Commemorative Gold Coin Sales Suspended

The United States has suspended sales of the 2011 commemorative gold coins. The action comes as the market price of gold briefly moved above $1,800 per ounce, before closing the week at $1,746.30.

The 2011 Army $5 Gold Coins went on sale January 31, 2011 and the 2011 Medal of Honor $5 Gold Coins went on sale February 25, 2011. The prices for the products were published on January 4, 2011 in the Federal Register, which included an introductory price, effective for about the first month of sales, and a regular price, to be effective following the introductory period.

The regular prices $444.95 for each uncirculated coin and $454.95 for each proof coin. The introductory prices were $5 lower. The $5 commemorative gold coins have the same specifications as the classic gold half eagle. The composition if 90% gold and 10% copper with a weight of 8.359 grams, yielding 0.24187 troy ounces of pure gold.

From the date prices were first published until now, the market price of gold has risen by more than $350 per ounce, or more than 25%. As opposed to the US Mint’s other numismatic gold product offerings, a mechanism was not in place to adjust prices incrementally as the market price of gold increased. Because of this situation, I had suggested the possibility of a suspension due to the increasing price of gold. As the coins were still available around mid-week, the US Mint was actually netting less than the market price of gold for uncirculated versions of the coin, taking into account the $35 surcharge included in prices that will be distributed to the beneficiary organizations.

Following the suspension, the US Mint provided this statement:

The United States Mint has suspended sales of commemorative gold coins for re-pricing.  Due to the current market volatility, we will be placing these coins on a “pricing grid” similar to the structure we use to price America Eagle, American Buffalo and First Spouse gold coins.  A new grid specific to these coins is being developed and will be posted when complete.

Based on my understanding of the situation, in order for the new pricing grid structure to become effective, it must be published in the Federal Register. In the past, this process has sometimes taken several weeks.

The weekly numismatic product sales report, which should be available on Tuesday will certainly be an interesting one to study. Early in the week, most numismatic gold products were available at prices that were nearly the same as their bullion equivalents. For most of the week, the gold commemorative coins were available at an unprecedented bargain price compared to the intrinsic value. How many collectors took this as an opportunity and bought more coins ahead of the suspensions/price increases? Did any would-be bullion buyers opt for numismatic coins, perhaps driving sizable increases in sales?

$1 Coin Stockpile and Legislation

In the last post, I mentioned that I would have some commentary of the six bills recently introduced in Congress to deal with the $1 coin hoard. On Coin Update, I just posted a summary of the various requirements of each of three latest bills. In Friday’s Washington Post, I had an opinion article published- “Stop legislating this buck and kill the dollar bill”. You can read the article online here.

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Comments

  1. SunTzu says

    I bought these on their first day of issue not just because I like the designs and support the cause, but also because of secondary market appeal. I’m an UNC collector. Modern proof gold is too frosted for me to enjoy the coin. I made a calculated decision that given the glut of gold offerings and their price, people wouldn’t have enough money to buy everything and these would fly under the radar. Now I’m afraid these will end up like most every other modern gold commemorative in terms of value on the secondary market. I still have a set in unopened boxes. It pains me to say this, but people might pay an even higher premium for that stupid “First Strike” label on this coin because so many of them will have been sold after the 30 day window. I’m not comparing them to the 2008 W Buffaloes, but do you see what people are paying for that SAME coin but with a “First Strike” label?! It’s insane. I can’t wait to see Tuesday’s numbers and the massive increase in the numbers sold in both the proof and UNC.

  2. bob says

    oh please… i am sick of the whole “get rid of dollar bills” garbage. if you want to carry around a bunch of heavy stupid looking dollar coins, then go ahead and start doing it – don’t try to drag the rest of us down with you. i bet you dont currently use dollar coins much at all!

    the conveniance of dollar billsm especially compared to dollar coins, is worth far more than $5.5 billion over 30 years – literally.

  3. Art says

    Look at it like this. If there were no quarter coins but only paper quarter dollars starting 40 years ago, would that have been okay? Of course not. Coins are needed for economic high usage because they last much longer and are therefore much cheaper, and today’s dollars have become like yesterdays quarters value-wise. The Fed really needs to stop printing the dollar bills because that’s the way to get Americans cured of their addiction.

  4. Curt says

    I would use a $5, $10 and $20 coin. Carrying a roll of $1 coins to buy coffee, a bagel and newspaper just isn’t practical. Problem is you can’t buy anything for a dollar anymore.

  5. Art says

    Here’s a solution: The mint needs to produce a $2 coin as well as a $1 coin. That would help stop people from griping about “too many coins” when they receive change.

  6. jimmy says

    the new prices for $5.00 commemorative gold coin might be $564.95 for proof and 554.95 for unc.. based on $1,747.30 per ounce of gold.

  7. Hidalgo Cohen says

    Here is a solution to eliminating the $1 coins….

    Just like the Kennedy half dollar, the Government should mint a limited number of Presidential and Native American coins to meet collectors’ demands. These coins can appear in proof sets, mint sets, bags of coins, wrapped rolls, etc. The Government should make a profit on these coins, as it can charge a premium when it sells the coins to the public.

    Such an approach would eliminate the waste resulting from unused coins that are being stored in warehouses (which also cost $$$s), while allowing collectors to add to their collections.

    What do you say?

  8. Piotr says

    Cents should disappear, and there should be $1, $2, and $5 coins. I would like to see some nice designs on these coins, brass middle and nickel outside. But I might be asking too much. Small European countries had similar coins for over 10 years now, and I’m not talking about Euro. Cents are now a leftover of inflation.

  9. jimmy says

    simple solution yet government is not listening. stop printing dollar bill. reduce the size of dollar coin to less than a quarter. demonitized dollar bill.

  10. Hidalgo Cohen says

    MIchael, I enjoyed reading your Washington Post article. And the posters here have some valid comments.

    But really, to everyone writing on this blog. What we need to do is write Congress. We can say all we want, but until we share are views with those who can propose and pass bills/laws, our voice will remain silent.

  11. Ben says

    I’ve travelled in Asia, Canada, and Europe and used one, two and five dollar (or equivalent) coins extensively. Bills just don’t make sense. However, someone finally made an intellengent argument for keeping bills. “How do you tip a stripper then?” Good point!

  12. Art says

    Find out how they tip strippers every where else in the world where no other country is foolish enough to keep printing small denomination paper bills and wasting enormous amounts of taxpayer money to do so.

  13. jimmy says

    now you have to use ten dollars bill to tip the strippers. here twenty pieces of ten dollars bill for you girls.

  14. Francisco J.Z. says

    Don’t ruin the board with “strippers”; nobody needs them here or how to tip ’em; we are here to discuss PM’s and numismatic issues only. Thank you.
    unless, that is , there are “stripper” coins which I doubt it will EVER happen (there’s better issues/people to keep the printing press churning)

  15. fedflation says

    Before long single dollar bills won’t be enough to tip anyone any more anyway thanks to the feds continued policy of artificially low 0% interest rates which is the feds way of continuing to monetize government debt by increasing the money supply which only continues to decrease the value of the U.S. dollar – hence fedflation. Before long we will have QE3, QE4 and more which is supposed to stimulate the growth of our economy but all this really does is stimulate inflation with cheap money and increase U.S. debt and will only lead to the complete destruction of our economy as long as the fed is allowed to have it’s way.

    What this country really needs is much higher interest rates like Paulson did 30 some years ago to encourage savings and investment in this country so people will start to put their investment capital to work by PRODUCING GOODS IN THIS COUNTRY AGAIN LIKE WE USED TO WHICH WOULD ALSO PROVIDE REAL SUSTAINABLE JOBS. But Bernanke doesn’t have the guts to do the right thing because he knows doing the right thing now would make him the most hated man in America like Paulson was some 30 years ago . But by continuing to do the wrong things now this will only make him a despised man in the future when more and more people realise just how truly destructive his policies have been to our country. But he just thinks like a politician and is more concerned with his own current prestige and popularity than with the longer term consequences of his actions.

  16. fedflation says

    My mistake I meant to say previous Fed chairman Paul Volker not Paulson. And I’ll stop ranting so the conversation can go back to coins. Although there is a definite correlation between Fed policy and pm coin values and obviously the value of the dollar.

  17. Ikaika says

    It will be interesting to see what happens to the demand for the Commemorative gold coins. After the mint suspended sales, gold prices started to drop. I had purchased, but decided to cancel.

  18. fedflation says

    At least if gold prices stay below $1750 this week we shouldn’t have another mint price increase on the other gold coins this week but with the markets so volitile lately who knows what prices will be in the short term. We could even have a price decrease sometime soon if gold goes back below $1700 again which would probably be a good time for me to buy a 2011 proof gold buffalo. But my lluck I’ll wait too long to buy and they will sell out. I only had enough money for one gold coin last month before prices went up and I bought a 2011 unc AGE. Plus with all the other pm coin purchases this year like the ATB 5oz coins (and other pm investments) this investment hobby is getting expensive but I know in the long term (and even not so long term) it is cash well spent and as in years past I’ll continue to be glad I did.

  19. auxmike says

    Gold is due for a MAJOR correction. It’s currently way over priced. Once the GOP cleans house in 2012, prices will go down. Hang in there!

  20. fedflation says

    I don’t think politics or politicians are going to solve the debt problems or the dollar/bond crisis that’s coming. It would just be political suicide for just about any high level politician to advocate the fiscal policies truly necessary to help restore our economy. That’s another reason why the Fed needs to raise interest rates. Higher interest rates would help to force politicians to stop spending money but the Fed itself is just too political as well. The economy in this country has to be completely restructured from a mostly service based consumption borrow and spend economy to a savings and invest production/ manufacturing economy. Then we could stop depending on countries like China for their money and their goods. But politicians including the Fed only get in the way with all their policies and regulations and inhibit the restructuring and real economic growth our economy needs.

    Our economy will likely get much worse before it ever gets better which is bullish for gold and other pm’s in the long term. If there is a significant correction in gold I would consider it a gift from heaven and buy as much as I can because that might be the lowest it will ever be again. As I heard someone else wisely state recently “there is no ceiling to the price of gold because there is no floor to the U.S. dollar”. But everyone should do their own research and make their own decisions.

  21. MQracing says

    Good article Michael. One of the things I picked up on— that there are six different bills and six different approaches that the individual Congressional sponsers are advocating. I wonder if any of the authors\sponsors of those bills consulted with the Mint personnel for their input.

    I think this partly demonstrates that often our Congress people dictate policy to the agencies— i.e., they micro-manage the agencies that they have purview over. Another example of this might be the Post Office— who is stuck by law in making home deliveries of mail six days a week— all the while bleeding money and piling up huge losses. But so far Congress has said no to any reductions in service levels. So often we blame the agencies without realizing that they have their hands tied behind their backs by congress.

    Going to dollar coins would save billions of dollars in manufacturing costs— if we are serious about deficit reduction this ought to be a no brainer.

  22. MiserTips.com says

    I hate to hear people say the $1 coins are too heavy. These people are not collectors for sure. If they were they would appreciate the wt. of silver found in our old Silver Dollars, $30 worth as of this post. I’m not saying that the copper / manganese dollars will be worth $30+ dollar in metal in the future but they sure will outlast the paper that we currently use saving the country billions over time.

    Which brings me to this, Half Dimes or Nickels? Both used at the same time until one was eliminated, sorry George it’s time to go (at least your still on the quarter & 5 oz ATB).

    Last, I hate to say it but the cent is dead too. A San Francisco TV station recently put pennies on the side walk and waited to see who would pick them up. It took a pile of 50 before an out-of-work man stopped to grab them. I see them on the ground all the time and I past them by too leaving them for somebody else that needs “a day of good luck”!

  23. CaptainOverkill says

    Great article Michael, I’m glad to your views getting out there in a medium like the Washington Post!

    On the argument that the present $1 coins are “too heavy,” I find that ridiculous. They are almost the same size and weight as quarters, and I have never heard anyone complain that quarters are “too heavy” or that “I have to carry too many quarters around.” I find most of these arguments to be specious and agree the bottom line is for the $1 coin to succeed, the continuing circulation of the $1 bill, plus the refusal of businesses to and circulate use $1 coins, must end.

  24. mjinden says

    I began writing letters to my local representatives several weeks ago when the first bill to eliminate dollar coins was introduced. Everyone else should do the same.
    to: bob
    August 13, 2011 at 3:39 pm
    Sometimes change (no pun) is difficult to handle but you should be more readily accepting of this. I was living in Britain when they demonetized the 1pound note (30 years ago) in favor of a coin.It wasn’t a big deal. If you always carry $20-$25 of 1 dollar bills in your wallet I can understand the inconvenience, but five or six dollar coins in the pocket when compared to a cost savings by not producing a paper bill- just makes more sense.

  25. Phil says

    Here’s my proposal regarding our coinage and bills:
    1) Get rid of the $1 bill and go back to the original Sacegawea design with the flying eagle on the back. That is a very pretty coin. The presidential dollars are just plain ugly.
    2) Get rid of the half dollar – no one uses them anymore as they are big and most vending machines don’t take them.
    3) Stop making the penny and round to the nearest nickel. Pennies can still be used but no longer required for purchases.
    4) Redesign the dime
    5) Come out with a 2 dollar coin similar to the Canadian design.
    Why would anyone carry more than a few dollar bills in their wallet? Several dollar coins don’t take up much space and I sure don’t mind carrying a few around. I hate having a wallet stuffed with dollar bills. With 2 dollar coins, you wouldn’t even have to carry around as many 1 dollar coins. They could even come out with 5 and 10 dollar coins, which could be used along with 5 and 10 dollar bills.

  26. MQracing says

    Several other countries use “plastic” bills instead of paper based bills. I wonder if this has been studied or looked at here in the US as a potential alternative?

  27. CaptainOverkill says

    Agree with most of Phil’s comments, though I’d add that half-dollars at this point aren’t minted except in rolls for collectors (and thus produce profits for the Mint). I don’t really mind their continued production as collectible products. We could use a redesign though – in three years, we’ll be at the 50th anniversary of the Kennedy half-dollar and ought to give some consideration to overhauling it at that point.

  28. MQracing says

    Re: getting rid of pennies and rounding to the nearest nickel. In practice anything over two cents is going to round to the nickel. And in states with a sales tax this is incrementally going to cost the consumer even more mullah to make purchases. I guess it would be good for state’s revenues— adding those extra three pennies (to the purchase price) multiplied by many, many millions of transactions at say a seven or eight percent tax base is going to fatten the state’s coffers. This makes me think twice about getting rid of the penny.

  29. Tim says

    I carry around 4 or 5 Kennedy halves all the time, the weight issue is no big deal. I am all for the dollar coins and ending the paper. However the gov will do the opposite, stop the coins. Then in a few more years after the Mint has sold off or got rid of the dies, presses, ET. to make them, then we will go back to them. Zero common sense.

  30. auxmike says

    I hate golden dollars. They turn real ugly brown very quickly. Bad finish design. I see these at the train station ticket vending machines only, they are given as change. They look so dingy I hate touching them! The metal content needs to be changed so as to present an attractive product the public will want to touch, collect and of course spend!

  31. Yakpoo says

    A very well written editorial! However, I would go further; we need to look at the entire issue of US coinage.

    Poor Quality: Estimated cost savings of the dollar coin is based on a 30 year circulation. The current dollar coins are poor quality and corrode quickly.

    Cumbersome: These coins are much too big. That’s why half dollars don’t circulate…not because there’s a dollar bill.

    Valueless: Our coinage is valueless. Today’s quarter has the purchasing power of the 1964 cent (remember nickel candy bars?). We need to retire (withdraw legal tender status for) the penny, nickel, and dime. The size and content of our coinage should be reworked to include: 25¢, $1, $5, $20.

    Health: Paper currency is made of 25% linen and 75% cotton; they’re essentially disease transmitting handkerchiefs. The 25¢, $1, and $5 coins should be copper based. The $5 and $20 coins should contain some amount of silver. Both copper and silver are natural antiviral bactericides.

    Objections: The greatest objection I hear is that everything will be rounded up and the consumer will lose out. Many countries have retired coinage over the years and find this isn’t the case. Norway recently withdrew legal tender status for the 50 ore coin (about 9¢ US). Product portions, rounding and truncation is all sorted out by the marketplace.

  32. Piotr says

    I agree with the comment above. Getting rid of low denomination coins is a step ahead. In my opinion it will save money. Right now penny and nickel cost more to mint and distribute than what they’re worth.

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