For all bullion coins, the US Mint charges a premium over the prevailing spot price when selling newly minted coins to Authorized Purchasers. The premium covers the cost of manufacturing and distribution of the coins.
It’s been reported that the the US Mint notified distributors recently of the increase in the premium, from $2.95 to $3.05 per coin over the prevailing spot price, or roughly 3.8%. Retail investors should expect the increase in premiums to trickle down quickly from the wholesale level to bullion dealers.
US Mint just raised prices on Silver American Eagles to distributors. Now at $3.05 per coin over spot.
— bob coleman (@profitsplusid) July 26, 2024
How the premium of American Eagle Silver Coins breaks down
With the silver price today at $27.93 per ounce, the overall wholesale premium of 9.15% premium added by the Mint at the wholesale level, making the wholesale cost to Authorized Purchasers $30.98 per coin.
Currently, the lowest dealer price is $32.58 per coin, which is a 16.65% premium over the spot silver price today.
At the retail level, the premium is $1.60 over spot, or roughly 6% over the wholesale cost. This markup that is shared between the wholesaler and retail bullion dealers.
We track prices from more than a dozen dealers for current year Silver Eagles, the highest currently has a premium of $8.70 per ounce over spot, a 31% premium.
The two largest APs that serve the retail precious metals market are APMEX and A-Mark. Each will have their own markup to downstream distributors and retailers. Coincidentally, A-Mark direct-to-consumer’s top brand, JM Bullion, along with APMEX, currently have some of the highest dealer premiums online.
Manufacturing American Eagle Silver Coins
The U.S. Mint acquires raw silver that meets the purity and sourcing standards that are prescribed into law. For the 1 oz American Eagle Silver Coin, the purity standard is .999, or 99.9% pure.
The U.S. Mint does not own the refineries that process the ore. Instead, it works with approved suppliers and refineries that meet specific standards.
These suppliers, including the Sunshine Mint, of which A-Mark owns a minority stake, provide the Mint with silver blanks, also known as planchets, which are the round metal discs that are then struck into coins.
The silver blanks are produced by rolling the refined silver into sheets and then punching out discs of the appropriate size and weight. The prepared planchets are then sent to the Mint’s facilities, where they are struck into coins.
This video from the US Mint on YouTube demonstrates the manufacturing process.
After striking, the coins are inspected for quality. Those that meet the standards are counted and packaged for distribution.
Newly minted investment grade American Silver Eagle Bullion coins are available only through retail precious metals and are sold in various packaging options, including tubes, monster boxes, and individual holders.
