Gold Magazine January - February 2014, Issue 34 | Page 67

precious metals

Silver Prices Fall but
Demand for Coins Grows

{money}

Investors see the metal as an alternative way of preserving wealth.

T

he sharp fall in the
price of gold and
silver in early 2013
caused a wave of
pent-up demand for
coins and bullion.
Observers say that
it was not surprising
that silver sales hit records: not only did lower
prices enticed consumers to buy more physical
metal but, in India in particular, consumers
have been substituting silver for gold because
of strict import restrictions put in place in
mid-2013 which focused primarily on gold.
The banking crisis in Cyprus earlier in the
year highlighted the fragility of the global
banking system and many people ended up
buying other assets to preserve their wealth.
Partly due to its lower price compared to gold,
silver has always been a popular alternative.
Although the crisis has abated since March,
there is still a strong distrust of the global
banking system, which is why consumers and
investors are buying silver and gold on price
drops. If you hold a silver or gold coin, you
are not a creditor to the banking system; you
are holding real money.
Of the top 3 global mints, the US Mint
was first in volume, selling 42.4 million 1-oz
American Eagle Silver coins in 2013. It hit
a new record in mid-November when it
reported sales of 40.1 million, surpassing the
prior record set in 2011, when it sold 39.8
million coins.
The US Mint saw average monthly sales
of 3.5 million coins. The busiest month was
January (7,498,000 sold) and the slowest was
November (2.3 million).
The Canadian Royal Mint came in 2nd
for its silver coin sales, though the data
does not include the last 3 months of
the year. As of the end of September,
the Canadian Mint had reported
total sales of 19.7 million ounces of
its Silver Maple Leaf coins in 2013.
For the third quarter, the Canadian
Mint reported silver sales of 6.7 million

ounces, an increase compared to Y2012’s Q-3
sales of 4.8 million ounces. It has predicted
that it will pass 2011’s sales record of 23.1
million ounces.
“Silver Maple Leaf coin demand continues
to be very strong in key markets such as Canada, the US and Europe,” the Mint said in Q-3
financial report. “The Mint cannot predict the

Most analysts
were wrong with
their silver price
projections in 2013
precious metals market, but performance of
the bullion… business should remain robust.”
The Perth Mint came in 3rd, selling
7,799,000 ounces of silver in 2013. Perth’s
busiest month was in April when the Mint
sold 1,113,000 ounces. April was also when
silver prices fell 21% from a high of $27.965
an ounce on April 10 a low of $22 six days
later.
The Perth Mint is moving forward with its
plans to break ground on a new Silver blank
production facility, which is expected to be
operational by 2015. But although 2013 was