The Coin Analyst: Silver Maple Leaf Supplies Dwindling and Other World Bullion Coin News

By Louis Golino for CoinWeek …..
With all the excitement surrounding the U.S. Mint recently, some modern coin enthusiasts may not be aware of important new developments in the world bullion coin field.

Canada: On the heels of the U.S. Mint’s recent announcement of a temporary halt in sales of American Silver Eagles due to very high demand, there are reports that the Royal Canadian Mint may also be moving to limit sales of its Silver Maple Leaf coins to distributors because of tight supplies.

Jason Hamill wrote on January 23 in GoldStockBull.com that “Confirming this strain on physical silver supplies, just this morning the RCM (Royal Canadian Mint) went on allocation, limiting the quantity of sales of the popular silver maple leaf coin.”

He added: “So now the silver shortage has spread across the continent. Both dealers and wholesalers are reporting that the supply on Maple Leaf silver coins is now weeks backlogged. La Casa de Moneda de México (the oldest mint in the Americas) is the only mint in North America left with full supply of 2013 silver coins as of this point. Please note that many dealers still have supply, but this recent shift to allocation may signal an imminent shortage similar to the one seen on U.S. Mint Silver Eagles.”

I contacted Alex Reeves, senior manager for communications at the RCM, who could not confirm the developments at the RCM apart from the high demand for the mint’s silver coins. He stated that “Due to very high demand for SML (Silver Maple Leaf) coins, the Royal Canadian Mint is carefully managing supply to ensure all our distributors are served, and we continue to take orders.“ He added that the RCM does not disclose details about transactions between the mint and its primary distributors, of which there are few.

Silver Maple Leafs are very popular with silver investors because they carry a slightly smaller premium than do American Silver Eagles and some other silver bullion coins.

Mr. Hamill pointed out that physical supply shortages of silver have in the past often preceded spot price increases, so this situation bears watching, especially if you are a silver bullion investor. As many people, including myself, have noted, the disconnect between paper silver markets and the real world of physical silver trading will eventually result in much higher silver prices.

As Mr. Hamill and others have noted, the laws of supply and demand will eventually reassert themselves when the manipulation of paper silver markets falls apart. That would presumably happen when a sufficient number of buyers opt to take delivery of paper silver contracts, and it is revealed that there is not nearly enough silver to cover those deliveries.

On January 24 the U.S. Mint released the 2013 American Silver Eagle proof coin, and sales began without any interruptions of service on the web site.  Buyers reported being able to place their orders without problems.

Demand for this year’s coin could increase because of the halt in bullion coin sales from the Mint to its distributors, but the Mint would presumably not have gone forward with this release if it did not have a large supply of coins on hand.

United Kingdom: The Royal Mint in the UK made some changes to its popular lines of Silver and Gold Britannias for 2013.

These coins in the past were not made of pure silver and gold and contained less than a full ounce of the metals. The fineness used to be 91.67% but now it will be 99.99%.

Starting with the 2013 coins that were released in late 2012 these coins will now contain exactly one ounce of pure silver, which is designed to make the coins more competitive with other world silver bullion coins.

That strategy appears to be working since sales during the initial release period of the gold coins are up 60% compared to a year ago, and sales of silver coins are up a whopping 275% compared to a year ago, according to the Mint.

In addition, in the past the reverse design of the coins usually changed each year, except for a couple of years when it did not.  For the 2013 coin, the Mint has returned to the Britannia design first used in 1987, when the coins debuted. It is unclear whether the coins will in the future continue to use the same image on the reverse, or if the Mint will return to changing designs at least some of the time.

For reasons that are not clear, there are numerous reports that the 2013 coins frequently have quality problems. I can confirm that the two silver Britannias I purchased from an American dealer who usually sends me very nice coins did have some obvious flaws. My coins from earlier years are of higher quality.

Long-time British dealer Lawrence Chard has written in detail about these quality problems. Mr. Chard reports that the Mint says the problem concerns how the coins are removed from minting machines.

Mexico: Last year the Mexican Mint caused some excitement in the numismatic world by not releasing the full line-up of Proof Silver Libertad coins it usually does. No reason was given for the change.

Silver Proof sets with one of each denomination of Libertad from 1/20-ounce to one ounce were not issued. Instead only the one ounce Proof coin and a special set which included that coin and the half-ounce BU coin was released. The sets were limited to 1,500, and it was recently revealed that only 4,200 total Proof coins were issued, including those in the sets. That is not the lowest mintage for a Proof Libertad, but it is low enough to drive prices for the coins higher. They were initially available for $70, and are now selling for $100-200.

For 2013 the Mint will be returning to its normal release line-up with silver Proof sets, two- and five-ounce Proof coins, and the usual array of BU coins that includes everything from 1/20-ounce to five-ounce coins. There is also a breathtaking one-kilo coin that comes with a proof-like finish that comes in an impressive wood box and is usually limited to 1,500 units. The 2013 BU coins were just released, and I received some coins last week in all sizes except the 2 oz., which I will get with the proof coins that will be coming out in about a month.

Silver Libertads normally come out later than other world bullion coins, but this year they are being released much earlier than usual. Silver and gold Libertads are beautiful bullion coins that are issued in much smaller numbers than other world bullion coins.  A number of the gold coins have mintages as low as 500, but can sometimes be purchased, when you can find them, at reasonable prices. I consider them to be the biggest sleeper bullion coins in the world, and many have already seen their values increase substantially such as the silver kilos

Australia: The Perth Mint in Western Australia came under a lot of criticism in recent months for not being as forthcoming about total mintage figures as collectors want them to be, so the Mint announced a change under which it will indicate total mintage for coins across all product options.

More recently, the Mint has announced another change. It will no longer be reminting coins issued in past years that have not sold out of their total authorized maximum mintages. This is another step that collectors of Perth coins will welcome.

China: China is once again issuing eight million of its popular silver Panda coins, as it did in 2012. That is a big increase over previous years, but as I explained last year, the increase is designed to meet the exploding domestic demand for silver and other precious metals within China.

In addition, the 2013 silver coin for the first time feature three Pandas: two adults and a baby. The coins are also issued in various sizes in gold from 1/20-ounce to one-ounce coins.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

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