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Will 2017 Be A Semi-Key Date For Silver Eagles?

March 31st, 2017 by

American Silver Eagle sales for the first quarter of 2017 totaled a bit over 7.9 million coins, the slowest start since 2009. Considering that the first quarter is usually the most active time for Silver Eagle sales each year, current demand is pointing toward 2017 being the lowest mintage in at least six years. This poses the question: Will 2017 be a semi-key, or even key date for the American Silver Eagle?

Last year,  sales in the first quarter accounted for 39.37% of total sales. Taking that same percentage, and applying it to the 7,957,500 coins sold in Q1 17, gives an annual estimate of 20,212,000 coins – a level lower than even 2008, before the Lehman Brothers collapse.

Using official data from the last ten years of American Silver Eagle sales, we first calculated what percentage of annual sales occurred in the first quarter of each year(orange bar). We then applied the same percentage to 2017’s first quarter sales to arrive at a projection that assumed the same sales pattern (green line).

Example:

2016 Q1 Sales = 14,842,500
2016 Total Sales = 37,701,500
Q1 sales = 39.37% of total sales

2017 Q1 sales = 7,957,500
Est. total 2017 sales = 7,957,500 ÷ 39.37% = 20,212,000 coins.

2017ASEsales-using-past-percentages(click to enlarge)

What Do These Numbers Mean?

As seen in the chart above, using the last five years as a guide gives estimates for total 2017 Silver Eagle sales ranging from a low of 20.2 million to a high of 30.9 million coins. Even the top end of projections would amount to the lowest annual sales since 2009.

Expanding the time frame to the last ten years gives more data points, but earlier years may not capture mid-term macro trends. Therefore, 2007 and 2008, both before the Global Financial Crisis, are considered outliers.

2009 can be considered the beginning of the “modern era” of American Silver Eagles sales, reflecting the “new normal” in monetary policy and economics. Applying our formula to the date range of 2009 to 2016 gives a low forecast of 20.2 million coins sold in 2017 (using 2016 data) and a high forecast of 33.8 million coins (using 2009 data).

The average 2017 projection using these eight years of data is  27,124,500 coins (rounded to nearest 500). The median is not much different, at 26,054,500. Again, these are sales numbers far below recent years.

Why The Low Demand?

While past results are no guarantee of future performance, primary market sales (i.e. purchases from the US Mint) seem to still be depressed by a robust secondary market. Major distributors are purchasing large numbers of American Silver Eagles from investors, who are taking advantage of higher silver prices to pocket profits. This is giving wholesalers a healthy stock of “random date” coins, which reduces the need for 2017-dated coins.

Who Knows What The Future May Bring?

The US Mint has scaled back production on 2017 Silver Eagles due to weak demand. This leaves them vulnerable to a sudden spike in demand caused by geopolitical crisis such as a far-right victory in French Presidential elections, or North Korea actively threatening neighboring countries with nuclear weapons.

Barring any “Black Swan” event, though, 2017 is shaping up to be a year where collectors need to pay attention, in order to avoid higher prices for 2017-dated coins in future years.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.