Soaring Eagles, Surging Demand, and Silver's Surprising Affordability!

The US Mint is selling an unprecedented number of American Silver Eagle bullion coins. An all-time record was smashed in 2013 when 42,675,000 Silver Eagles were purchased during the calendar year. The 2013 Silver Eagle sold out on December 10th. The 2014 Silver Eagle did not debut until January 13th and sales were initially rationed. Still, 2014 is on pace to beat last year’s sales figures which begs the question … what is driving this historic run on Eagles?

Both the Silver and Gold Eagle are the most popular one ounce bullion coins in the United States. The Silver Eagle, however, has captivated worldwide attention. There were more Silver Eagles sold in the first week of May than all of the Gold Eagles for 2012, 2013 and thus far in 2014 combined. That is an astonishing feat for any bullion coin. Since it was first issued back in 1986, there have been over 350 million Silver Eagle coins sold around the globe. It is clearly one of the most popular bullion coins in the world and the only 1 troy ounce, 99.9% pure silver coin made by the US government.

So what is it about the Silver Eagle that the world cannot get enough of? It’s an attractive coin that boasts the exquisite detail of “Walking Liberty” on the obverse, and the distinctly American symbols of the heraldic eagle, stars, stripes and shield on the reverse. While the Silver Eagle makes a popular gift and a striking collectible, it is also legal tender, IRA eligible, and pure silver guaranteed by the US Government.

Silver demand was up over 13% last year. While industrial applications are now the largest use category for pure silver, investment demand for silver coins and bars soared an astounding 76% in 2013. Jewelry demand also rose 9.6%.

In an investment climate that is highly risk averse, the ongoing creation of money by central banks and world governments continues to rattle nerves. As a result, silver has become the “go-to” metal of choice. Its extreme affordability has brought the safe haven benefits of precious metals to more investors than ever before. This “poor man’s gold” is also “everyman’s metal” and an ideal diversification tool. Suddenly, silver is finding its way into portfolios large and small and has become a staple on both Wall Street and Main Street.

As silver prices hover near a 4-year low, a unique opportunity has emerged to make a smart, affordable, long-term investment. Like gold, silver is a critical store of value in the face of sovereign debt. And like other physical assets, it offers protection from an unsteady dollar and wildly unpredictable markets. Where Silver sets itself apart, however, is in its endless uses and applications. Since it functions as an industrial metal as well as an investment metal, it enjoys demand when the economy is healthy as well as when it is not. It is the ultimate win-win physical asset … and perhaps the best part of all is that it’s a mere fraction of the price of gold.

So as Silver Eagles continue to soar, we are witnessing a rare market occurrence where ongoing rationing, limited availability, and critical supply shortages are not adding up to higher prices. The demand bonanza for silver continues to be fueled by its surprising affordability. Its low price defies market logic as well as supply & demand metrics and investors that are aware of where silver has been and the levels to which it could rise … continue to stockpile silver in all of its various forms.