American Silver Eagle coin is the best tool to benchmark the demand for physical silver. The sales number is very complete compared to other coins, and the demand is great all over the world.
In the first three months of 2013, investors were purchasing American Silver Eagle Coins at an average ratio of 48 to 1 to gold eagles. 48 to 1 ratio simply means for every 1 oz of American Gold Eagle Coin is sold, there are another 48oz of American Silver Eagle Coins are sold.
On April, ratio felt to 20 as investors found gold which dropped $200 in two days is a significant bargain. However, that does not mean silver did not gain investors’ attention. Total amount of American Silver Eagle coins sold in April was 4.087 million oz, which is higher than 2 previous months (February 3.369 million oz and March 3,357 million oz).
The ratio has went back up to 49 in May and slightly increased to 57 in June.
What I want to bring to your attention is the sales closed in July. US Mint has sold total of 4.407 million oz of silver, making July the second highest sales month for American Silver Eagle coins. (Traditionally, January is always the highest month due to market demand for new year design).
The ratio is 87, which means for every 1 oz of gold is sold, another 87 oz of silver is sold! (the following chart is slightly outdated as the figure does not reflect the final week in month of July)
Total sales number of American Silver Eagle (ASE) coin is another interesting number to watch. Since 2007, total oz sold by US Mint is increasing noticeably. It reaches the peak in 2011 with almost 40 million oz sold. The interest of ASE peaked in 2011 as silver price dropped more than 30% in early May 2011.
Another interesting year to watch is year 2013. The latest sales number released by US Mint is 29.45 million oz as end of July 2013. This number has exceed the total sales number for whole year of 2009 (28.77 million oz). It is only slightly below year 2010 (34.67 million oz) and year 2012 (33.74 million oz) respectively. It is also just another approximately 10 million oz difference from the all time peak in year 2011 (39.87 million oz). Without a doubt, 2013 will mark a new history for ASE total sales BEFORE year end.
The reason for such strong demand for ASE coins is due to low silver price and investors believe it is a bargain to buy silver at such cheap price. In fact, the demand for ASE coin was so great that US Mint has suspended their sales twice in the last 12 months (December 2012 and January 2013) – stating US Mint has to replenish their inventory.
Base on what happened in 2011 and what we are experiencing in 2013, apparently the lower silver price goes, the stronger the demand for physical silver. Silver is a precious metal that has limited supply on earth. The question is… how long can this sustain? And will you be holding physical silver when silver price explodes?
The following is one of the analysis in eBook Practical Guide For Investing Silver In Malaysia for American Silver Eagle coins:
In the eBook, you will also learn the analysis other silver coins, silver round and silver bar. You will learn what are the factors that you should consider before investing in any silver. In fact, there are some silver that you MUST totally avoid!
Practical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, tips and tricks for investing in silver. Click here to find out more.