Silver Coins Still in High Demand Even With Drop in Metal Price

(Bloomberg) -- Americans can't get enough silver coins despite declining metal prices since the Reddit buying frenzy unraveled.

Premiums on American Eagle silver coins have risen to more than $7 on Thursday from about $5 this past weekend, according to Everett Millman at Gainesville Coins in Florida. His company's website has a notice saying all orders may face extended delays.

Dealers including Apmex were unable to process orders over the weekend because of unprecedented demand. Apmex's website currently tells customers to expect a three- to five-day delay in processing times due to increased volume of orders.

Normally when prices of the physical metal fall, premiums come down as well. That hasn't happened this time, when spot silver has slipped 2.4% since Friday after a retail buying frenzy fueled by posts on Reddit forums spread to silver stocks.

Read More: Silver Is the Latest Market Hit by Reddit Day-Trader Frenzy

It's “partly because there's suppliers who have really depleted their inventories of a lot of popular products like silver eagles and the U.S. Mint isn't going to have many more until probably the middle of the spring,” Millman said by phone.

The U.S. Mint said Tuesday it is still rationing its sales of silver coins because of “continued exceptional market demand,” as well as limited supplies and manufacturing capacity.

Gainesville Coins has a much higher volume of first-time orders and buyers than in the past, according to Millman.

“It's giving some people the first introduction to the silver market to even know that these coins exist,” he said, referring to the Reddit-driven buying mania that at one point drove silver prices to an eight-year high.

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