High Demand, Higher Price|
December 27, 2013
The U.S. Mint will start selling the 2014-dated silver American Eagle coins Jan. 13. What can we expect for availability and premiums?
Last year, the U.S. Mint was unable to meet demand and began rationing supplies to the Authorized Purchasers before the end of January. The Mint is being even more cautious now, warning the APs even before the first release that supplies may again be rationed.
In response, the APs are quoting higher than normal premiums of $3 or so per coin, about 50 cents per coin higher, than applied during normal markets in 2013, to early buyers. Further, to protect themselves against overselling what they can deliver quickly, the APs are not promising that customers ordering early will be able to get shipments from the first or any particular release of the U.S. Mint.
Such limitations increase the appearance that 2014 silver Eagles might be rare. For that reason and also for silver prices today that are much lower than a year ago, I’m sure that early demand will be even stronger than it was at the start of 2013. Don’t let yourself be drawn into the frenzy. The U.S. Mint sold more than 42 million silver Eagles in 2013. I would not be surprised to see even stronger demand in 2014. They will not be rare coins.
I anticipate that a significant percentage of the earliest releases of 2014-dated silver Eagles will be sent to the grading services hoping for the slightly elusive MS-70 grade in holders marked Early Release. In the long-term, I don’t think these will be worth any significant premium. Just look at what happened last year. Between them, the Professional Coin Grading Service and Numismatic Guaranty Corporation graded more than 140,000 2013-dated silver Eagles as MS-70. I repeat, these coins are not rare.
Another point to consider, for those not purchasing the sealed boxes of 500 coins is that you may well receive coins that were the rejects from PCGS or NGC as not meeting the MS-69 or MS-70 grades. In other words, the individual rolls you may purchase early on could be of lower average quality than coins that were never sent to the grading services. If you do purchase smaller quantities, you should ask the seller if the coins offered are from fresh sealed boxes or if they are grading service rejects.
For large retail purchases of 2014 silver Eagles, expect early on to pay around $3 or so above the spot price. If the Mint is able to keep up with demand, this premium may fall 25-50 cents per coin in the following months.
After a major price drop over the course of 2013, I anticipate that the 2014 result will be a net increase. At worst, I don’t see much prospect for more than a 5-10 percent drop from current spot prices. Even though silver Eagle premiums may be a bit elevated at the start of 2014, the lower silver spot price could make them attractive values anyhow.
Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.
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On December 30, 2013 David
On January 1, 2014 DrJimmy
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