Sep 18, 2008 | Eagles, gold, silver, US Mint
When I started writing this blog in 2005, gold was around $470 per ounce and silver was around $7.75 per ounce. The economy was going strong and the numismatic market starting to really move lead by the strong housing market. For collectors, we wondered how high gold and silver would climb and how much more our collections would be worth.
As the economy is collapsing under the pressures caused by the failures of large financial institutions, gold opened the year at $846.75 per ounce, climbed to a high of $1,006.75 on March 18, and closed at $813.00 as I write this on September 18. After the some predictions of gold closing the year over $1,000.00, gold is now down for the year by over $30.
Additional pressure on the market will be the sale of $40 billion in 35-day bonds that will help the Federal Reserve fund the AIG bailout. While some see this as good for the government, there are others who think investors will run away from the market and look to gold as a safe haven.
Overnight, it is being reported that Morgan Stanley is talking with China about cash investments and mergers.
This has made all markets a bit skittish and looking for “safer” investments. Those looking to buy American Eagle bullion coins has been having a difficult time finding coins since the Mint admitted that they have a shortage of gold and silver.
While researching a future post, I visited the Kitco website and found the following note on their front page:
In order to reflect the current strong demand for Silver Maples and Silver Eagles, Kitco is temporarily increasing its current bid (buyback) price for these particular products. Please visit our Selling to Kitco page for more details.
The good news for those buying bullion, the prices are probably the best in a year. For example, the current price for American Eagles at Kitco are selling with a 6½-percent premium for gold and 11.2-percent premium for silver. These are better prices than purchasing from the US Mint.
Given the current environment, it is difficult to say where the financial markets are going and how it will affect the market for coins. We do know that generic gold and silver (common date) coins and bullion will rise and fall with the market. But it makes it difficult to consider what will happen in the collectible market. I will have some thoughts in a few days.
Sep 15, 2008 | Eagles, gold, platinum, silver, US Mint
When I woke up this morning, I found that Lehman Brothers filed for Chapter 11 Bankruptcy protection on Sunday. Merrill Lynch, another venerable Wall Street institution, is being purchased by Bank of America. Insurance giant AIG is asking the Federal Reserve for a bridge loan to weather its own fiscal issues. As the Dow Jones Industrial Average index drops 300 points after the markets open, it is not surprising that there are worries about the fundamentals of the economy.
Those of us in numismatics, we watch the prices of precious metals for indication as to how our market is going. In recent weeks, gold, silver, and platinum have been falling to levels not seen since early 2007. As I write this, gold is up $11.80 to $775.50 per ounce (1.5-percent) while silver is up only 20-cents and platinum is down $38.00.
The general rule of thumb is that when there are problem in the capital markets, investors try to convert their cash to precious metals. While gold is the most popular investment, the relatively stable prices and average trading volumes suggest that investors are not running away.
For the collector, this means that collectibles tied to the prices of precious metals should not move much. Even though the U.S. Mint has not changed its prices during this declining market, those using American Eagle and 24-karat Gold Buffaloes as investments can find coins from previous years at lower prices.
If you are collecting rare coins, the PCGS3000 Index (a market basket price of 3,000 rare coins) shows that prices are up $4.65 for the day (0.01-percent). The PCGS3000 index has trended upward since November 2007.
As a collector and not an investor, I will take the advice of Dave Harper and wait to see what happens to the market. The currents are much to rough for a collector to jump in head first!
Aug 18, 2008 | Eagles, silver, US Mint
This morning, I was checking the prices of the various commodities market and noticed that metal prices rose a little in foreign markets. Gold is hovering just below $800 per ounce and silver is under $13. Both are significantly lower than their recent six-month highs. It made me curious as to whether the US Mint is still selling gold and silver at a significant premium.
As I looked through their online catalog, I noticed that Proof American Silver Eagles are no longer for sale!
Legally, there are no limits on the number of proof American Silver Eagles that may be sold. But the Mint has placed limits on the sale of these coins. In 2003, there was a published limit of 750,000 coins. However, since 2005, the Mint does not report there being any limit on the sales of American Silver Eagle proof coins.
Last week, the Mint halted gold bullion sales to dealers. A move that has been speculated to be tied to the downward trend in the price of gold. But American Eagle gold collectible coins remain for sale at their previous prices.
Are the American Silver Eagle proofs sold out or is there a production issue that the Mint has yet to announce? Inquiries to the Mint have not been unanswer at this time. Stay tuned.
Aug 15, 2008 | Eagles, gold, silver, US Mint
Several sources are reporting that the US Mint has suspended sales of American Gold Eagle bullion coins to dealers. There has been no announcement but the Mint has refused to take orders.
American Eagle Gold Proof and collector uncirculated coins are still for sale at the Mint’s online catalog. All coins appear to be available with no backorder messages.
Gold has fallen below $800 during today’s trading. In this week’s trading, gold dropped 8.4-percent for the week. Silver also fell 16.4-percent. The fall is attributed to the strengthening of the US dollar.
Since gold reached $1,004.30 on March 17, the price has dropped more than 20-percent over the five months.
Silver has not been immune to the a change in value. From the high of $21.24 and a close of $20.64 on March 17, the current price of silver is $12.75, a 38-percent drop in value.
Currently, the US Mint has not indicated that they would revalue collectibles in the light of the market downturn. One reason could be that the Mint bought the metals at the higher prices and need to recoup their investment in these metals as part of their real cost of doing business. However, if the price of metals drop and sales of Eagles decline, then the Mint will have to adjust its prices.
Last year, we speculated about what it would take for the Mint to raise prices. What will it take for the Mint to lower prices?
Jun 10, 2008 | Eagles, legal, legislative, US Mint
We have been in for a wild time here in the Washington, DC area. Severe thunderstorms and high winds swept through the area on Wednesday and Saturday providing the electric companies with quite a bit of work to do. During that time, I am reminded once again that computers cannot function without electricity.
While the rest of us were sweating and fixing our homes, the US Mint and Treasury policy implementers were downtown trying to figure out how to throttle the sale of silver on the open market. In fact, the Mint has been slowing the sale of American Silver Eagle bullion coins since April.
According to a letter sent to authorized bullion purchasers, the Mint has experienced “unprecedented demand” for silver bullion coins. While the demand for silver has risen, the Mint’s supply has not been able to keep up with the demand. So the Mint will be increasing production at the expense of collector American Eagles and while limiting the sales to bullion dealers.
Although sale of silver bullion has surpassed expectations, expectations by the US Mint should have been higher. With the economy waning, it should not surprise the Department of the Treasury that people would hedge their money against inflation through the purchase of precious metals. This is one of the oldest strategies in investing. Yet, the Mint all but admits to being caught short by this. Why?
Many have commented on the Mint’s shortsightedness while others argue that the Mint is acting illegally. I think it is mired in politics.
Since the seating of the 110th Congress, there has been a subtle show of acrimony between the Mint and the new congressional majority. US Mint Director Edmund Moy has made it clear that he thinks the Mint should have the power to determine the content and design of US coins. The House of Representatives responded by introducing H.R. 3956 that would give this power to the US Mint.
After H.R. 3956 was introduced, fellow members and watchdog groups question whether the bill would be constitutional since it will pass off to the executive branch the power “To coin Money, regulate the Value thereof…” (Article I, Section 8). To fix these issues, H.R. 5512. In H.R. 5512, congress would continue to determine the composition and design of coins while the Mint would become advisors.
When the bill passed the House, Moy was quick to disagree with H.R. 5512 by suggesting that the Mint should have more control over the composition and design of the coins. He also requested that the bill be changed to provide more time to implement the requirement for copper-colored steel cents. The current bill requires the change to occur in 90 days. Moy said that the conversion would require 18-24 months.
There may be more to this than just one bill. Following the passage of the Native American $1 Coin Act, the Mint thought they had a loophole that would prevent them from minting Sacagawea Dollars in 2008. Letters were exchanged between Congress and the Department of the Treasury explained the law that was passed and said that the Mint should strike Sacagawea Dollars immediately. Sources report that contentious discussions suggested that the Director would be in violation of the law if the Mint did not strike Sacagawea Dollars. Allegedly, this conversation occurred two weeks before the availability of 2008 Sacagawea Dollars.
Moy again by proposing the Mint strike 2009 Double Eagle Gold $20 ultra-high relief coin based on 1907-1908 design by Augustus Saint-Gaudens. When introduced to the Citizens Coinage Advisory Committee, Moy stated that 31 U.S.C. § 5112(i)(4)(C), the authorization of the American Eagle program, gave the Mint the authorization to strike these coins. Congress disagrees because everything about the coin, from composition to design, is not codified in the law. Rather than argue with the Director, both the House and Senate introduced appropriate legislation to authorize this coin.
Now, when the Mint was questioned on the distribution problems with silver, the Mint responded with a brief statement that said in part, “By law, the United States Mint’s American Eagle silver bullion coins must meet exacting specifications and must be composed of newly mined silver acquired from domestic sources.” (emphasis added) The problem is 31 U.S.C. § 5112(e) and 31 U.S.C. § 5112(f), the laws that authorizes the bullion program does not say that the coins must be made of newly mined silver. In fact, the law does not require that the silver be purchased from US-based mines. All it requires is that the silver used be purchased at market value and the bullion sold at a value based on the silver market.
It appears that Director Moy is using a pedantic reading of the law to make his point. Rather than working with congress to resolve these issue, Moy would rather use politics to make his point hoping citizens would complain to congress. Sources say that Rep. Luis Gutierrez (D-IL) has emphatically told both Moy and Treasury Secretary Henry Paulson to resolve the situation. Rep. Gutierrez is Chairman of the Domestic and International Monetary Policy, Trade and Technology Subcommittee which has oversight responsibility over the Mint.
Individually, these policy moves by Director Edmund Moy do not seem significant. Together, they represent a pattern that shows the Director is looking to increase his power over the Mint. Moy needs to remember that he is the boss of the manufacturing operation charged with the responsibility to strike coins as prescribed by the 535 member Board of Directors (congress) and approved by the Chief Executive Officer (president). Moy’s actions are insolent and should be the subject of disciplinary actions by the Board of Directors.
Apr 23, 2008 | Eagles, gold, silver
In the volatile commodities and money markets, the spot price of gold dropped under $900 per ounce briefly as the dollar rose against the Euro. Pressure is being placed on the Euro as analysts think it may not be able to maintain its current value against the weakening dollar and the high price of crude oil.
Bloomberg is reporting that analysts believe that the price of crude oil is unsustainable and will weaken other non-dollar currencies as the price falls. Speculators are selling gold futures looking to make more money with oil and currency futures. This has lead some analysts to believe that gold will fall below $900 by the end of the year citing lows in the range of $860 to $880.
Silver is also trading lower but above the $17 mark. Analysts speculated that silver will slip below $17. Nobody expects the prices to reach the levels seen in 1980.
For numismatics, the lower spot price of precious metals should lower the cost of bullion coins, such as the American Eagles. However, with the popularity of collecting earlier common date gold coins, those prices may not fall as much since their numismatic value may help them maintain their prices.
Dec 14, 2007 | coins, Eagles, platinum, US Mint
If you are looking for a real nice present, you may want to consider buying the 2007 10th Anniversary Platinum American Eagle set. The set consists of two half-ounce platinum proof coins. One is a regular style proof where the elements are frosted and the fields are mirrored. The other coin is what the US Mint is calling an “Enhanced Reverse Proof” because it is not an exact reverse proof—only parts of the elements are reversed to enhance the design. Both coins carry the “W” mint mark.
The Mint will produce no more than 30,000 sets and will restrict the sale of one coin per household for the first seven days of sale with a projected shipping date of December 31, 2007. The set sells for $1,949.95 for one ounce of platinum in a special box. Platinum closed at $1,475 (per ounce) on the New York spot market.
Nov 4, 2007 | Eagles, grading, US Mint
Although all that glitters may be gold, I like the look of silver. One of the most beautiful coin designs is the Walking Liberty motif by Adolph A. Weinman. From 1916 through 1947, this phenomenal design graced the US half-dollar before it was changed to honor Benjamin Franklin. When the American Eagle bullion program was started in 1986, the US Mint revived the Weinman design for the one dollar Silver Eagle and the Augustus Saint-Gaudens design for the Gold Eagles.
While the Saint-Gaudens design is wonderful, the Weinman Walking Liberty design is my favorite. So I have been collecting the Silver Eagles since their inception in 1986. When the Mint started to sell the collectible Silver Eagles with the satin finish, I decided to add these coins to my collection.
I purchased three satin Silver Eagle coins from the US Mint. One was removed from the holder and placed in an album. One was left in its package. The third was sent to NGC for grading. Last year, the coin I sent to NGC was returned graded MS-69. A nice coin but not quite perfect. But this year… that was a different story. I sent three coins to NGC and two of them came back graded MS-70 PERFECT!
PERFECTION! I have never owned a perfect coin until now. But this coin, and the one I sent to my father as a belated Father’s Day gift, were graded MS-70 PERFECT by NGC. Not only is it a beautiful coin, but it’s a PERFECTLY beautiful coin!
Stay tuned… there may be one more!
Sep 19, 2007 | BEP, Eagles, US Mint
We collectors of US coins cannot live without the US Mint since they are the government’s exclusive manufacturer of coins. They run the world’s largest coin factory in Philadelphia, second largest in Denver, and they control the market for present-day collectibles. Last week, the Mint suspended the sale of uncirculated American Gold Eagles with the “W” mintmark because of the rising price of gold. It was reported that sales of gold American Eagles will be repriced and returned to sale on or after September 27.
Today, I visited the Mint’s website to order proof sets. On their front page is a graphical changing area that tells the web surfer about available coins. The first banner was for the uncirculated gold American Eagle coins. When I clicked on the image, I was sent to the on-line catalog that shows that these coins are are “not available.”
Even though I am not in the market for gold American Eagle coins, I found it distressing that the Mint would announce the situation to the media and leave the publically accessible website to provide conflicting information. The Mint public relations department should be more diligent at ensuring the website as the correct information, especially since the Mint wants more people to use it rather than the telephone services.
Since the recent growth in the collecting market, I have not had problems with orders from the US Mint. I once had problems with the Bureau of Engraving and Printing that was blamed on their mishandling of technology. But this example of conflicting information and careless treatment of public information can cause problems for some customers. As a government agency with exclusive manufacturing rights to our coinage, the Mint must be held to a higher standard for the integrity of the country they represent.
Jul 31, 2007 | ANA, Eagles, fun, YN
Over the weekend I went south Florida for a family function. In Florida, I saw my teenage nephews. Last year, I gave my older nephew various coins and coin sets to commemorate his birthday and reaching 13. I did the same for my other nephew this year. These gifts include Mint sets from the year they were born, a package that included the last Susan B. Anthony Dollar and the first Sacagawea Dollar as being the first coin change in their life time, and other coins. For this year, I found a folder of coins with the pre-Euro coins that my nephew found interesting.
Giving coins as a gift has inspired my older nephew into building a collection. While both do collect 50 State Quarters in a map folder I had given them, my older nephew seems to have gravitated to American Silver Eagle Proof coins and colorized State Quarters. I do not understand why he likes the colored quarters, but that is his choice. He has a lot of questions that are not focused, so I will need to work with him to get him to better focus his understanding.
My older nephew is more intense than his younger sibling. He is more concerned with the worth and value of the coins than the history. I gave him a copy of Coinage magazine that I finished reading and the first section he looked at were the yellow price guide section! For this year’s birthday, he was given junior memberships to the ANA and FUN. My younger nephew was last seen staring at the Mint set and pre-Euro coins admiring their beauty. I will have to sit with each to figure out their numismatic interests in more detail.
It is fun talking with them, answering their many questions, and encouraging their interest in numismatics. While talking, I was told that they will be in New York in two weeks. So I offered to take them to the Philadelphia Branch Mint for the public tour if my work schedule permits. They would take the train to Philadelphia where I will pick them up at the station. They are hoping my work schedule will allow me to do this. They are also scheming to figure out how much money they can bring to buy souvenirs.
All it takes is a gift of coins to convert someone into a young numismatist. Give it a try and watch the hobby grow!
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