Director Moy apparently has confidence in 5-oz quarter bullion coins

Mint director Moy is not only planning to strike the 5-oz America the Beautiful quarters this fall, but also is seeking to strike proof and other finishes for collectors. It seems to me that he has confidence that these will sell well. Of course, they're only going to dealers and directly to the public, so I expect the initial price to be well above bullion.

All this while still not offering the silver Eagle proofs because he says that they need to meet the demand for Eagle bullion coins first. It seems like they could meet that demand if they didn't spend so much time on these 5-oz versions.

Here's a story on this subject:

http://www.silvercoinstoday.com/2010-america-the-beautiful-silver-bullion-coins-set-for-fall/102700/

How many of you are planning to buy these? Will these be a hit or a dud?

I don't plan to buy any. I expect the prices to start high and move lower later. And us small collectors still need to buy these from dealers.... why not a direct path to collectors, especially for any collector versions? If he offered collector versions directly, I might buy one. That possibility is on the table.


Steve

 

Log in or Sign up to hide this ad.

I'd be interested for a price south of $100.

 

(Currently) impossible with spot ask price right now at $18.31/oz. Most bullion ASEs go for $2+ over spot. This is the Mint you are talking about, they are going to levy a significant premium to make up for all the production issues they claimed prolonged this series release plus to make their enormous profit off the backs of collectors.

 

While I expect the price to be over $100, I'm not interested in them at that price. I'll wait for the aftermarket to find a reasonable price after the initial overinflated demand and hype go away, probably several years down the road.

 

That's one way to approach it but silver spot may not drop below current levels or numismatic premiums may remain high for these coins, your best opportunity to own them and in the grade you like, may be upon release. I don't think waiting for them to become available for less than $100 per coin is prudent if you are even remotely interested, especially in a new series. I feel that if they are released in the numbers being floated, demand will be high and current spot prices and metals hype are going to fuel that demand.

 

I just disagree. There are too many products from the mint these days to support the initial prices in the long term, even at low mintages. Artificially produced rarities have a very short half-life.

 

Not enough of the new products are available in bullion composition in a lower budget range. No Proof ASEs, no Burnished ASEs last year, nor yet this year... only silver proof sets and a couple of high mintage commems this and last year to speak of... a 5 oz silver coin from the US mint that is less than the current gold offereings (also note we have no fractional collector version gold Eagles and until next year there hasn't been any $5 gold commems since 2008 released, gold commems being a lower priced item)... demand from US collectors for the 5 oz silver coin is almost assuredly going to be high, even with a Mint mark up, but also due to the lower mintage 100k(?) per design and the current media discussion building about the coins release (this is marketing for the coin). Don't forget Foreign interest in this coin as well. Mexican 5 oz. Libertads sell at a significant mark up above spot price and are regularly sold out / difficult to obtain. Price will not be a deterrent to this coin, if they manage to release them!

 

When the bottom drops out of silver, the bullion value will be a fraction of their initial cost. However, due to low sales/mintages, the numismatic value could be through the roof. At least that's what my crystal ball shows.

 

As you know, no one can say what will happen to the metals market. Your guess is as good as anyone elses guess might be, although I do not think we will see silver below $15/oz. and I also agree with you about the numismatic premium even though I would normally suggest 100k per design was too high to effect this aspect of valuing the coin.

 

100,000 for circulating coins is rare. 100,000 for artificial specialized market products are not. After the 'Investors' and 'Speculators' start trying to realize their profit by selling, they will usually discover the actual collecting market will not support the initial premiums. Just look at your price guide at all the proof sets selling below their issue price and realize most of them were only one of two products available from the mint.

Now there are nearly 100 different mint products dividing the same basic market and more new issues than one can keep up with. How could any of these modern collectors afford to even think about filling in back sets that they are missing? Demand falls further! The premium will exist only for a short time for MOST Mint coins. After an initial surge in prices caused by a very few well healed collectors seeking registry coins and those filling the last hole before their friends, the demand falls sharply. Then a gradual trend of falling prices as people who don't initially sell coins at a loss begin to figure out that the prices will keep falling rather than recovering and add their unwanted supply to the falling market until the market stabilizes between 5 and 10 years after they are issued.

Now there are always exceptions, usually concerning errors which are a gamble in the first place. But ask anyone who has been around though this cycle repeatedly if this is not true?

 

I've been around the Mint cycle you mention for a few decades and I normally echo the same sentiment that you are, cautioning about demand, etc. My initial point to you was not to expect a price point below $100. My personal thoughts on the direction of silver informs me to acquire these coins now due to intrinsic value of the metal poised to rise, just my opinion. The big exceptions with the, yet to be released, 5 oz silver coins are: the coin's silver composition (it will always have that intrinsic value) and this is the first 5 oz. coin (series) from the Mint, a coin like none of the other 100 or so (re)current products. It may be the only 5 oz. coins series ever or mintages may drop if collector interest wanes, like with the FS coins and their high price point due to POG currently. If released, these may be something special and not every collector will be able to have one (or all) like they can most of the 100+ other products.

 

A Little Research

You know, I've made a statement based on my recollection of the market. There's no need for this when I have a handy source for research at hand.

I have the 1991, 2000 and 2010 redbooks right here with all the information necessary to test my hypothesis based on my recollection. I will post and edit until I have a final product and then I will repost it in it's entirety.

Year...Mint(s)..Issue................Quantity.....Issue Price..Face...1991 Value..2000 Value..2010 Value
1936..P..........Proof................3,837.........$1.89.........$$5100..........
1937..P..........Proof................5,542.........$1.89.........$3600
1938..P..........Proof................8,045.........$1.89.........$1900
1939..P..........Proof................8,795.........$1.89.........$1650
1940..P..........Proof...............11,246.........$1.89.........$1450
1941..P..........Proof...............15,287.........$1.89.........$1300
1942..P..........Proof.2 Nickels..21,120.........$1.89.........$1500
1942..P..........Proof.1 Nickel....(above)........$1.89.........$1300
1947..PDS......Mint Set............(?)..............$4.87
1948..P..........Mint Set.............5,542.........$1.89

 

I know that you are pointing to this a peculiar issue and there are bound to be a few which buck the trend. I just disagree with the part of your belief that there will be a significant numismatic premium if the bullion value plummets.

 

Time will tell and may prove us both correct then wrong, then correct... it's the nature of the collecting market. :smile

 

You never know, depends on how low the mintage is. The popular belief that silver is way over priced, could cause many to shy away from these coins, creating real numismatic rarities. Of course silver sales are hotter than ever, so mintages could be high. Look at some of the rarities in the modern commem series.

 

I expect the demand to be high with the bullion issues, but I'm not so sure about the numismatic issues. The Mint has never really produced anything like this before. After the initial hype, how sustainable are these 5-0z issues? That's what I want to see.

Let's see if they can even make them right. So far, tests have been OK.

 

My crystal ball is broken this week, but my idiot guess would be if they sell out to see them fall in value in the future. I would be interested in them if demand was weak and they only sold 20,000. That would be a good investment in my eyes, assuming silver stay the same.

I cannot agree that these will always have a huge numismatic premium if they produce 100,000. 5 ounces is a lot of silver, and if they are commonish, I would think the value would always start at bullion and negotiate up.

 

500,000 America the Beautiful 5 oz Silver Bullion Coins for 2010 from CoinNews.net 8/12/10

Proof 5 ouncers? by Dave Harper from Numismatic News 8/16/10

 

What would be the difference between uncirculated and bullion? A matte finish?

 

If they release three versions, it would be something like the ASEs most likely:

1) bullion - no mintmark sold through the bullion dealer network (not sold by the Mint to the public)

2) uncirculated with mintmark (maybe W - west point) sold through the Mint catalog/website

3) Proof with mintmark (maybe W - west point) sold through the Mint catalog/website