On Monday, Jan. 7, the U.S. Mint began taking orders for 2013
American Eagle silver coins. Officials were bracing for an
onslaught of sales, but I doubt they were expecting this. By the
end of the day, the Mint had sold more than 3.9 million of the
1-ounce 99.9% silver coins.
Silver may be trading well off its highs above $40 per ounce,
butinvestment demand has never been stronger. That opening day
marks the highest one-day tally in the history of the Silver Eagle
program dating back to 1986.
The U.S. Mint sold out of 2012 silver coins early (Dec. 12,
2012), so buyers were understandably eager for the release of the
2013issue . And opening day in general is typically busy. There
were nearly 2.1 million coins sold on the first day they were
available in 2011.
Still, this year's kickoff nearly doubled that. In fact, the 3.9
million Silver Eagles sold on Jan. 7 were more than the entire
total from any month between 1986 and 2009.
Lest you think this was just a one-day phenomenon, I should say
that dealers, collectors and speculators gobbled up another couple
million coins in the following week. By Jan. 17, sales had soared
past 6 million.
And on that day, authorized buyers received this notice:
"The U.S. Mint has temporarily sold out of 2013 American Eagle
silver bullion coins. As a result, sales are suspended until we can
build up aninventory of these coins."
Sales resumed later in the month, but even then coins were
rationed among primary distributors. All told, Silver Eagle sales
passed the 7 million mark, surpassing the record of 6.1 million set
in January 2012.
Clearly, investors have a hearty appetite for physical silver --
and they're expressing interest in other ways as well.
Following an unprecedentedcash inflow in January, the
iShares Silver Trust (NYSE:
is now brimming with about $9.5 billion in assets. Investors poured
a record $603 million into theexchange-traded fund (
) in a single day on Jan. 16, stockpiling 18.4 million ounces (572
tons) of silver in thefund 's bank vaults. The fund's total assets
now stand at around 342 million ounces.
And that's just one fund.
Investment through silver-backed
now stands at a record of 19,114 tons globally, according to
Bloomberg and Barclays. For the record, those holdings are
equivalent to about nine months of mine output.
It's amazing to think that ETFs -- a source of demand that
didn't even exist 15 years ago -- have now hoarded nine months of
silver production. And there are plenty of buyers fighting over the
Aside from coins and other investment demand, remember that
silver is also a versatile metal with many commercial uses. And
with the auto, manufacturing and construction sectors all
rebounding, industrial demand is intensifying, particularly in
A recent study by Thomson Reuters forecasts that industrial
silver usewill rise to 511 million ounces next year,accounting for
57% of the world's silver production -- a new record high. With
investors and industrial buyers tugging silver in the same
direction, the metal is poised for continuedgains in 2013.
Action to Take -->
All of this is welcome news for several of my
Scarcity & Real Wealth
holdings. One of my holdings just posted its eighth consecutive
year of production growth.
The company dug up nearly 4.5 million ounces of silver in 2012,
a solid 20% increase from 2011 (incidentally, the firm's gold
output soared 77%). Management chose to stockpile much of its
fourth-quarter production as inventory rather than sell it. That
move looks to be prescient given today's stronger prices.
All told, if you sold out of silver when it was at its highs
above $40 an ounce, then now may be a good time to reconsider
getting back into the game.
-- Nathan Slaughter
P.S. -- If you've been looking to add resource stocks to
your portfolio, now may be the time. The global trend for
commodities is rising demand coupled with shrinking supplies.
That's why we've seen soaring prices for years... and it means
short-term sell-offs can be rare buying opportunities. To learn
more about Scarcity & Real Wealth, which focuses solely on
the market's best resource investments, visit this link (without
watching any promotional video).
Nathan Slaughter does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC does not
hold positions in any securities mentioned in this article.