Originally posted at Sprott Money March 9, 2016

The US Mint recorded their best ever sales for their American Silver Eagles. These coins are a staple in the world silver market for those looking to protect their wealth in precious metals.

The stunning performance throughout the month of February saw the mint sell a record-breaking 4,782,000 coins. This marks the 11 th-highest month of sales for this coin since its inception in 1986.

What is most stunning about this performance is the fact that it comes at a time when the mint is rationing sales of these rounds, and limiting their supply to wholesalers.

What this means is evident: these numbers would have been even higher if the free market allowed them to be. Perhaps we could have even broken all records and experienced the coin's top-performing month of all time. It is an incredibly likely possibility.

It has been reported that the mint's distributors have been buying hand over fist, purchasing every last round that has been made available to them. This showcases the incredible demand that exists in the physical silver market, and downplays the farce that is the paper silver markets.

In fact, demand was so intense that in the last month of February, when the mint announced they would be releasing 1 million rounds for the week, distributors bought 73.7% of the whole week's supply by the end of the first day.

For once, the paper silver market also followed suit with physical demand, seeing a strong rise in the price of silver throughout the month of February, even though it faced continuous setbacks.

Last month's sales were only beaten by ten previous months, including January 2016. This means that silver demand has started out at incredible heights, and if it continues, we could see a record-breaking year - even at a time when supply is being artificially depressed.

The physical market is what needs to be looked at. It is the true market and it is telling us that it will not be ignored. Demand will continue until the supply restraints force paper prices to greater and greater heights, alleviating the pressure that low prices are currently having on the physical markets. Has an even higher rise already begun? We'll find out soon enough.

The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.