January 11, 2016 / 5:46 PM / 2 years ago

U.S. Mint quadruples American Eagle silver coin allocation

NEW YORK, Jan 11 (Reuters) - The U.S. Mint said on Monday it set the first weekly allocation of 2016 for American Eagle silver coin sales at 4 million ounces, roughly four times the amount rationed in the last five months of 2015, after a surge in demand.

The mint ran out of American Eagle silver coins in July due to a “significant” increase in demand as spot silver prices fell to a six-year low.

The bullion coins are bought by authorized dealers who then sell to the general public at a premium, which changes according to supply and demand. The coins are viewed as a more affordable form of investment in physical bullion than the much larger bars.

Inventory was replenished in August and sales resumed. But the coins were on weekly allocations of roughly 1 million ounces for the remainder of the year due to low supplies.

The U.S. Mint was not alone in limiting sales. The unexpected surge in demand put the global silver-coin market in an unprecedented supply squeeze, forcing other mints around the world to ration sales, while U.S. buyers had to look abroad for supplies.

Spot silver was trading around $14 per ounce on Monday, hovering above the 6-1/2-year low of $13.60 hit in December. (Reporting by Marcy Nicholson; Editing by Dan Grebler)

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