monster_box_of_500_2022_1_oz_silver_american_eagle_1_coin_bu_min_10

Why Are Silver American Eagles So Expensive?

The Silver American Eagle bullion coin was introduced by the U.S. Mint in 1986 and is still being minted today.  It is one of the most widely recognized worldwide by investors, collectors, and coin brokers. The Silver Eagle’s design is based on the design of the Walking Liberty Half Dollar by   Adolph A. Weinman.  The Walking Liberty was minted from  1916 to 1947.  The Eagle’s depiction is the full-length figure of Lady Liberty in a full strike, surrounded by folds of the American Flag, right hand extended out her left hand holding laurel and oak branches.

As a coin dealer, I am often asked “Why are the premiums so high on Silver American Eagles, compared to .999 fine silver rounds or bars?”

The first and most obvious answer is the demand for these world-famous coins is at an all-time high.  Why?  A lot of the demand can be attributed to the beginning of the disastrous pandemic that started in January 2020.  People, worldwide, were so uncertain of their financial future, that they started buying huge amounts of silver and gold bullion to hedge against a possible worldwide financial collapse. Two years later, the premiums of Silver American Eagles still remain high.   But, why aren’t private minted 1-ounce silver rounds as high?  The answer lies in the minting, distribution, and circulation of the different types of coins.  The Silver American Eagle is minted by the U.S. Mint and is not sold to the general public.  They are sold to a network of wholesale dealers and brokers, who then sell to the general public.  So, of course, these dealers have to make a profit to stay in business.  They usually buy huge quantities, reaching hundreds of thousands of dollars and even a million dollars or more.  On the other hand, private minted silver rounds, which also contain 1 ounce of .999 fine silver are produced by the private company and sold directly to the general public.  This allows the company to sell at a lower premium, basically cutting out a profit layer or the “middleman” theory.  There are many of these private minted companies, such as Engelhard, Johnson Matthey, Silvertowne, Sunshine Mint, and others.  So, collectively, they can produce mass quantities to help ease the demand pressure.  The U.S. Mint is the only producer of the Silver American Eagles so when the demand increases as it has lately, they have a hard time keeping up with production and distribution, thus causing premium increases.

Because of the higher premium, many bullion investors and collectors have switched to .999 fine silver rounds, Silver Maples, Krugerrands, Philharmonics, and Britannias due to premiums that are less than half of the Silver Eagles.  It is interesting, though, that people are still buying Silver American Eagles at an alarming rate.  

So, in conclusion, a lot of the premium pressure is attributed to demand caused by financial uncertainty and the availability of the product in the market.  If you are considering buying silver to either hedge inflation or you just want to collect silver bullion, your choices are varied.  You can buy 1 ounce Silver American Eagles, 1-ounce silver private minted rounds, silver bars, 90% silver coins minted before 1965, or buy .925 sterling silver products.  There are a lot of choices.  Therefore I advise you to do your diligent research before purchasing anything.  If you want to ask me any questions before you buy, I am always available at decaturjewelry2@comcast.net or by telephone at 217-875-6625.  Visit our website at www.decaturjewelry.com for any information you need.  

Leave a Reply

Your email address will not be published.