Is the Silver Bullion Shortage Ending?
Source: Seeking Alpha, Michael Zielinski (5/5/09)
"There are finally some signs that the shortage may be coming to an end. . ."
The Silver Eagle shortage first began in February 2008. The U.S. Mint became so overwhelmed with orders for the popular silver bullion coin that they were forced to suspend taking new orders. The suspension was only in place until March 2009; however, sales were resumed on a rationed basis. Authorized purchasers were limited in the number of coins that they could order. Early suggestions indicated that the rationed amounts covered only a fraction of the overall demand.
More than one year later, there are some indications that the situation may finally be abating. As I mentioned in my post on the U.S. Mint's March 2009 Bullion Sales, sales of silver and gold reached extremely high levels. Sales of silver coins were actually the highest monthly total since 1986. Because these are rationed sales, the high level was more of an indication of reduced supply constraints than increased demand.
Recently, there have been more indications at the dealer level that the shortage may be ending. At the height of the shortage premiums were as high as $4.50 over the spot price of silver. Premiums have now pulled back to around $3.00 over spot.