Silver Eagles - Production Problems and Pronounced Premiums to Persist

[pmbug]

...
Michael Fuljenz, president of Universal Coin & Bullion and chair of the National Coin and Bullion Association American Silver Eagle sales committee, said that there are systemic issues impacting the production and supply of American silver bullion coins. He added that these issues could continue to persist in 2023, which means consumers will continue to face persistently high premiums.

Fuljenz said the biggest problem is that the mint buys silver blanks from private mints. Blanks are silver disks that are then transformed into coins.

Analysts have noted that the U.S. Mint has had difficulty maintaining its supply of blanks as it competes with growing overseas demand.

"The U.S. Mint either needs to start making their own blanks or be more competitive and pay more or loosen their conditions when it comes to buying them," said Fuljenz. "If the Mint had more blanks, they would probably have had sales matching 2020 and 2021, and premiums would not have risen from about $3 over the spot silver price to $14 over the spot silver price in two years."

Tom Power, president, and CEO of Sunshine Mining, which supplies the majority of the U.S. Mint's silver blanks, said his company is running at full capacity trying to keep up with growing global and domestic demand.

He added that the silver market continues to deal with supply chain and production issues, particularly a shortage of skilled labor.

"There is no shortage of silver or the raw metal out there, but there are still ongoing production issues as we all continue to suffer from a labor shortage," he said. “This has been going on for two years now and we could see it last another year or two."

Power added that even if he could increase capacity at Sunshine, it would take 12 to 16 months to get the equipment he would need.

"We are giving the U.S. Mint everything we can afford to give them," he said.
...

This is why you will see high premiums on American Eagle silver coins in 2023

Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices

www.kitco.com

 

[Farpdinkle]

From the article:

Millman also pointed out that the Perth Mint's record performance in 2022 indicates robust global demand.

Although consumers could continue to face higher premiums through 2023, Millman said that healthy demand in the East is a strong indicator that prices will eventually rise.

"Traditionally, investors in the East are not looking to buy gold to make a quick profit but are concerned about preserving their wealth and hedge against ongoing currency debasement," he said. "Those dynamics are good reasons why we see gold flowing to the East."

Millman said that he expects the tide in the precious metals market to shift when gold prices rise to $2,000 an ounce.

 

[nickndfl]

Once all the existing inventory is absorbed and we are down to daily production releases you will see some shortages. Sure there will be secondary sellers, but right now prices are rising.

Many missed a great PM buying opp just before Thanksgiving.

 

[walkingnam]

The only problem with trying to buy at Thanksgiving is that the 2023 ASE's aren't for sale then. I'm told that the 2023 ASE won't be out for two weeks yet. So we're out of luck - - again.

 

[Joe King]

This issue is that the mint is legally limited as to how much they can pay for planchets.

From the article:
Analysts have noted that the U.S. Mint has had difficulty maintaining its supply of blanks as it competes with growing overseas demand.

"The U.S. Mint either needs to start making their own blanks or be more competitive and pay more or loosen their conditions when it comes to buying them," said Fuljenz.

How could it have "difficulty" maintaining it's supply if....."There is no shortage of silver or the raw metal out there,?


The issue is that the law prohibits the mint from paying much more than spot, and if silver can't actually for anywhere near spot, that means the mint will have "difficulty maintaining its supply of blanks as it competes with growing overseas demand".


From the SUPPORT OF AMERICAN EAGLE SILVER BULLION PROGRAM ACT of July 23rd 2002,

The Secretary shall not pay more than the average world price for silver under any circumstances. As used in this paragraph, the term `average world price' means the price determined by a widely recognized commodity exchange at the time the silver is obtained by the Secretary.''.

"Average World price", is what is known to us as the spot price.

Just another article where they beat around the bush and don't say what the real deal is.

 

[Winston_Room101]

Seems to me
that there is ALWAYs hype
at the beginning of a new year
with regard shortage of metal

..

 

[Goldbrix]

"Average World price", is what is known to us as the spot price.

On that I throw the BS Flag. It is well known that the cabal of JP Morgan ( Proxy for US Treasury) LBMA, Swiss National Bank (SNB), and Deutsche Bank (DB) all participate in the AM / PM pricing of Gold and Silver in the western markets.
Most notice the Spot prices increase during the Asian markets open hours, and usually get hammered down as the West markets open.

 

[Joe King]

On that I throw the BS Flag. It is well known that the cabal of JP Morgan ( Proxy for US Treasury) LBMA, Swiss National Bank (SNB), and Deutsche Bank (DB) all participate in the AM / PM pricing of Gold and Silver in the western markets.
Most notice the Spot prices increase during the Asian markets open hours, and usually get hammered down as the West markets open.

Totally agree that it is manipulated, but the law says they must buy at the spot, or close to it.

So really, this is a problem of their own making.

 

[pmbug]

I'm not generally interested in numismatics, but if the US Mint has very limited production(s), 2023 might be a good year for obtaining numismatics.

 

[Cigarlover]

The US gov breaks laws left and right but on this 1 particular issue they want to obey the law....

 

[Goldbrix]

I believe the Mint still has equipment to create planchettes from sheet silver and gold, but for decades it was cost effective to buy the market. Less overhead with employees and maintenance of the machinery.
Now the want to play dumb.
YMMV

 

[walkingnam]

The mint paying premiums for their silver is still a addition to the cost of doing business. I don't know if this is bs but the lcs charges you a premium to do business (purchase) with them. Then the lcs is charged a premium for the privilige of being able to have the stock on hand to sell to you. (Or so my lcs is telling me.)

The US Mint has been in the habit of selling their product at extremely high premium for many years now. They are selling the 2022 ASE for $73 when the current market price of silver is $23.92. All of the mint employees seem to be able to afford to take an European vacation now and have been for years now. Unless their management has been taking it for them. The only one making a killing on coins is the US Mint. The mint seems to have copied their business pricing from the Oil industry. Soak the consumer.

 

[walkingnam]

Someone check this out. I have been told that the 2021 ASE type II is a must have. 2022 production and sale was low with the hype for the 2023 as having production problems with an estimated drop in coin availability because the mint can't pay premiums on precious metals. Then why is the price of ASE three times the price of mined silver. The weight of both the government's and mint's hand in my pocket is staggering.