Silver Coins in Demand | Video

Brenton Burkett | 2/9/2013

Over the last few years, silver has become one of the hottest commodities on the investment market. Demand for silver coins is so high, the U.S. Mint is having trouble keeping up.

The coin drawing the most interest is the 2013 American Silver Eagle. It`s made of 99.9% pure silver, and it`s drawing plenty of customers to coin shops here in North Dakota.

At the Bismarck Gold & Silver Exchange, owner Larry Schneider has a few hundred Silver Eagle coins. But he feels lucky to have any. Last month, the Mint suspended minting these coins due to lack of inventory for the first time since November, 2009. While suspensions aren`t uncommon, they`re usually for other reasons, such as repricing. The Silver Eagles were on hold for a week and a half, which surprised salesmen like Schneider.

"With the high level of purchases, we thought they would have an adequate inventory to cover these sales," Schneider said.

But they weren`t expecting the numbers they saw. The Mint sold 7.4 million Silver Eagles in January, including nearly four million on January 7, the day they were introduced. Sales shattered the record set in January 2012, when the Mint sold 6.1 million coins.

Schneider says North Dakotans want to put their money in what they see as "stable assets." For that reason, the state is not only following the national trend, but has become one of the country`s strongest markets.

"North Dakota people are buying silver at record levels the last two years," Schneider said.

"If nothing else, silver is a hedge for protection of your assets," said customer Wayne Papke. An avid collector, Papke buys silver as gifts for others and for his own portfolio. He`s one of a growing number of people investing in this precious metal.

A major reason is prices, which have jumped in the last ten years. In January 2003, an ounce of silver cost less than five dollars. By 2008, it was 15 dollars. This year, it reached 32 dollars per ounce, up more than 600% from a decade earlier.

With prices still rising, more North Dakotans are investing in silver eagle coins -- as many as 500, the maximum amount the Mint will ship at once.

But will the rush for silver last? After last January`s record coin sales, they fell sharply the next month and stayed down the rest of the year. Some experts predict a similar drop this time around. But with concerns over the dollar and the national debt, Schneider says his customers will keep coming.

"It`s a buyer`s market yet, based on the potential for these metals in the future," Schneider said. "So I think there`s a buy level now where people can feel comfortable with buying metals."

Papke agrees, and says the future is looking up.

"I believe they`re going to do it for the value of silver," Papke said. "The collector`s market has its own set of criteria."

The numbers for the rest of 2013 remain to be seen. But if January is a sign, investors will keep pouring money into metals -- if the Mint can keep up.

Silver is currently worth about $31 per ounce. Schneider estimates it could reach $40 by the end of the year.

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