Last week the US Mint released the latest coin in the First Spouse Gold Series honoring Louisa Adams. The release unfortunately coincided with a pull back in the price of gold, once again making the coins seem drastically over-priced.
The coins are priced at $619.95 and $599.95 for the proof and uncirculated versions, respectively. This equates to a premium above the value of the gold content of $178 for the Proof version and $158 for the Unc version. In percentage terms the premiums are 40.2% and 35.7%. Based on early reports and sales figures for previous the Elizabeth Monroe coins which had identical prices, these premiums are more than the market is willing to bear.
Another way to look at the situation is by examining the premiums that the secondary market is currently assigning to the first three coins of the series which are no longer available from the Mint. The Martha Washington, Abigail Adams, and Thomas Jefferson’s Liberty coins are currently selling for approximately $500 and $480 for Proof and Unc versions, respectively. This equates to very reasonable premiums of $58 (13.1%) and $38 (8.6%).
(The approximate prices quoted are based on a rough average of the past few days completed eBay auctions for uncertified First Spouse Gold Coins. Here is a link to the current auctions.)
I think that the main problem is that the Mint cannot keep up with rapidly changing precious metals prices. The current system of pricing coins upon release results in constantly varying premiums over the precious metal value of the coins. These varying premiums in turn impact the ultimate sales and popularity of each series. Last year, this resulted in coins which were constantly unavailable due to product suspensions. This year, it has resulted in products with excessive premiums over the precious metals value.
Over the past few years, the Mint has moved towards offering more products with a close precious metals tie. At the same time precious metals prices have become more volatile. I am not sure if there is legislation behind the Mint’s pricing process or if it purely up to the Mint, but it’s definitely time for someone to reconsider the process.