Is ‘Deadman’s Curve’ playing for silver?

Silver American Eagle purchasers seem to be losing interest in the popular bullion coin again.

Sales numbers are inexplicably declining.

With just two days to go in October, sales have dropped by 54 percent from September.

This decline is significant.

Unless there is a late purchase of 1,567,500 pieces in less than 48 hours, the decline is baked into the cake.

So far, the Mint reports sales of 1,330,000 for the month compared to 2,897,500 in September.

Such a large monthly sales decline qualifies as market sentiment turning on a dime.

What caused it?

While you are thinking about it, I can point out that this is the third sudden shift of sentiment in 2018.

It happened in February.

Sales slid 71 percent in the second month of the year.

This took monthly numbers from 3,235,000 to 942,500.

Some drop happens every year because January is the kickoff month where every collector wants the new date and every dealer wants the new inventory.

But a 71 percent drop is steep.

Weak demand then turned on a dime in late summer.

It became strong demand.

The Mint ran out of coins.

It instituted its allocation rationing program in September.

If you compare the September sales number of 2,897,500 to January’s 3,235,000, you can see just how strong the surge was.

It can be fairly said that sales in July doubled from 435,000 in June to 885,000.

Then sales nearly doubled again in August to 1,530,000.

And then nearly doubled again in September.

No wonder Mint planners are driven crazy.

Three consecutive doublings?

And now a drop by half.

This is like a teenage driver’s first attempt to control a car, alternately hitting the accelerator and then the brakes too hard.

What does it mean?

Obviously there is no market conviction.

We might read stories online about stocking up at ridiculously low prices, but the follow-through is shallow.

Today’s silver price of $14.42 an ounce is near the year’s low.

Have would-be buyers begun to fear the precious metal dropping below $14 before it turns higher?

With 2018 total sales now standing at 13,456,000 silver Eagles, what seems absolutely certain is that when we are singing “Auld Lang Syne,” this year’s final number will be lower than 2017’s 18,065,500.

That is, unless that teenage driver floors it again.

Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017. He is editor of the weekly newspaper “Numismatic News.”

 

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