?  Oh ya.... we cant just yet.  Really the check is in the mail.

 

Does anyone have a problem with SilverInstitute.org stats? https://www.silverinstitute.org/site/supply-demand/  Check out NET BALANCE and consider we have yet another Projected Deficit year? It cant last forever? Lots of silver gets used up and has gotten used up, unlike gold.

undertow1141's picture

Also nobody, nobody read that again NOBody mines silver purposefully. Its a side product to other metals mining. Ponder that for a second.

 

Now think about the mining collapse going on in commodities. Most Silver is a byproduct of copper and gold mining but mostly copper. Copper prices are in the shitter. As copper miners go under silver production will grind to a halt. And this demand side shortage will show its real head as a true systemic shortage.

But what do I know I'm just some fucking yayhoo.

Wow72's picture

Not afraid to be a yahoo here.  Its so under appreciated.  I personally love silver, its a healer, it has so many unique properties and lots of people hate it right now.  It really, truly is for me.  As with anything under the FEDs control there are no guarantees.

coinhead's picture

Teh we gonna take all of y0vr siver c0inz and melt tehm down to make BITCOIN MINERZ!  BUAHAHAHAHA eR AAHAHAHAHA... agAUBTCH!!!

Wow72's picture

Good Luck! Ill just cut the power to get rid of you.

undertow1141's picture

I carry a 1921 silver morgan and a 1 oz copper round in my pocket. I call them my hand sanitizer set.

FlSapo's picture

Just leave the shit in the ground and problem solved..

Wow72's picture

Its amazing how many want something for nothing and thats exactly what a dollar is right now.  How long does everyone think that lasts?  all on one side of the spectrum.  It tilts everything out of balance.   I trade my work for real work because I know what work is.  Im not trading my work for promises because I see how our politicians keep those promises.  They seem to have lots of promises to keep if everyone wants something for nothing? Not much production, value or worth there.

realmoney2015's picture

Mainstream media! It's unbelieveable how it still exists! Amazing how so many people beileve eveything they hear on the tv. Turn it off and cut the chord. 

Yohimbo's picture

they never will they turned off the thinking circuits years ago, and now the thinking gears are frozen like the engine of a rusty studebaker in a tall weed junk yard.  

realmoney2015's picture

Mainstream media! It's unbelieveable how it still exists! Amazing how so many people beileve eveything they hear on the tv. Turn it off and cut the chord. 

Fahque Imuhnutjahb's picture

I was preparing to cut the chord, but the MSM said it was a bad idea.

Wow72's picture

The CNBC article is very suspect it just says shes wrong because she is an amateur, they do nothing as far as stats to back that article up?  You have company heads saying if they could get more they could sell more?

The silver defict this years is estimated to be around (57 million oz) if im not mistaken based on a silver insitute estimate.

 

http://www.kitco.com/news/2015-07-28/Silver-Continues-To-See-Positive-Br...

 

Before all this BATSHIT CRAZY DEMAND. http://www.kitco.com/news/2015-07-28/Silver-Continues-To-See-Positive-Br... From article:

"Silver also continues to see strong industrial demand. The institute noted that silver use in the renewable energy sector, as the metal is a key component in solar panels, is expected to increase 8% this year to 65 million ounces.

“The increase is due to the U.S., which had a 76 percent increase in solar installations in the first quarter of 2015 when compared to last year,” the report said.

The report also highlighted that while silver demand remains positive, the metal is expected to see a growing supply deficit of around 57.7 million ounces, the third consecutive yearly deficit."

 

Ive also seen estimates of an 81 million oz deficit for 2015.  I think the CNBC article is B.S. Low on proof.

evokanivo's picture

What does it mean to have a deficit? There are only transactions. It would be like saying "there is a deficit in cars produced". Price solves everything and there is only exchange - unless you think there is a "proper amount" or that the amount desired is the "right amount".

Wow72's picture

It means you dont have enough supply to meet demand and there are reserves. Some think that the US mint is not buying enough to meet demand so they can divert other supply to China Russia and India.   They can make citizens wait which is against the law, because we put up with it.  Just the fact that they cant meet demand is against the law.  I wouldnt put it past our gov to be tomb raiding in the mid-east at this point.  People need to use their brains, I cant help you if your not capable of opening your mind a bit.  The lack of supply is a real situation.  People will find out the truth, they always do.  Its a finite metal and there  has been endless printing.  Anyone with half a brain turns their fiat into real in this situation why not?

 

Its really something when there is a deficit and the price doesn’t go up, then you know pretty much there is something manipulating price.  Natural price increase usually wards off deficit.  Thats my opinion.

realmoney2015's picture

I agree they are sneaky. Inflation works that way. Most people don't realize that money printing is theft. We need to abandon the federal reserve system Too bad their is ony one candidate in the race who wants the Fed audited and ended!

We have to try to side-step the fed's net. www.UPMA.org looks like a great opportunity for this. Trading and exchanging real gold and making purchases with a gold american express. Hopefully, more people start switching to this system and out of the debt dollar system.

Stacking silver is impoirtant when it all collapses as well, but we need to spread the word of sound money to our friends and family. Candles with silver coin prizes (https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu) have helped several in my network to start stacking. 

We can't rely on politicians to change anything. Un-bank as much as possible!

TheEndIsNear's picture

Thanks for mentioning something useful along with your Spam.

I've opened an account with UPMA thanks to a prior ZeroHedge article and I encourage everyone else to do the same. UPMA doesn't make loans (of course), but they do charge a small monthly fee. They have "Bill Pay", but no checking account yet. Account Manager Jeremy Cordon said in an email to me that:

"When the zerohedge article came out we got hit with hundreds of emails and voicemails all at ounce so we have been playing catch up. We are all caught up now."
realmoney2015's picture

Yeah, I set up an account there. I saw it at www.popularliberty.com a day or two before being posted on zerohedge. So I think I slightly beat the rush. 

Their customer service seems good and the website has already improved. From the interview I heard on popularliberty, expect them to vamp up pretty soon. 

Exciting times!

Latitude25's picture

Appears legit but I own PMs for NO THIRD PARTY RISK.  Sorry

Wow72's picture

I think once their done tomb raiding in the mid-east we will see the real price.

KansasCrude's picture

Yeah well  (P)Rick Tool has said October will be the capitulation to end all capitulations so why would he admit it is a supply shortage.  He is a  big vulture that is always calling for lower prices.  He has been right but he is not a person you want to have on your side in a fight. 

Zero Point's picture

Not many markets where manufacturers are so badly outstripped by demand. Dumb bastards just can't make enough I guess. Silver coins must be a very new technology where levels of demand are poorly understood. L O L

Perimetr's picture

"I don't expect things to get better until next year"

Hahahaha like when the COMEX is shut down and Dow is at 7000?

OldPhart's picture

Bought 2014 and 2015 proof silver mint sets a couple of weeks ago direct from the mint.gov, took all of two days to recieve the order.  (While I buy bullion, I'm now buying birthyear sets for my grandson(s, got a new one on the way!!) along with silver eagles for each birth year. 

So I might have contributed to those numbers to a degree or two.

Beowulf55's picture

So why are prices so low..........I am beginning to think the market is broke..........

Macchendra's picture

A consortium of silver consuming companies flood the market with silver futures to bedazzle the AI traders.  One good run would unravel the whole scheme, and probably everything else.

whoflungdung's picture

So why are prices so low..........I am beginning to think the market is rigged.....

 

There, fixed it for you  ;)

buzzkillb's picture

I get a lot of boiler room cold calls to invest in garbage. Telling them I won't invest in a rigged market with examples from 2015 is a very easy way to get taken off the spam list. Physical silver can go down to $0 since the miners will just take out more loans to bring it out of the ground. So what happens when the paper goes to $0?

moratar's picture

The demand on silver is low. Don't mix demand on coins with demand on silver :P Global recession is on the move. Producers need less silver so price goes down. Bullion coins is just a tiny fragment of silver market.

hobopants's picture

LCS is out of everything even 100oz bars here.

buzzkillb's picture

Looking closely at provident and apmex, there isn't that much near spot in 1oz and 10oz rounds or bars. Quite a bit of what is near spot is also pre-sale or delayed shipping. For now is looks like silver spot stays between $14-15 with about a $1.50 markup per oz. Apmex sure has a lot of 1oz coke branded bars in the $150 range.

Dickweed Wang's picture

From what I've seen lately, in small amounts (ten coins or less), silver eagles currently have a premium of 40-50% over spot regardless of where you order them from.  That's a pretty big disconnect between the physical and paper markets as far as anyone's concerned.

greenskeeper carl's picture

Not seeing that here(east coast of central FL). My LCS has eagles and maples for 19, rounds and gen bars for 18. He had 5, 10, kilo, and 100 oz bars too. Don't know the premium on those, didnt ask. He had those big aussie kilo coins, and a couple 100 oz bars. There were the usual stacks of 1, 5, and 10 oz bars. no shortage, just paying a 15-20 % premium, as you would expect. Same with gold. Its been a few weeks since I pai attention to his gold, but when gold was around 1135, he had eagles and buffalos for 1194.

 

The only thing he didnt have that is usually there is the tray full of junk silver and there are usually all the coins from the major govt mints from around the world, only the US and canada. but silver and gold could be purchased for the normal(these days) premium

Dickweed Wang's picture

My LCS has eagles and maples for 19 . . .

I was actually talking more about on-line sales but even at $19/coin that's almost a 30% premium over spot right there.

Kaiser Sousa's picture

pretty much the same story at mine on monday when i stopped in to get their take on the situation...

nothing in bulk...just an assortment of stuff...no 100 or 10oz bars....

mostly a bunch of metal that i woudlnt normaly purchase...ive become picky as now i buy what i like having reached the oz marks i set back in 2008...

picked up the 5 old School Libertads they had...paid $20 and change just cause i love those coins...

Conax's picture

The miners ought to go find more profitable pursuits.. Have you seen the price of decent apples? Those things are more precious than silver.

You guys should go pick apples.  At least until Jamie and his crew start shorting the piss out of them, too.

nmewn's picture

All this gloom & doom.

Let's pick it up a bit...everyone remember when Gibson Guitar was raided by the Feds? Of course you do...well, this is what you need to know...

"As the most legendary solidbody electric guitar of all time, the Les Paul just had to play a part in our celebration of an infamous moment in Gibson’s history: when the Feds confiscated stocks of precious tonewoods from the Nashville factory. The Government Series II Les Paul makes a bold statement for any revolutionary rocker, using the wood that the Feds ultimately returned to Gibson (Edit: After paying Gang-Member-in-Chief the extortion tribute of $500,000 and a parlay with another pack of pirates of $50,000 to the Fish & Wildlife Foundation) after the resolution and the investigation was concluded. The original foundation of carved maple top and mahogany back with modern weight relief for improved playing comfort and enhanced resonance is dressed up in a vintage-gloss Government Tan finish, with the Government Series II graphic on its black pickguard (in the case pocket)—a bald eagle hoisting a confiscated Gibson guitar neck—and black chrome hardware. A genuine piece of Gibson history comes in the form of a solid, one-piece rosewood fingerboard made from stocks returned after the resolution, and each guitar includes a Certificate of Authenticity signed by Gibson CEO Henry Juszkiewicz. Scorched-earth tone is assured by a pair of Dirty Fingers+ humbuckers, among Gibson’s hottest pickups ever."

Oh yeah baby.

http://www.gibson.com/Products/Electric-Guitars/Les-Paul/Gibson-USA/Gove...

So, I guess the principle of the wood wasn't as important as the money afterall ;-)

greenskeeper carl's picture

wow. I thought that was just hyperbole until i clicked on the link. that.is.fucking.awesome. the government, creating libertarians with their own stupidity one person at a time.

nmewn's picture

Sometimes the cold truth really does look like Pirates of the Carribean type hyperbole, until one really drills down into it. Arrr, thar be gold in dat der mast of Queen Gibson...arrr...avast me hearties you son's of dog's!...let's ravish her booty and be away with it!!!...arrrr...lol.

OldPhart's picture

What is more awesome is that Zero Hedge covered it in 2009. 

There is less bullshit in Zero Hedge articles, other than Mike Snyder, than is to be believed.  ZH seems to have an instinct for bullshit years before it's declared bullhsit.

mijev's picture

Thanks for the link mnewn. I have 17 guitars stashed around the world and not a single LP. Simple reason is that I broke my left collar bone when I was a kid - right where the strap sits - and always sought out lightweight guitars. But those are very nice looking to me. And they make a political statement which in this case in pretty cool.

nmewn's picture

Welcome sir.

It was always of personal interest to me on many levels. Making the statement shows balls, you can take my shit (of course) cuz you have more guns and have contrived some sort of law to your side.

You cannot take take my freedom however, unless you kill me in front of everyone here.

Then I win.

Checkmate ;-)