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Cold Sea

The Big Silver Sale

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Cold Sea

The US mint last week ran out of stock of their newly released American Eagle proof 1 ounce silver coin, selling 4.2 million coins within a week and a half. They intend minting and releasing another 3.2 million coins before the end of the month, which adds up to 7.4 million coins!

 

US mint sells these for $62.95, and they successfully resell for around $75.00 on e-bay. Given the silver price of around $32.00 and added production costs, this seems to work out to a tidy profit for the mint.

 

The coin consists of 99.9% silver and weighs 31.1 grams or 1 ounce, and resale in rand terms is about R675.00. Given past comments on this forum about SA Mint’s pricing structure for their silver commemoratives, I found the following interesting.

 

A 2012 proof Gautrain R2 silver commemorative weighs in at 33.626 gram and contains 92.5% silver, which works out to 31.1 grams or 1 ounce silver, the same as the US Eagle. A current buy now listing on BOB asks R695.00. The complaint against the SA mint making excess profits on these silver coins seems to fade, given the amount of coins minted by the SA mint (1000) against the US Mint’s.

 

Some say the US public are buying these Eagles in anticipation of the pending collapse of the current financial systems and a return to the bits and bobs system. Why then don’t they buy the Gautrain silver, the Canadian Maple Leaf and other certified proof coins which are available and at the same price. I think the answer lies somewhere in the Mandela coins. It has some investment value, is flavour of the month, but above all a patriotic thing, something which the US public seems to be big on and South Africans are working hard at.

 

All in all it can only be a good thing as it keeps numismatics in the spotlight.

Edited by Cold Sea

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jwither

I believe you have the proof and "business strike" version mixed up. I just checked the US Mint website and it is listed as "in stock". Also, the prior high mintage through 2011 (I could not find 2012 in a quick search) was in 1986 at about 1.4MM.

 

I believe that comparing the mintage between the US and SA issues is an apples to oranges comparison. I'm not particularly interested in buying either but the demand for ASE is absolutely huge. Even the so-called "business strikes" are widely collected today. I consider the "key" dates vastly overpriced since the mintage for any special issue strikes (both proof and others) are a minimum of 30,000 but there are easily hundreds of thousands of collectors for these coins.

 

As to why Americans do not buy others generally, I attribute it to the same reason which accounts for only 20% of US citizens even having a passport. I do not think they even bother to consider it and because of this, most others are far less liquid. For bullion, I consider the Canadian Maple Leaf equivalent to the ASE as my first choice but it's not that widely collected to my knowledge and the same applies to all or most others except for Chinese Pandas and the British Brittanias. I would not be interested in buying SA Mint products as a silver bullion substitute.

 

I would rate the US Mint along with the Royal British Mint and the Royal Canadian Mints as the best marketing organizations in numismatics. It is a monopoly which any business person could only dream of having with such a captive audience.

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Cold Sea

Hi Jwither,

 

I believe you have the proof and "business strike" version mixed up. I just checked the US Mint website and it is listed as "in stock". Also, the prior high mintage through 2011 (I could not find 2012 in a quick search) was in 1986 at about 1.4MM.

It seems you are right.

 

Currently, the Mint is striking silver Eagle bullion coins at a rate of 800,000 to 1 million coins a week, he said, which is as fast as it can find supplies of silver blanks.

.

 

The mind boggles with these numbers, and on second thoughts I agree that these numbers can only be business strikes.

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