While sales for American Silver Eagle bullion coins have been potentially setting up for another record year, sales for the America the Beautiful 5 oz Silver bullion coin series have remained enticingly low. In recent years, the lower mintages for the ATB series have created premiums for some of the coins well above their intrinsic values.
The American Silver Eagle was introduced in 1986 and remains the only one ounce silver bullion coin produced by the United States Mint. The series enjoys broad recognition around the world and continues to remain a preferred method of physical silver investment for many investors. The series also has a broad collector base who pursue the bullion issues by date, with premiums paid for the lower mintage years or top graded certified examples.
The mintage low for the Silver Eagle series occurs for the 1996-dated issue at 3,603,386 pieces. There are four other issues with mintages below the 5 million level. Since 2008, annual mintages have risen sharply to 20 million or more pieces per year. Last year a new annual sales record was established at 42,675,000 coins despite availability being hampered by rationing for the entire year. The US Mint has finally lifted their rationing program this week, potentially setting the stage for an even higher sales total this year.
The America the Beautiful 5 oz Silver Bullion Coin series was launched in 2010 and represents the only bullion offering from the United States Mint which has a precious metal weight greater than one ounce. The series stands apart from the 5 oz silver coins offered by other world mints due to the wider than typical diameter of 3 inches and the lower than typical denomination of only 25 cents.
The ATB series features five different designs per year, which splits already low annual sales into even lower mintage figures for each individual issue. The current mintage low for a bullion coin is held by the Hawaii Volcanoes and Denali National Park issues at just 20,000 pieces each. In this recent post, I listed the mintage levels for each issue of the series from 2010 to 2013. For 2014 to date, the Great Smoky Mountains design has reached sales of 27,500 pieces, and the Shenandoah National Park design has reached sales of 19,600 pieces. The next design featuring Arches National Park will go on sale to authorized purchasers on Monday June 9, 2014.
Putting Silver Eagle and ATB Silver bullion sales side by side highlights the extreme disparity between the two programs. The graph below indicates the annual sales figures for each program since 2010. The ATB sales (in red) barely register against the massive sales of the Silver Eagles. Keep in mind that the annual ATB sales are split between five different designs.
With mintages in the tens of millions, none of the 2010 to 2014 Silver Eagle bullion coins commands much of a premium above the value of the precious metal content. Since the price of silver was higher in prior years, this would put the value of some bullion purchases under water at the current depressed price of silver.
In contrast, multiple issues from the America the Beautiful 5 oz Silver bullion coin series command premiums above the precious metal content. In several cases, this additional premium outweighs any decline in value related to the precious metal content. Each of the 2010 issues commands a premium, which may be driven by the fragmented distribution for that year, in addition to the mintage levels. All of the 2012 issues commands a premium due to the lower mintages, with significant premiums attached to the Hawaii and Denali issues. Even from last year, the Mount Rushmore design is showing a noticeable premium.
Over the past few years, I have shifted my personal silver bullion purchases from the traditional American Silver Eagles to the ATB series coins as well as some selected lower mintage world silver bullion coins. The additional premiums now attached to some of these coins has outweighed any declines in the intrinsic value of the metal. The strategy will continue to make sense as long as Silver Eagle sales remain high and the ATB series remains under the radar for large scale bullion buyers.