The United States Mint delayed pre-sales of its non-circulating silver coins amid a global silver shortage. In a statement on May 27, the bureau said that its supply of silver blanks is not able to keep up with the demand for its coins.
“The Mint is being impacted by silver blank shortages among its suppliers. The demand for many of our bullion and numismatic products is at record heights and increasingly outpacing the supply of silver blanks available through our suppliers,” the Mint said in a Facebook post.
Silver demand has been rising over the past several months after a decline last year during the height of the COVID-19 pandemic. Early last month, silver spot prices increased by 74 percent from a year ago, outperforming gold prices which rose only by 6.4 percent in a year, CNBC reported.
The Mint said that huge demand drove an “extraordinary” volume of traffic to its website during the pre-order window for the 2021 Carson City Morgan dollar and the 2021 New Orleans Morgan dollar. This caused the website to choke, and as a result, a lot of customers were not able to complete their transactions.
“Another government agency run poorly! I got through three times, got to the finalize order, and all three times, the system crashed!!!!! And I was ordering just one of each. I GUESS THE BIG BUYERS HAVE NO PROBLEM?” one person commented.
The Mint postponed the pre-order launch dates of June 1 and June 7 for the four remaining 2021 Morgan and Peace silver dollars to fix the glitch. The bureau said that it will announce revised pre-order launch dates as soon as possible. It added that not everyone will be able to purchase silver coins this season because the demand remains greater than the supply. (Related: U.S. Mint unable to keep up with “surging demand” for gold, silver.)
Industrial and investor demand for silver shows no signs of waning
A report from the nonprofit Silver Institute forecasts that silver demand for printed and flexible electronics will increase by five percent over the next 10 years. It estimates that the demand for the precious metal will increase from a predicted 48 million ounces (oz) this year to 74 million oz in 2030.
Silver is used in a wide range of everyday products, from electronics to jewelry and coins. Its high electrical conductivity and durability gives it numerous industrial and technological applications, with almost every mobile phone, computer, automobile and appliance containing silver.
The report, which was authored by the consultancy company Precious Metals Commodity Management, shows that silver will continue to play an essential role in these applications. In total, it forecasts that the printed and flexible electronics industry will consume 615 million oz of silver this entire decade.
Investor demand for silver will also stay high, due in part to inflation concerns. Precious metals such as gold are seen as hedges against rising prices of consumer goods and a decrease in the value of the dollar. And while silver is not as stable an inflation hedge as gold, the metal tends to track with the latter over time.
“If gold rallies then silver tends to rally, but even stronger,” Ole Hanson, head of commodity strategy at Denmark’s Saxo Bank, told CNBC. “So most silver investors are probably keeping a close eye on gold prices, the level of the dollar and the level of interest rates.”
Silver also stands to benefit from the reopening of the global economy, according to Max Layton, managing director of commodities research at Citi Global Markets. This is due to an increase in industrial production and maintained investment demand, he said.
“The pandemic resulted in a major decrease in U.S. real interest rates, and a shift in allocations out of wealth and household savings into gold and silver. This more than offset the weakness in industrial consumption, and continues to do so,” he said.
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