While the numismatic versions have dominated collector attention, the United States Mint continues to release the bullion versions of 2011-dated America the Beautiful Five Ounce Silver Coins. After the first two designs quickly sold out, the third design has lingered, as the four design prepares for release.
Since these are bullion coins, they are distributed through a network of authorized purchasers (APs) and not sold directly to the public. The APs are able to purchase the coins from the Mint in bulk quantities based on the market price of silver plus a mark up of $9.75 per coin. The coins are then resold to other dealers and the public.
The US Mint began accepting orders for the first two designs for this year featuring Gettysburg National Military Park and Glacier National Park on April 25, 2011. The Mint indicated that an initial quantity of 126,700 coins for each design would be made available via allocation.
By the end of April, the APs had ordered 225,400 of the coins across both designs, representing almost 90% of the total quantity available. The US Mint announced a complete sell out of all 253,400 coins on May 16.
The following design featuring Olympic National Park was first available for ordering on May 23, 2011. By the close of the month, APs had ordered 73,400 coins, representing about 58% of the total quantity available. According to the latest available information, no further sales have been recorded for the current month to date.
Next week on June 20, 2011, the US Mint will begin accepting orders from authorized purchasers for the next design featuring Vicksburg National Military Park. Once again, the initial quantity available will be 126,700 coins. It seems possible that the pace of orders may be even slower than the prior release.
The slow down in sales for the five ounce silver bullion coins may be the result of a combination of factors. The significant increase in the quantity available is likely having an impact, as it takes investors and collectors time to absorb the supply. Collectively, all five of the 2010-dated bullion releases had production of 165,000 coins. Sales for the 2011-dated coins have already more than doubled this amount.
The turbulence in the silver market may have provided a boost to earlier sales. When the first two designs of 2011 were released, the price of silver was reaching new highs and physical silver inventories were getting tighter. The popular American Silver Eagles were in short supply as the US Mint continued to ration quantities, driving increased premiums on the secondary market. At the time, the America the Beautiful Silver Bullion Coins presented a great alternative to acquire physical silver.
Two months later, the US Mint managed to increase the number of American Silver Eagles available by adding production at the San Francisco Mint. This seems to be having an impact on the market, as shown by a decline in premiums charged by bullion dealers. With both silver bullion options on more equal footing, some may be turning back to the traditional Silver Eagles.
Seasonality may also be having an impact. Precious metals sales have generally showed a decline in activity during the summer. For the past two years, Silver Eagle sales have shown incremental declines in the summer months, with a rebound in demand starting in October.
What will be the long term level of demand for America the Beautiful Silver Bullion Coins? The number of coins struck for 2010 was certainly too low at 165,000 coins (825,000 ounces). This year production across all five designs will be 633,500 coins (3,167,500 ounces) if the US Mint continues to make the same quantity available. This would be a little less than one-tenth the number of Silver Eagle bullion coins sold last year.
Update: The US Mint has scheduled the release of the next two numismatic versions of the America the Beautiful Five Ounce Silver Coins. Grand Canyon National Park will be released on June 29, 2011 and Mount Hood National Forest will be released on July 28, 2011.
Another update: The US Mint just posted a video on ATB Silver Bullion Coin production on YouTube. I will embed below or check it out here.