U.S. Mint 5oz Silver Bullion Coins Nearing the Market

Commodities / Gold and Silver 2010 Oct 14, 2010 - 08:43 AM GMT

The U.S. Mint should soon release a new five ounce silver bullion coin that it first suggested would be launched “later in 2010.” The coins will be .999 pure and utilize the same design as the mint's “America the Beautiful” quarters, which were first coined at the beginning of the second quarter 2010.

Dealers that carry American Silver Eagles directly from the Mint will also be offered these new bullion five ounce rounds. One interesting tidbit is that these coins will be massive at three inches in diameter.

Minting Millions

The U.S. Mint is clearly expecting strong demand for the new coins, with estimates suggesting that as many as 100,000 coins of each of the first five quarter designs will be released in 2010. At present market value, that comes out to roughly $115 million worth of fresh bullion for investors.

The bullion coins are a byproduct of House Resolution 6162, which outlines the characteristics the bullion pieces should have. Unfortunately, there is little information available about these coins except for HR 6162, and no one has yet received word on the premiums the U.S. Mint will charge its dealer network. The mint recently raised its premiums on the American Silver Eagle to $2 per ounce, but it would be foolish, though not unlike the government, to charge $10 in premiums on the new issues.

Silver investors have long seen the American Silver Eagle as a piece of artwork, something only an artist could design and create. Couple the artwork with the beauty of pure silver, and the combination is a match made in heaven.

While I've yet to study the new quarters that are supposedly being used as legal tender today, the fact I've not once seen one stand out gives me concerns that these pieces aren't particularly pieces of art. Nonetheless, as an excited silver investor, I'm sure they'll be beautiful, if only for their silver content.

One Government, Two Different Perspectives

The U.S. Mint clearly understands that investors are fearful, and they want precious metals as a way to reduce their exposure to the dollar and protect against inflation. The U.S. Treasury, however, has yet to come to that conclusion, as it seemingly borrows more and more money each week to finance stimulus packages and spending that only increase the desire for the new coins.

If the Treasury were to take some consideration from the Mint, it might realize that investors are running scared. The Mint has on several occasions run out of silver blanchets from which it can coin its bullion pieces, and it has raised premiums considerably without at all reducing the total demand for American Silver Eagles.

With any luck, competitive pricing from the U.S. Mint will help cool the exceptionally high premiums that physical silver investors have combated for many months. Since they will contain a hefty amount of silver, investors should expect demand mostly from other investors instead of collectors, due to the fact that one coin will set you back a full $115 in the silver content alone.

By Dr. Jeff Lewis

Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Comments

Meep Zorp
16 Oct 10, 14:17

Could this be related to the new 1099 program?

A thought crossed my mind was could it be possible that they are minting larger ounce coins so that in the future when they are bought or sold then a 1099 has to be generated per the hidden amendment in the health care bill? Who knows how high silver will go? $125 dollar silver isn't really out of the question in the next few years the way things are going. In my opinion smaller denominations of silver will become more revered to avoid the extra paper work involved. If I have small denominations then there would be no paper trail. I also wonder if at some point bullion may be cut and weighed just to get around the $600 rule. Maybe they will make that illegal at some point as well. Make any sense?

Wags
17 Oct 10, 05:04

Cut Bullion

Well, it is reasonably easy to cut into silver or gold bullion but the danger in doing so is that maybe no one will buy it. Bullion has identifying features across it and cutting it will produce smaller pieces without all ID markings. Dealers could well refuse the buy or offer a lower price, which brings back that same penalty of tax.

Shelby Moore
17 Oct 10, 07:50

buy shot

That is why I been buying silver and gold shot, or junk silver. You can get war nickels for less than the price of the silver in them, and already in a suitable format for currency in the coming chaos (border and checkpoint guards probably won't even realize they are silver, they are so ugly grey). Who cares if you can melt them for the silver, because China will implode and the increasingly use of silver will be predominantly monetary not industrial. When China implodes, the production of by-product silver from base metals mines will plummet and silver will go into a monetary squeeze like you never seen:

http://goldwetrust.up-with.com/precious-metals-f6/silver-as-an-investment-t33-255.htm#3777

Also shot is less difficult to do fraud, ditto small coins such as nickels and dimes, because can random sample a few grains to test for impurities, and that is a statistical assurance that the batch is pure.

Cheerio.

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