At the time of writing this post, the price of gold has jumped to $1,712 per ounce. As a consequence of the US Mint’s pricing policy, which uses weekly averages and makes pricing adjustments periodically, the prices of certain numismatic gold coins are getting close to the market prices for equivalent bullion coins.
While everyone must make their own decisions about whether or not, when and how to purchase their precious metals, the convergence of premiums make current numismatic gold products a more compelling purchase when compared to bullion. While gold bullion products will almost always track the market price of the metal, numismatic gold products have the possibility to appreciate on the secondary market based on low mintage or other factors. Usually, collectors pay for the extra potential of numismatic gold coins through higher premiums.
The one ounce 2011-W Uncirculated Gold Eagle is available from the US Mint for $1878. By comparison, the cash price of a one ounce bullion Gold Eagle from a major precious metals dealer is $1,817. For a purchase by credit card, the price is $1,871.
Many collectors are viewing this coin as a potential secondary market winner after the coins are eventually no longer available from the US Mint. Across all years and versions of the American Gold Eagle, the issue with the lowest mintage is the 2008-W Uncirculated $10 Gold Eagle at 8,883 pieces. Barring anything unforeseen, the 2011-W Uncirculated $50 Gold Eagle will likely set a new mintage low. Through the last available sales report, sales have reached 3,894, although lately there have been some big weekly jumps.
There are some potential stumbling blocks to this issue. In a previous post, I questioned whether the recently smaller mintages for gold coins would become the “new normal” as higher precious metals prices make new issues more and more expensive. A mintage around 5,000 for a gold coin doesn’t seem as dramatic today as it did in the mid-1990’s. Another factor is that so many collectors view this coin as having the potential to be a big secondary market winner. If most of the people purchasing the coin are simply looking to resell it in the near future, this will create a deep supply in the marketplace, holding down prices. Finally, while there still has been no confirmation one way or the other, the issuance of a special 25th anniversary Gold Eagle Set might drive up the mintage. In 2006, the US Mint included the one ounce collectible uncirculated Gold Eagle in a 2-coin 20th anniversary set that accounted for 10,000 coins.
Moving on, the 2011-W Proof Gold Buffalo is available from the US Mint at $1,910 per coin. The cash price for the plain bullion version is currently around $1,820 with a credit card price of $1,875.
Extrapolating from sales trends, this issue has a strong possibility of being the second lowest one ounce proof Gold Buffalo in the series. The most recent sales show 14,822 units sold to date. If sales remain somewhat consistent through the rest of the offering period, the final number would fall between the current mintage low of 18,863 for the 2008 and the next highest figure of 49,306 for 2009.
I previously discussed at length the interesting prospects for this year’s commemorative gold coins. The proof versions for each program are still priced at $454.95 and the uncirculated versions are $444.95. Each coin contains 0.242 troy ounces of gold, which has a current market value of around $414. Considering that the US Mint prices include a $35 surcharge, which will be distributed to the beneficiary organization, the US Mint is currently netting less than the market value of gold on the uncirculated versions of the coins.
Remaining numismatic gold products include the five different First Spouse Gold Coins and the fractional and one ounce versions of the Proof Gold Eagles.
The first opportunity for the US Mint to adjust prices for most of these products should be around mid-morning on Wednesday. The extent of the increase will be determined by the average market price of gold based on London fix prices from last Thursday AM to this Wednesday AM. The prices for commemorative gold coins cannot be adjusted automatically, but rather sales would be suspended until new prices could be published in the Federal Register.
If the price of gold really continues to move, it’s always possible that the US Mint could suspend sales across the board. The current pricing grid includes the statement: The United States Mint reserves the right to discontinue sale of gold numismatic products in the event that the selling price of United States Mint gold bullion products begin approaching the sale price of the gold numismatic products.
Hopefully by “discontinue”, they mean “temporarily suspend.” And the term “begin approaching” leaves things very ambiguous.
Mint News Blog Website News
Over the weekend, the transition of Mint News Blog from the blogger platform to wordpress was completed and commenting features have been restored. From a reader standpoint, things should remain essentially the same, but the change will help me to administer the blog more easily and effectively.
The official website address has changed to http://mintnewsblog.com/ If you have the old address or pages bookmarked, the links should automatically redirect to the new addresses. Email and RSS feed subscribers should also continue to receive news posts without interruption.
Thank you for bearing with me while the site was transitioned.