The Coin Analyst: Are Low Mintage Collector Coins the New Normal ?
by Louis Golino for CoinWeek ……
In the last couple of years, particularly this year and in 2011, an interesting trend has emerged in modern U.S. Mint collector coins. The trend is that many coin series have seen the emergence of new low mintage key coins. For example, the 2011 Army uncirculated half dollar, which was not very popular when it was available, set a new mintage low for the clad commemorative half dollar series. Values for that coin increased substantially not long after the coin was pulled from sale in mid-December. It has settled down since then, but still sells for a premium.
In addition, the 2011-W burnished uncirculated $50 American gold eagle only sold 8,822 coins, which was a low not only for the burnished series, but for all American gold eagles of any kind.
Then there are the First Spouse gold coins, which saw sales drop so low, that two of the 2011 coins, the Lucy Hayes and Lucretia Garfield uncirculated pieces, set new lows not just for that particular series, but for any coin issued by the U.S. Mint since 1915.
With respect to the new spouse keys, I wrote recently about an article in the PCGS e-newsletter that speculated as to whether cancellations of last-minute orders for the Garfield coin would end up driving the mintage of both coins to roughly the same level.
I recently made a request to the Mint on sales of these coins, and I uncovered an important fact that may impact the market for these coins. Currently, the secondary market prices both coins at a large premium, roughly three times their original issue price of about a thousand dollars and more for MS70 examples. The Hayes coin in MS70 is bringing roughly $3500-4000, and the Garfield coin is selling for about $2800-3000.
But according to the information I obtained from the Mint, the Garfield coin may actually have a lower mintage than the Hayes piece. I was told that the Garfield sales, after taking into account cancellations of orders that could not be fulfilled, sold a total of 2,167, which is lower than the Hayes sales of 2,263, as reported on the last weekly Mint sales report that has an updated figure for that coin.
This is the exact language I received from the Mint in response to my inquiry: “The United States Mint does not have an explanation for why orders of the Lucretia Garfield First Spouse Gold Coins increased significantly the week of August 6. However, it called a sellout the morning of August 9, 2012, and the United States Mint cancelled orders for a total of 288 units still pending at that time. Per the United States Mint Daily Sales Report, we sold and shipped a total of 2,167 units of the Lucretia Garfield First Spouse Gold Coins.”
But I would still caution that those are not the final audited numbers, which will probably not be available for about a year.
On November 9 the Mint unexpectedly announced a sell-out of the 2012-W burnished $50 gold eagle. Last reported sales for that coin total 5,796 units. New data will be available this week that will give a better idea of total sales through the sell-out.
Overnight, this coin went from being a $2,000 coin to one worth $3,000 or more. It was literally a speculator’s dream come true! I saw an auction for an MS70 PCGS first strike example that ended on the evening of November 8 at about $2100, and the next day the same coin sold for more than $3,200. The reason is that this coin set a new low for the series and for all gold eagles. Final sales have not yet been reported, but they will be somewhere in the range of 6,000 coins, which is one-third less than last year’s sales of the same coin. It is true that a future year’s coin could come in lower, but it is unusual for the Mint to end sales at such a low level, especially when the previous year’s coin sold a lot more units.
A similar pattern has emerged with the $5 gold commemorative coins. Last year’s uncirculated Army and Medal of Honor coins had relatively weak sales. Although they did not set new lows for the series, any coin in that series with a mintage below 10,000 usually sells for a premium in the secondary market. Those two coins respectively sold 8,062 and 8,251 units. The series key is the BU 1997 Jackie Robinson coin at 5,174.
This year’s $5 Star-Spangled Banner coin has only sold 4,638 pieces so far, and the coin went into back order status over the Veterans’ Day weekend. Backorder status is sometimes an early indicator that a coin is about to sell out. Although the commemorative coin programs for this year are to remain on sale until December 17, and the $5 Star-Spangled Banner coins have not sold out of their maximum authorized mintage of 100,000, the proof versions of the coins are still available.
My understanding is that under those circumstances, the Mint could in theory end sales of the BU coin earlier than the official end of the program since the proof version would still be available. The authorizing legislation does not specify a breakdown between proof and uncirculated coins, although I am not aware of an instance when sales of the uncirculated coin were ended before the proof version for commemoratives.
Even if there is a flurry of orders for this coin in the next couple weeks, I doubt that more than a couple of hundred more coins will be sold, especially given the fact that most people’s budgets are strained and the holidays are approaching. I suspect the final mintage will come close to the Jackie Robinson mintage, maybe even a bit lower.
There are no guarantees, but I think this will be a low-enough mintage (roughly 5,000) that the Star-Spangled Banner coin will command a decent premium towards the end of the year, or early in 2013, and depending on the mintage of future coins, it could reach a major premium, as the Robinson coin did after some time passed. **
It is worth noting that last year’s $5 gold coins have not been selling for very strong premiums apart from MS70 examples. But those coins sold about 3,000 more units than this year’s, which is a substantial difference.
Most commemorative collectors are attracted more by the mirrored and polished surfaces of proof coins, and uncirculated commemoratives have always tended to fall under the radar even though they have consistently been lower mintage coins.
These successions of new low mintages, such as with the 2011 and 2012 burnished gold eagles, have prompted some people to ask whether we are witnessing a new normal in which one year’s low mintage coin is replaced by the following year’s even lower mintage coin, or one that is issued a couple years down the road.
The reasons for the unusually large number of low mintages in recent years, and there are others besides those mentioned above, have a lot to do with the still-struggling economy and rising precious metal prices, both of which have made it harder for many collectors to keep their collections updated, or to purchase extra coins, as they may have in the past.
The “new normal” thesis is intriguing, but it is simply unclear at this point to what extent this trend will keep repeating itself. Besides, it is hard to generalize because different coin series have their own sales dynamics and appeal to different collectors and buyers.
For example, next year’s $5 gold coin for Gen. Douglass McArthur is likely to be very popular, though if gold prices really take off that could put a damper on sales. Also, $5 gold coins are not issued every year. In fact, the 2011 coins were the first ones minted since 2008.
In addition, an especially low mintage, such as that of the new spouse keys, is likely to catch the attention of astute collectors and speculators. That is why there were so many late orders for the Garfield coin after the Hayes piece sold out not long before. The spouse series has been especially interesting in this regard because sales of several coins in the series were ended much sooner than most people expected, as happened with the Julia Tyler coin.
The bottom line is we will just have to see what happens, and that is part of what makes collecting modern U.S. coins so much fun. Chasing low mintage collector coins can be a risky business since you never know what will happen later, but that does not change the fact that there are interesting opportunities that arise periodically for short or longer-term gain.
** On November 14 the U.S. Mint released sales data for the previous week which showed that the Star-Spangled Banner gold uncirculated coin saw a jump of over 488 coins, bringing the total to 5,128. I believe that was the most coins sold during any week since the coin was made available earlier this year.
This coin will clearly not have a final mintage number as low as the Jackie Robinson BU coin, but it is likely it will become the second lowest mintage coin in the $5 gold series. The current second lowest mintage coin is the 2001 Capitol Visitors’ Center coin with a mintage of 6,761 coins.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.