The Coin Analyst: Modern World Coin Collecting Strategies: Low Mintage Sleepers
by Louis Golino for CoinWeek…..
Within the U.S. coin market, modern world coins are a growth field. American coins of all periods and types continue to dominate the market and collecting habits and interests, and that will likely persist for the foreseeable future. But at the same time, interest in modern world coins is growing and is likely to continue to grow within the U.S. and even more so overseas.
This situation creates some interesting opportunities for astute collectors to determine which modern world coins are sleepers with the best long-term potential for price appreciation, and then seek out quality examples of those coins.
There are many different strategies for doing that. One could build full date sets of certain lower mintage series that are widely collected like Australian Lunar coins and Chinese Pandas. Or one could focus on only the key date and lowest mintage coins from particular countries or just one country. And there is a wide range of other approaches.
There are all kinds of low mintage and key date modern world coins that are substantially undervalued today. As more people around the world and within the U.S. become interested in obtaining these relatively scarce items, demand for them should continue to grow in many cases.
And because a lot of them are still available for bullion-related prices, there is little downside risk in buying them, even if silver prices continue to slump in the short-term. Over time precious metal prices are widely expected to rise substantially as the fiat-currency-based monetary system comes under more and more pressure.
So both rising global demand and rising metal prices should help drive the value of lower mintage modern world coins higher over time.
The increasing interest in modern world coins among American collectors is a result of several trends. One is that newer collectors tend to gravitate to modern coins because they are generally easier and less expensive to collect. Another is the focus on slabbed coins, registry sets, and the chase for the highest-quality examples of particular coins. Top-graded modern American coins in many cases already bring substantial prices, but many foreign coins are not yet as expensive in comparable grades.
As collectors of modern American coins learn more about numismatics and become exposed to the remarkable range and diversity of modern world coins, they often become intrigued and begin picking up coins such as modern world bullion pieces that sell for a little over melt value like Canadian Maple Leafs.
To be sure, outside the United States more people collect world coins, whether from their own country or other countries. Over time I expect this to translate into a larger and larger modern world coin market, especially as countries like China and emerging market countries continue to prosper. Some day the world market will be larger than the U.S. market, and that may be sooner than many people think, especially because of the remarkable growth of interest in modern Chinese coins in recent years.
The expansion of the modern world coin market can also be seen in other trends. For example, modern world coins are now more frequently submitted for third-party grading. Many modern world coins sell out of their entire mintage almost instantly, which rarely happens with modern U.S. Mint issues. And American collectors have finally started to take a stronger interest in modern world coins, which were not long ago seen as not worthy of serious collecting. There are still lots of American collectors who scoff at most modern world coins as “boutique” items not worthy of collecting, but that view is becoming less prevalent.
There are a lot of modern coins that appear to be undervalued in today’s market, especially modern silver coins, many of which have very low mintages yet are still very affordable.
One approach, which I recommend, is to focus on certain countries whose coins are more widely collected than others, and to then zero in on the key date pieces that are still relatively undervalued. That will be a lot easier and more affordable for the average collector than trying to build complete sets, though some of the more bullion-related series can be collected in their entirety with a relatively modest investment of time and money.
The countries I have in mind are Australia, Canada, China, Great Britain, and Mexico. The modern coins of these countries are more widely collected than those of other countries both in the U.S. and overseas.
I have always admired the very attractive design of the modern silver Libertad coins which come in a range of sizes and in both proof and uncirculated finished.
There are many silver Libertads in the larger formats such as two and five ounces minted in the 1,000 to 5,000 range, and gold versions of which only a couple of hundred examples were issued. Yet in many cases like the 2005 quarter-ounce gold coin (mintage 500) they are still priced as bullion, or they carry a premium, but it is not nearly commensurate with the coin’s scarcity and demand for it. Many of these items are also hard to find because so few examples were made. And there are magnificent and stunning silver kilo versions that are still quite reasonable in price too and which typically have mintages around 1,500.
Overall. I believe the Libertad coins offer better long-term value than any other major modern world series. One of the better values is the key date 1998 5 ounce silver uncirculated coin with a mintage of only 2,300 pieces. Another coin worth considering is the 2012 one ounce proof Libertad, which is the only proof Libertad being issued this year.
Silver Britannias from the United Kingdom is another series that combines low mintage and an attractive design that changes most years. Many of the uncirculated coins (especially those from 2001 and 2002, which are the lowest mintage pieces, both being under 50,000 units) seem undervalued at today’s prices.
And the proof versions are issued in very small numbers, usually around 3,000 for the sets plus another couple thousand for the one-ounce proof version. The 2012 silver Britannia proof set, which can be obtained for about $250-275, is the 25th anniversary set. Only 2,600 sets were issued, and four coins are included (one ounce, half ounce, quarter ounce, and tenth ounce). The one-ounce 2012 proof was also released as a single coin.
Canadian Maple Leafs are not quite as visually appealing as Libertads or Britannias, at least to me, but the lowest mintage dates seem very undervalued based on mintage levels. One can still obtain the two lowest mintage coins from 1997 (mintage 100,970) and 1996 (mintage 250,445) for about $65 each, or twice what a common date costs. But consider that in recent years mintages have been as high as 23,129,966 (2011) and you will see why the key dates are worth acquiring at current levels.
Chinese Pandas and Australian Lunar coins and Kookaburras are also worth considering, and these will be discussed in future articles.
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.