American Silver Eagle

The American Silver Eagle is wildly popular. As the official coin of the United States, collectors and investors alike have long been buying the Silver Eagle in massive quantities. Everyone, even those who aren’t interested in silver bullion, knows about the American Silver Eagle. It is arguably the most recognizable coin in the world, along with its gold counterpart.

The American Silver Eagles are a symbol of America, but they are also quite the choice for an investment or collection. Each year the United States produces the Silver Eagle for distribution around the world. You can purchase this year’s edition or Silver Eagles from years past online, and they aren’t costly either. This is one of the main attractions to the American Silver Eagle, the relatively low cost. Depending on the price of silver on any particular day, you should find the American Silver Eagle at just a few dollars over the price for an ounce of silver. This makes the coin very affordable, a great choice for collectors, and very easy to store.

History of the American Silver Eagle

The American Silver Eagle bullion program came into effect due to the desire in the late 1970s and early 1980s to sell off some of the silver from the Defense National Stockpile. Legislators wanted to sell off silver to help balance the United State’s budget, but were concerned about what would happen to the price of silver if the USA flooded the market with over 100 million additional ounces. However, budget pressures lead the USA to pass a bill in July 1981 allowing the sale of 75% of the Defense National Stockpile’s silver, totaling 105.1 million troy ounces. The price of silver quickly fell 11%, even before the silver sales commenced.

Production and Distribution

As mentioned before, the American Silver Eagle is the official silver coin of the United States of America. American Silver Eagles have been produced at only three US mints ever: the San Francisco Mint from 1986 to 1998, the Philadelphia Mint and the West Point Mint from 1999 to 2000, and exclusively at the West Point Mint from 2001 to today. The San Francisco Mint has recently (March 2011) conducted trial strikes of American Silver Eagles in preparation for resuming production at a later date.

Few if any end consumers buy American Silver Eagles directly from the US Mints, as the minimum purchase is 25,000 coins at $2 over the current spot price of silver. Due to the 25,000 coin minimum, there are only 11 companies in the world that are Authorized Dealers, meaning they can buy American Silver Eagles directly from the US mint and resell to retail sites and end consumers. The 11 Authorized Dealers of American Silver Eagles are:

  1. A-Mark Precious Metals in Los Angeles
  2. SCB/Mocatta Bullion in New York
  3. Jack Hunt Coin Brokers in New York
  4. Salomon Smith Barney in New York
  5. Prudential Securities, Inc. (New York)
  6. The Gold Center (Illinois)
  7. HSBC Bank in New York
  8. Commerzbank International (Luxembourg)
  9. Deutsche Bank A.G. (Germany)
  10. Union Bank of Switzerland (Zurich)
  11. Hang Seng Bank (Hong Kong)

These 11 companies purchase American Silver Eagles directly from the US Mint at $2 over spot, then resell to distribution and retail companies at more than $2 over spot to lock in their profit. This extra step between the mint and the end consumer is one of the additional reasons why American Silver Eagles usually sell at slightly more over spot than other silver bars or rounds.

Purity, Weight, and Value of the American Silver Eagle

American Silver Eagles are 99.9% pure silver, meaning that virtually every spec of the coin is made of absolute silver. This isn’t a coin where you will get half silver, half copper, and a silver plating, the entire coin is made of solid silver. Technically the value of an American Silver Eagle is just $1.00 USD, but needless to say they sell for much more than this. As many of the coins weigh an ounce, the price of an American Silver Eagle is almost always on par with the spot price of silver. There is a slight premium as previously mentioned, but it is just a few dollars. In addition to American Silver Eagles that weigh one ounce, there are also versions of the coin that weigh 1/10 oz., 1/4 oz., and 1/2 oz.

Bullion, Uncirculated, and Proof American Silver Eagles

There are a handful of different American Silver Eagles, with each version having many different variations released over the years. The bullion form of the coin is the one that most investors are interested in, while the proof and uncirculated American Silver Eagles are of the most interest to collectors. The proof and uncirculated coins are delivered to dealers who re-sell them to collectors. Coming in protective cases and in perfect condition, these coins look their best in uncirculated or proof form. Expect to pay over the spot price for uncirculated or proof American Silver Eagles. If you are looking to invest in silver, purchasing the coins as bullion (not in pristine condition) is your best option.

Lack of American Silver Eagle Availability

In 2008 and into 2010, the American Silver Eagle has been the victim of some tough times. As a result of economic conditions and increased demand for the coin, production was unable to meet the needs of collectors and consumers. In 2009 there was no collectors American Silver Eagle coin released at all, putting an end to many years of production. The numbers for production of the American Silver Eagle are so limited that they were not even officially released in either 2009 or 2010. In addition, bullion versions of the American Silver Eagle were the only coins produced in 2010. The extreme shortage has resulted in an inevitable increase in demand. This, in turn, has found the coin at its peak of collectibility and general popularity amongst the public. As the shortage continues and less and less American Silver Eagles are produced, the prices are sure to rise.  There has been a lot of speculation that the coins would not be produced ever again after 2010, so the interest in these coins is at an all time high. They are a fantastic opportunity for collectors and investors alike.

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