The Coin Analyst: West Point Set Sales End at the Mint, as Graded Set Price Wars Begin
by Louis Golino for CoinWeek ………
On June 6 the U.S. Mint ended sales of the special two-coin American Silver Eagle set marking the 75th anniversary of the West Point Mint. As of the previous day, 251,695 sets were sold, according to the Mint’s web site odometer, a number similar to the last day’s number for the 2012 San Francisco sets, which were later adjusted to just under 225,000 to reflect orders cancelled. It is important to keep in mind that the sales odometer only provides an estimate of total sales.
On June 7 at 3:00pm the Mint released the final sales odometer figures, which clocked in at 281,310 sets sold. That would be the highest number for a special eagle set.
Many people had been expecting a big last-minute surge this year like last year despite the fact that almost 65% of orders (or about 182,000 of 281,000) were placed during the first two days of sales.* One dealer told me he knew of another company that ordered 35,000 sets on the first day.
Even if the semi-final, unaudited sales number is adjusted downward, it appears the 2013 sets were a big success for the Mint. They sold substantially more sets than last year and were able to make use of extra two-coin packaging that was created last year when they anticipated more sets than were sold.
Clearly, the inclusion of a new coin, the enhanced uncirculated eagle, drove demand higher for the 2013 sets.
I also suspect fewer sets will be cancelled this year than last because what drove a lot of last year’s cancellations was anger at the Mint for releasing one of the coins in the 2012 set, the 2012-S proof coin, separately in another product. The Mint has stated categorically that this year’s coins will be unique to the set.
The question for buyers and dealers is how the 2013 sets will perform on the secondary market. Will raw sets turn out to be, at least for now, relative duds on that market because people were able to buy what they needed from the Mint? Or will the new type of coin in the set keep demand at higher levels as new collectors come in who want those coins? And what will happen to graded sets?
Last year the Mint ended up delaying delivery of the San Francisco sets, and relatively few buyers were able to obtain them in time for them to be first strike and early/first release-eligible at PCGS and NGC. That pushed up values for sets with those designations, at least for a while.
But it also created what one coin dealer told me was “the carnage of last year” as far as graded San Francisco sets, which “popped and dropped,” meaning when a large number of sets finally came on the market, once the Mint has shipped its orders, prices dropped substantially, especially for raw sets.
Just as sales began to wrap up at the Mint for the 2013 sets, a pricing war began to break out among the leading coin and bullion companies that started taking pre-orders for MS/PF69 and 70 sets of the 2013 coins.
The first to take pre-orders was Goldmart , which initially priced its PCGS 70 first strike sets at $349.99, and its NGC 70 early release sets at $289.99.
Then on June 3 John Maben’s Modern Coin Mart started offering pre-orders to customers who had earlier expressed an interest in buying graded sets. His company offered the NGC 70 early and first release sets, and priced them at $289.99 plus a free half ounce of silver if ordered on the first day.**
Then Goldmart on June 4 lowered the price on its sets and offered a refund to customers who had bought them at the higher levels. The sets were now priced at $289.99 PCGS and $239.99 NGC.
On June 5 Silvertowne started offering pre-orders for the sets with many different labels. PCGS 70 first strike sets with special American Eagle labels and the new West Point set labels were priced at $289.99, and NGC 70 first/early release sets were priced at the same level. There was also a PCGS 70 set priced at $259.99 with first strike label, but the image was apparently a mistake as it was removed on June 7. I do not think Silvertowne intended to suggest it was selling any first strike sets at $259.99.
At this point Goldmart, which prides itself on being in its words, “America’s low-cost precious metals dealer,” lowered its PCGS 70 first strike sets to $274.99 and kept the NGC sets at $239.99.
Comments from buyers on online forums such as the PCGS message board noted that Goldmart has the lowest price on these sets and many said it was a “no brainer” to buy at those levels, while others said prices could drop later because West Point coins are usually of high quality, suggesting there could be a lot of 70-graded coins.***
A representative of Goldmart told me that: “There is a fine line on price points for pre-order sets” and that “To be competitive and because we want to give our customers great prices, not get the most out of them,” they priced their sets at 5-10% over cost. He added that he thinks now is a “great time to get in at entry level prices” on the 70-graded sets.
In response to why his company priced the sets lower than other companies, the Goldmart rep said that today’s coin customers are very savvy, and that with all the competition out there dealers need to price their coins as competitively as possible. As a result, he said, “Wholesale is the new retail” in coin pricing.
He also pointed out, as have collectors in various online forums, that the Mint’s shipping dates on these sets are being pushed forward, and that he thinks the Mint learned from last year’s experience.
When asked what he thinks the potential is for unopened first strike/early release-eligible sets, he responded that it depends on how many the Mint releases in its first shipment. In other words, if it is a relatively low number, the sets should acquire more value, and vice versa.
Finally, several writers, including David Harper, editor of Numismatic News and Stephen Roach, editor of Coin World, have said recently in their columns that they think the Mint will either continue issuing annual enhanced uncirculated eagles because of their pride in the new technology (Roach), or will issue another special set next year (Harper) because of the success of this year’s sets.
So far the Mint has only said that it will use the new multi-finish techniques on other numismatic releases, and it has not indicated whether it will keep issuing eagles with the new finish, or whether it will issue a special set next year.
I know that people at the Mint read publications like this one, and they are surely aware of the potential for overdoing things. So don’t assume there will be an enhanced uncirculated eagle or special set next year, but do expect the Mint to continue exploring ways to innovate.
Hopefully the Mint will try something different (like an ultra high relief coin) the next time it issues a special eagle set like, which might not be until 2016, the 30th anniversary of the program.
Plus next year a lot of focus will be on the special Kennedy half dollar anniversary sets.
* The fact that the majority of the 2013 sets will be first strike and early release eligible may keep a lid on values for sets with those labels, though in the past buyers have often been willing to pay more for such coins even when they were not scarcer than their non-first strike and early release counterparts.
** Because interest in 70-graded first strike and early release sets is much higher than interest in 69-graded and non-first strike and early release sets, and for space reasons, I choose to discuss only the more desirable sets here.
*** An important point to keep in mind is that while NGC only requires that the West Point coins be sent in their original capsules, PCGS is requiring submitters to send the entire packaging unopened, which means submitters cannot pre-screen for quality.
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.