Mint News Blog

News, Information, and Commentary on US Mint Products

Friday, October 19, 2007

Are this year's burnished Gold & Silver Eagles a good investment?

A few of the big winners from last year's US Mint products were the "burnished" Gold and Silver Eagle coins. These coins were offered exclusively by the mint and bore the "W" mint mark. They were branded as a collectible version of the popular bullion coins.

These coins were perhaps overlooked by most collectors and as a result, had shockingly low mintages. On the secondary market, the Silver Eagles showed the greatest percentage price appreciation, selling for many multiples of the original $20 offering price.

The price increase was caused by the low mintage and high secondary market demand. I think that when the coins were offered, they were generally overlooked or misunderstood by collectors. Unless you looked at the fine print, the coins may have just seemed like regular bullion coins. Also, around the same time, the 20th Anniversary Eagle sets were on sale and taking up most of the attention.

After the US Mint stopped selling the coins, collectors realized that these were distinct from the bullion version, most notably because of the "W" mintmark. Also the final mintages for several of the coins were quite low considering the popularity of Gold and Silver Eagles series. So the story went- low supply, high demand, prices increased very quickly.

Back to the initial question- will the same thing happen this year? One would think that the answer would be an unfortunate "no." However, there is some evidence to the contrary.

On one hand, because the coins have an open ended mintage, production will keep going until collector's have had their fill. And after watching prices escalate last year, you can be sure that collectors have already ordered early and heavily. Putting these factors back into the equation- high supply, low secondary market demand, prices won't escalate dramatically.

On the other hand, some mintage figures for this year are still far below the figures from last year. Here is a comparison of the final mintage figures from last year compared to year to date figures for this year. Last year figures are from an article in Coin World. This year's figures are from Numismatic News. Note: 2007 gold figures include the impact of 4 coin sets. 2006 figures include the impact of 20th Anniversary Sets and 4 coins sets.

2006-W 2007-W
1 oz gold 49,975 11,614
1/2 oz gold 18,850 8,085
1/4 oz gold 19,925 9,151
1/10 oz gold 25,650 18,555
1 oz silver 496,200 504,927

So what is the verdict? We will have to wait until next year to find out, but right now I would tip my hat in favor of the 1/2 oz and 1/4 oz gold coins.

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