In this weekend’s Metals and Markets with Bill Murphy, we noted weak Silver Eagle sales over the past 2-3 weeks, and advised we anticipated 2016 Silver Eagle coins to come off of allocation by the US Mint within the next couple of weeks.
We only had to wait until Monday, as we received the following notice at SD Bullion from the US Mint moments ago:
We suspect that the near complete lack of Silver Eagle coin sales by the US Mint over the past 3 weeks was due to the AP’s front running this announcement and selling down their inventories.
Once the Mint ends allocations, the Mint counts each coin purchased by the APs, and their purchase numbers during the “times of plenty” are used to determine each AP’s allocation numbers the next time the Mint begins allocating Silver Eagle purchases.
Assuming the US Mint telegraphed this announcement to the APs, our suspicion for the sudden drop-off in Silver Eagle coin sales the past 3 weeks has been confirmed, as the APs frantically attempted to liquidate inventory to situate themselves into the best possible position for day 1 post Silver Eagle allocation.
This means that Silver coin demand has in fact NOT fallen off a cliff the past month (as we alluded to in our weekly Bullion Market updates), and the numbers being analyzed was simply a short term phenomenon of US Mint APs attempting to reduce inventories to position themselves for the end of allocations.