Mint News Blog

News, Information, and Commentary on US Mint Products

Wednesday, November 7, 2007

Silver Also Rises, Will the Mint Suspend Burnished Silver Eagles?

As readers of this blog know, the Mint suspended sales of Burnished Gold Eagles on Monday when the price of gold broke decisively above $800 per ounce. With the price of silver now rising daily, is a suspension of Burnished Silver Eagles next?

Briefly this morning, the price of silver exceeded $16 per ounce. At the time of writing this post, the spot price is $15.77. This marks another fresh 27 year high for the metal.

The Mint's mark up on the coin above the bullion price has now declined significantly. When the 2007-W Uncirculated Eagle was first offered, the price of silver was around $13. At the $21.95 offer price, that gave the Mint a markup of about $9 per coin. As of today, their mark up has declined to a little over $6 per coin. The markup presumably covers the Mint's cost of production, packaging, advertising, distribution, and some profit margin.

Although suspensions in gold and platinum products have become common, I don't recall an occasion when the Mint ever had to suspend sales of silver based products. As such, there isn't much precedent for determining when the Mint needs to pull the trigger. However, if I had to venture a guess, I would say that the Mint would need to seriously consider the possibility if the price of silver reaches $17 per ounce. This would nearly cut their initial markup in half and perhaps make sales of the coins unprofitable.

If you were putting off purchasing the Burnished Silver Eagles, now is the time. They may not last much longer.



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