Coin Blog

By memorandum to its network of authorized bullion purchasers, the United States Mint outlined its latest steps to deal with the unprecedented demand for gold and silver bullion coins. The new measures including halting production for some options of Gold and Platinum Eagle bullion coins.

According to the memo, most fractional Gold and Platinum Eagle options and American Buffalo coins have been halted for the remainder of 2008 or will be halted after current supplies of blanks are exhausted. The US Mint will concentrate on producing one ounce Silver Eagles and one ounce Gold Eagles.

The memo is included below:

October 6, 2008

MEMORANDUM TO ALL AMERICAN EAGLE AND AMERICAN BUFFALO AUTHORIZED PURCHASERS

SUBJECT: 2008-Dated Bullion Products

Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high.

The United States Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the United States Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins.

For the remainder of 2008 bullion inventory, the following will apply:

American Eagle Gold Bullion Coins

One Ounce Coins will remain on allocation each week. Allocation amounts are based on available quality blanks each week.

One Half Ounce Coins: Inventory was depleted last week. No more coins will be produced for 2008.

One Quarter Ounce Coins: Inventory was depleted last week. No more coins will be produced for 2008.

One Tenth Ounce Coins: Inventory was depleted last week. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale.

American Buffalo One Ounce Bullion Coins

Inventory was depleted and sales were suspended in late September. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale.

American Eagle Silver Once Ounce Bullion Coins

American Eagle Silver One Ounce Coins will remain on allocation each week. Allocation amounts are based on available quality blanks each week.

American Eagle Platinum Bullion Coins

All denominations were depleted last week. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale.

We will keep you updated as more information becomes available.

Mint News Blog provides some perspective on what this might mean for the US Mint's so-called collectible versions of the bullion coins such as the Uncirculated coins bearing the "W" mint mark and the Proof coins. Read the full post  US Mint Halts Gold & Platinum Eagle Production.

As readers of this blog will know, there is an ongoing shortage of 2008 Silver Eagle bullion coins.  Early in the year the US Mint actually temporarily suspended sales of the coins to authorized Purchasers.  Following the suspension, the Mint started a policy of rationing the 2008 Silver Eagles to dealers at quantities below market demand.

This caused a bit of outcry, including a widely discussed Wall Street Journal article on the topic.  Also open letters to the US Mint Director and US Secretary of the Treasury from concerned organizations and individuals.

Last week, more problems came to light which will cause the current rationing of Silver Eagles to get even tighter.

The US Mint sent a memorandum to authorized purchasers informing them that the Mint's supplier of silver blanks used in producing Silver Eagles would be reducing their shipments by more than half.  The Mint further indicated that they would stop using silver blanks for other purposes such as collectible coins.  This is clearly becoming a very serious issue impacting precious metals investors and coin collectors.

The Wall Street Journal had an interesting article today covering the ongoing shortage of 2008 Silver Eagles.

The article explained that the US Mint has been so overwhelmed with orders for the popular bullion coins that they were forced to stop taking orders.  They recently resumed sales of the coins last month, but are rationing how many each authorized dealer can order.

Overall year to date sales of 2008 Silver Eagles are running at more than double the pace of last years sales.

The article linked the shortage to the "growing love of commodities" and took quotes from some new collectors of the series and silver bullion.  The people interviewed were not coin collectors, but a judge and an accountant seeking an investment alternative to the stock market and real estate.

On the whole, the coverage is factual and pretty balanced.  It ends with a reminder of how the last boom in silver ended.  In the 1980's speculation pushed the price of silver over $50, only to plunge soon afterwards.  I don't think the market is anywhere near this kind of speculative peak, but its always good to keep the lessons of the past fresh in our minds.

The most desirable coin of the American Silver Eagle series is the 1995-W Proof Silver Eagle. It is considered the key date coin of the series.

The story behind the coin is an interesting one. It was issued under special circumstances that resulted in a shockingly low mintage. Such a low mintage will likely never be seen again in this series.

The 1995-W Proof Silver Eagle was issued as a special bonus coin for the 1995-W Proof Gold Eagle 4 Coin Set. The purpose of the bonus coin was to celebrate the 10th Anniversary of the series. The set carried a high price tag because of the gold content, putting it out of reach of many Silver Eagle collectors.

Because of this unique set of circumstances, the final mintage of the coin was only 30,125. Coins are always in high demand and sell for at least $4,000. Examples graded PR70DCAM can sell for well into five figures.

A exciting new variety has recently been discovered for the 2008-W Silver Eagle Coin.

This variety is found on the "collectible version" of the 2008 Silver Eagle which is only available directly from the US Mint.  These versions are different than the bullion versions because they carry the "W" mint mark to indicate the West Point Mint.

The variety has to do with the reverse design of the coin.  The design was slightly changed from 2007 to 2008.  Some 2008 coins bear the 2007 design and are being designated "Reverse of 2007."

The easiest way to spot the 2008-W Silver Eagle with the Reverse of 2007 is by the letter "U" of "United States" on the reverse of the coin.  Coins bearing the 2007 style reverse will have a bowl shaped "U."  Coins bearing the 2008 style reverse will have a spur at the bottom of the right side of the letter.

Prices for the variety seem to be going up quick so keep an eye out for these or check your coins carefully if you have any in your collection!