The cheapest silver in five years is sending coin buyers buzzing.
At The Gold Center Inc., a Springfield, Illinois-based precious-metals dealer, sales of U.S. coins made from the metal are poised to increase 30 percent this year, said Jim Hausman, the company’s president. The jump mirrors a national trend, with sales by the U.S. Mint reaching an all-time high.
“Some people want to buy as much silver as they can when they see a big move in prices like we saw over the last couple of months,” Hausman said in a telephone interview.
Gains in physical purchases have helped New York silver futures to surge more than 20 percent since reaching a five-year low on Dec. 1. The price snap pushed the metal’s 60-day volatility to the highest this year. A jump in demand prompted the U.S. Mint to suspend sales in November for more than a week because of a lack of inventory. When the coins were again made available for purchase, it was on allocated basis.
“This has been a very strong year for us,” said Michael Kramer, the president of New York-based MTB Inc., a dealer authorized to purchase coins directly from the mint and sell to consumers. “It was especially busy on days prices took a big tumble.”
Silver futures for March delivery climbed 0.3 percent to $17.187 an ounce Wednesday on the Comex in New York. On Dec. 1, the metal reached $14.155, the lowest since 2009.
Purchases of American Eagle silver coins reached 43.051 million ounces through November, data on the mint’s website shows. That tops last year’s total of 42.7 million ounces, the previous full-year high, according to an e-mailed statement this week. There are still enough supplies to keep selling 2014-dated coins through the week starting Dec. 15, the mint estimates.
Buying has increased with futures heading for a second straight annual loss, the longest slump since 1992. The metal declined 11 percent this year, after dropping 36 percent in 2013.
With the Federal Reserve moving closer to raising interest rates, investor demand has waned for precious metals, which only offer returns through price gains. Silver has rebounded, with gains in three of the past four weeks, as central banks in Europe and Asia moved to increase stimulus.
“The beauty of coin demand is that it is a very good barometer of retail demand,” James Steel, an analyst at HSBC Securities (USA) Inc., said in a telephone interview. “We expect this very strong demand to support prices.”
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