New silver coin law in US

President George W. Bush has signed legislation that creates a new market for domestic silver in government-minted coins.

The silver, which will be bought by the U.S. Treasury on the open market, will be used to continue minting the popular American Silver Eagle Bullion coins, which have been drawing down the nation’s silver stockpile since 1986, consuming more than 100 million oz.

The mint is expected to buy up to 9 million oz. of silver annually to continue production.

It marks the first time in 40 years that the federal government has been a net buyer of silver. The law was prompted by the near depletion of the stockpile, which had been built up during the years following the Second World War and consumed largely by American Eagle coins since 1986.

Last year, coin sales posted their fourth-best sales year in the 17-year history of the program. Based on the average annual London fix of US$4.35 per oz., sales from the American Eagle silver coinage program grossed almost US$39 million in 2001. Overall, sales from the Eagle coin have generated more than US$500 million, based on the average annual London-fix silver price over the 17 years of the program.

“This is a win-win situation for the silver industry,” said Paul Bateman, executive director of The Silver Institute. “We are quite pleased that the U.S. government will shortly have to go to the open market to obtain its supply of silver for the American Eagle Silver coinage program,” Bateman added.

You can purchase American Eagles from most major coin and precious metals dealers, and the U.S. Mint, as well as brokerage houses and participating banks. For more information on Silver Eagles, contact the U.S. Mint at www.usmint.gov

The Silver Institute is a nonprofit international association. Established in 1971, the Institute serves as the industry’s voice in increasing public understanding of the value and many uses of silver.

— The preceding is from Silver News, a quarterly publication of the Washington, D.C.-based Silver Institute.