By Arpan Mukherjee
Silver coins are gaining favor among investors and
sales could rise to a record high in 2013, thanks to a sharp fall in the
precious metal’s price.
Demand for silver, which is sought after by investors and industrial
users alike, is expected to rise, consultancy Thomson Reuters GFMS said
in a recent report. The industrial sector accounts for about 45% of
global silver consumption, it said.

- One-ounce silver bullion coins at the U.S. Mint.
- Bloomberg News
“Physical demand [for silver coins] surged this year, and is expected to grow by 19% year on year,” the consultancy said.
Spot silver traded on on the Comex division of the New York
Mercantile Exchange fell to $18.24 a troy ounce in late June, the lowest
in almost three years, boosting its attractiveness to investors. The
metal was down around 32% at $20.71 an ounce Thursday.
But sales of silver coins are “poised to match record sales levels
witnessed in 2011,” Thomson Reuters GFMS said, adding that spot silver
prices are likely to rise and average $24.24 an ounce in 2013.
Already, sales of the U.S. Mint’s American Eagle silver coins have
surpassed 2012 levels, as investors are snapping silver coins up “at a
breakneck pace,” said Dallas-based precious metals dealer Dillon Gage
Inc.
The dealer expects
American Eagle silver coin sales in the U.S. to exceed a record of
39.868 million troy ounces set in 2011. Silver coin sales totalled 39.17
million ounces in the 10 months ended Oct. 31, eclipsing the 33.74
million ounces sold in 2012, it said.
“Eagles are one of the most convenient ways to invest in silver
bullion. They are much easier to sell, store and transport than large
silver bars,” said Terry Hanlon, president of Dillon Gage.
In Asia, silver coin demand has been increasing since the start of
the year, said Zane Lim, regional manager at precious metals dealer
Bullionstar.com.
“American Eagle silver coin is the most popular product in our
portfolio,” Mr. Lim said. “For a new investor, silver is attractive and
coins are easier to purchase with greater liquidity compared to bars.”
Coin buyers are usually long-term investors, analysts said, and
global economic uncertainties have pushed investors toward gold coins.
Data from the U.S. Mint showed demand for
American Eagle gold coins
is on track to exceed last year’s, with 752,500 ounces sold between
January and October, just short of 2012 sales of 753,000 ounces.
Worries about the stability of the U.S. federal government amid a
16-day partial shutdown in October helped boost American Eagle gold-coin
sales to 48,500 ounces last month, more than triple the 13,000 ounces
sold in September.
But demand for
silver coins remains stronger than that for gold coins, partly because
each ounce of gold costs about 60 times more than silver. Also, silver’s
greater volatility compared to gold makes it attractive to investors
with a large risk appetite, Thomson Reuters GFMS said.
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