The U.S. Mint ran out of American Eagle silver bullion coins within the first two weeks of 2013 and therefore, temporarily suspended sales of it reported Bloomberg and many other newspapers. The U.S. Mint sold more than six million ounces just in the first two weeks of this year compared to just 1.6 million ounces in December 2012. Demand is at a five year high and the recent demand primarily came from exchange-traded funds. More than $20 billion worldwide are invested in silver. Buying precious metals including silver is a proven hedge against inflation. Many central banks from the U.S. to China are declaring more stimulus to promote growth and that creates more demand for precious metals.
It is customary for collectors to buy coins but this time it is investors who are snatching precious metals. The continued economic uncertainty and inflation fears are fueling the demand. Silver particularly not only a safe haven for inflation but also an industrial commodity. However, when the Congress start to discuss the debt ceiling, sequestrations and the U.S. budget in coming months, chances are that the demand for precious metals may stay high for some time to come.