by Louis Golino for Coin Week
Perhaps it just comes with the territory when you are the world’s largest coin dealer, but the U.S. Mint just can’t seem get a break from coin collectors and investors no matter what it does.
Pick up any leading print coin publication, or read the typical coin blog or other online comments from collectors, and critiques of the Mint are almost always the dominant topic.
To be sure, there are lots of areas in which the Mint could do a better job such as by updating its web site to better handle high volume periods, and by implementing some kind of real-time or once a day update of the prices of coins whose value rises and falls with changing precious metal markets.
The recent increase in volatility of those markets has been a real challenge for the Mint. In the absence of a more flexible pricing structure, it will continue to face the risk that the changing value of metals will make its prices obsolete. But this situation has also provided buyers who are paying attention with some good opportunities.
For example, right now the 2011-W American platinum eagle, which sports one of the most beautiful designs ever to grace a U.S. coin, is priced at the lowest level ($1792) since it was released earlier this year.
That is because platinum is priced less than gold at the moment. Before the 2008 financial crisis platinum was trading well over $2,000 an ounce.
Normally gold and platinum numismatic products sold on the Mint’s web site are repriced once a week on Wednesday based on a combination of the average metal price during the previous week and the London pm closing metal price on Wednesday.
During the summer the Mint had to suspend sales of its gold $5 commemoratives, as I explained in an earlier column, because the melt content of the coins was approaching their retail sale price.
In response to this situation, the Mint developed a pricing grid for gold commemorative coins similar to the one used for other numismatic products. This has allowed the Mint to reprice these coins weekly rather than have to stop selling them for weeks.
In the past several months a number of silver products have also seen their sales suspended because of rising silver prices.
Then in late September, when silver declined dramatically, the Mint suspended sales of several silver coins so that it could re-price them at lower levels. It did not do this in the spring when silver also declined sharply.
On October 7, the Mint re-listed those silver coin products at new, lower prices. This was, as far as I can remember, the first time the Mint has lowered prices on silver coins.
One would think coin buyers would be pleased with the new prices and the chance to save some money, especially since precious metal prices are back on the upswing now.
Moreover, it is important to remember that under existing law, the Mint needs to publish notices in the Federal Register when repricing silver products.
It would clearly be preferable for coin buyers and the Mint to have a real-time or at least daily price update, but moving towards such a system is something that can not happen overnight and that would probably require the approval of Congress, which tends to move very slowly.
For reasons I find hard to understand, the initial reaction to the new prices, at least in the online comments I read following the Mint’s repricing of silver products, was largely negative. Some complained that because they had paid the earlier, higher prices and could no longer return the coins, they should get a refund on the difference, or that lowering prices was just unfair to people who bought at higher levels. Clearly those buyers do not understand that buying coins with precious metal content comes with risks.
Others claimed the Mint is desperate to unload the silver coins that were repriced, namely the new 2011-W burnished American silver eagles, proof silver eagles, and numismatic versions of the five-ounce America the Beautiful Coins. The ATB releases were reduced by $50 a coin, and the eagles by about $10 each.
I do not know how representative such comments are, and it will be interesting to see what others say in the coming weeks, and to see the impact of the new prices on sales levels of Mint products, which are released once a week to a small group of numismatic editors and writers, including myself.
In my view, the Mint did the best it could under the challenging circumstances that currently prevail.
Moreover, other world mints such as those in Canada, Australia, and Germany price their numismatic offerings substantially higher than does the U.S. Mint or reduce their silver content to compensate for rising silver prices.
There are plenty of other challenges facing the Mint. One of them is that in the past year or so there appears to have been a discernible decline in the quality of some of the numismatic products the Mint sells.
The majority of coins sold by the Mint continue to be of high quality, but there has been a troubling decrease in quality control of some coins, including some commemorative issues and others.
An example is the 2011-W burnished American gold eagle, which is the first burnished gold coin sold by the Mint since 2008.
For some reason many examples of this coin have surface problems, especially in the breast area on Miss Liberty.
I went to two of the U.S. Mint’s sales counters a couple months ago to examine this coin and was shocked that the majority had such issues. I had to go through every coin they had to find one that I was really satisfied with. I have read that many people have had to return this coin multiple times.
Customer service is also an area where the Mint has received a lot of criticism. There is no question that in the past it has been almost impossible to reach a live representative during busy periods, but that seems to have improved a great deal in the past year.
I also think the Mint has been doing a better job overall of trying to address the concerns of its customers, although it would be helpful if there were more avenues for feedback.
Perhaps the single biggest area for improvement, in my view, is the distribution of circulating coins, especially quarters and dollars. This is something that is really hurting the future of the hobby because it turns off younger collectors and others new to numismatics. It is a real shame that collectors of quarters and dollar coins are forced to purchase them at marked up prices from dealers or the Mint, when the coins should be readily available from banks and in change.
The Mint clearly needs to work with the Federal Reserve and the Congress to develop a distribution system for these coins that works, and this should be a top priority of the Mint.
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 Coin Week, “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.