by Louis Golino for CoinWeek ……
I recently contacted the U.S. Mint and the Perth Mint in Western Australia for information on some issues that are of great interest to buyers of their numismatic coins, including in particular price increases and mintage levels.
The questions for the U.S. Mint deal with the recent increase in prices for 13 of their silver coins (See Last Week's CoinWeek Article), and the questions for Perth concern some recent moves by that mint to increase the mintages of coins that were previously sold out.
Earlier in the year Perth clarified that any coin that they mint which has not sold out of its maximum mintage could be reminted later. But the latest moves involve coins that had already sold out of their previously-announced maximum mintages, including its line of high relief coins and two-ounce Lunar Series II coins, whose mintages will each be increased by 1,000 pieces when new sets of these coins are released.
My exchanges with officials from both mints appear below.
I would like to extend my thanks to officials at both mints for providing information that collectors should find useful and which shed light on how these mints operate and make decisions.
U.S. Mint on silver price increases
Louis Golino : Can you shed any more light on the recent silver product repricing? A lot of people feel $25 is a big jump on the five-ounce silver America the Beautiful coins, which could hurt sales that just started to pick up finally. A smaller increase would seem to make more sense, something like $10-15, until silver goes higher.
U.S. Mint: Our America the Beautiful Five-Ounce Silver Uncirculated Coins™ are priced in close relationship to the American Eagle Silver One Ounce Coins. As a result, since the price of the American Eagle Silver One Ounce Coins increased by $5 each, it was appropriate to raise the price of the five-ounce coins by $25 each ($5 x five ounces = $25).
LG: How does the Mint decide on the specific increments for silver price increases?
USM: The United States Mint typically evaluates silver coin prices when the market price of silver moves outside of a $5 band, higher or lower. In setting the new higher or lower price, we consider such factors as overall price trends, inventory, the price of numismatic silver products relative to similar bullion coins and the amount of time since the last price change.
LG: Are there any plans to move towards a silver pricing system that is similar to what is currently used for gold and platinum products?
USM: No, we do not plan to implement a pricing system for silver products similar to that used for gold and platinum products. We believe that the current pricing system better serves the much-larger customer base for silver products, which includes more casual collectors, one-time buyers and gift-givers. In addition, given the extreme volatility of silver prices, a grid -- which can force price changes on a weekly basis -- would likely result in price changes far more frequently for silver products.
I also made an inquiry to the Mint regarding what be involved in moving towards a real-time system for precious metal numismatic coin pricing at the Mint, and I am awaiting their response on that issue.
Perth Mint responds to concerns about changes in mintage levels
Perth coins are always of superb quality. I received some excellent examples today. And I fully understand the desire to maximize profits.
But there has to be a balance, and I think a lot of loyal Perth collectors are beginning to ask themselves if they want to spend money on coins whose secondary market value is regularly eroded.
There are certainly instances when it makes sense to make a coin available for different markets and so forth. But the mint is issuing so many different coins, so many variations on the same basic design, and re-issuing so many coins that it is becoming frustrating for many buyers to keep up, or to have much chance of seeing an increase in value.
The main motivation for collecting Perth coins should be the aesthetic enjoyment they bring, but price appreciation is also important for most people.
Finally, I think the Mint sometimes overestimates demand for some of its products.
These comments are all intended to be constructive, and I continue to be an admirer of the Mint and its coins.
I look forward to hearing the Mint’s response.
By the way, was a formal sell-out of the bullion 2013 snake ever announced?
Perth Mint: Good to hear from you again and thanks for your kind comments about the quality of our products.
Thanks also for understanding the business rationale of The Perth Mint – we have a specific brief to generate profit on behalf of our owners, the people of Western Australia. It would be an extraordinarily sad day for collectors and investors if the existence of the Mint was threatened by its inability to meet this mandate!
On your main point about the large number of “variations on the same basic design” – this observation really only applies to the Lunar coin program since 2012. We certainly didn’t hear any comments on this topic prior to then.
As you know, the Year of the Dragon heralded unprecedented demand. We set out to meet the interest and given extra capacity could have sold more product than we actually released into the market. The most popular Dragon variations sold out very quickly; only a handful are yet to reach their mintage limits.
Given so many sell outs, we think it’s valid to question whether “secondary market value is regularly eroded”.
The Lunar Snake is also an expansive program – planned at the height of the Dragon frenzy. Demand is good, but the market is not quite what it was. In tandem with our dealers and distributors, we are watching developments closely. Comments from you and others are clearly extremely useful in gauging collector sentiment.
So we hope these thoughts are useful and that the message that we are genuinely listening to collectors’ concerns can be conveyed to your readers.
Perth Mint sell-outs are provided here .
Appreciate your interest,
Perth Mint Blog Team
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.