Mint News Blog

News, Information, and Commentary on US Mint Products

Tuesday, January 6, 2009

US Mint Publishes New Pricing Policy for Gold & Platinum Numismatic Products

Today, the US Mint published notification of a new pricing policy for Gold and Platinum Numismatic products. This pricing policy will apply to collectible gold and platinum products that the US Mint sells directly to collectors. The new policy is drastic and much needed change that provides a greater level of predictability and transparency for the US Mint's customers.

The move seems to be in response to the incredibly volatile precious metals prices experienced during 2008. During the course of 2008, platinum was up more than 48% at its peak and down more than 50% at its low. Gold was up over 21% at its peak and down over 14% at its low. Amidst these fluctuations, the US Mint raised prices for platinum products once, suspend sales twice, and lowered prices twice. Gold products were available for sale at very high premiums for most of the year before being briefly suspended and resumed with lowered towards the end of the year.

The US Mint's pricing policy will allow them to adjust the prices of products on a weekly basis, when the average price of gold and platinum cross certain thresholds. The new pricing methodology will become effective January 12, 2009.

The notification also provides collectors with the price for the 2009 Ultra High Relief Gold Double Eagle. Provided the average price of gold remains between $850.00 - $899.99, the price will be $1,239.00.


I will have a follow up post tomorrow with some reactions and thoughts. For now here is the US Mint's notification and charts for pricing of Gold and Platinum coins (click on the charts for large size versions):

[Federal Register: January 6, 2009 (Volume 74, Number 3)]
[Notices]
[Page 493-496]

DEPARTMENT OF THE TREASURY

United States Mint


Notification of New Pricing Methodology for Numismatic Products
Containing Platinum and Gold Coins

SUMMARY: The United States Mint is implementing a new pricing methodology for its numismatic products containing platinum and gold coins to mitigate the effect that fluctuating gold and platinum commodity costs has on the pricing of these products. The new pricing methodology is based primarily on the London Fix weekly average (average of the London Fix prices covering the previous Thursday a.m. Fix through the Wednesday a.m. Fix) platinum and gold prices, which reflect the market value of the platinum and gold bullion that these products contain. As required by law, the prices of these products also must be sufficient to recover all other costs incurred by the United States Mint, such as the cost of minting, marketing, and distributing such products (including labor, materials, dies, use of machinery, and promotional and overhead expenses). This pricing methodology will allow the United States Mint to change the prices of these products as often as weekly so they better reflect the costs of platinum and gold on the open markets.

DATES: The new pricing methodology, as further explained in the SUPPLEMENTARY INFORMATION section, will go into effect on January 12, 2008.

SUPPLEMENTARY INFORMATION: Pursuant to the authority that 31 U.S.C. 5111(a)(3), 5112(i), 5112(k), 5112(o), and 5112(q) grant the Secretary of the Treasury to mint and issue gold and platinum coins and to prepare and distribute numismatic items, the United States Mint sells to the public numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin. In accordance with 31 U.S.C. 9701 31 U.S.C. 9701(b)(2)(B), the United States Mint is changing the prices of these coins to reflect a new methodology in pricing.

Effective January 12, 2009, the United States Mint will commence selling numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin at prices established by using the new pricing methodology. Specifically, each Wednesday, the United States Mint will apply the average London Fix for platinum and gold (average of the London Fix prices covering the previous Thursday A.M. Fix through the Wednesday A.M. Fix) to the below pricing schedules. Price adjustments as a result of this process, if any, will be effective at 10 a.m. E.S.T. on the immediately following Thursday.
Price Chart for Gold Numismatic Products (click to enlarge)


Price Chart for Platinum Numismatic Products (click to enlarge)

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13 Comments:

At January 6, 2009 at 3:49 PM , Anonymous Sev said...

Looks like the Mint just sold out of the Gold W eagles today and the prices are going apeshit on Ebay! I'm SOOOO glad I got some!!

 
At January 6, 2009 at 5:18 PM , Blogger astroguy said...

Well, I'm glad we know. I'm not thrilled with the 50% markup on the UHR eagle (assuming gold is $850-899), but, at least we actually know what to expect.

I would prefer that they just do a regular standard % markup instead of $50 tiers (like if gold is $850 then the St. Gaudens is 51% over spot, but if it's $899.99 then it's only 43% over spot), but, this is a HUGE improvement over what we've had.

 
At January 6, 2009 at 5:24 PM , Blogger astroguy said...

Okay, I did the math slightly wrong before, was reading the wrong line because someone forgot to merge cells in the Excel spreadsheet. It's a 38-46% mark-up.

 
At January 7, 2009 at 7:16 AM , Blogger Scott said...

The premiums are phenomenal! Premiums over 33-percent is near price gouging! Does it really cost the Mint over $300 to produce the Buffalo gold coin?

 
At January 7, 2009 at 7:19 AM , Blogger Michael said...

They state their cost to manufacture including overhead is 11% to 19% plus a 15% margin.

At first glance, the prices seem high, but I looked back at the 2008 releases and the pricing fits into the chart based on the precious metals prices when the products were released.

 
At January 7, 2009 at 12:01 PM , Blogger limalo said...

I'm a little bit confused about something concerning the American Buffalo gold 1 ounce coin and the Celebration coin. The Celebration coin seems to be a 1 ounce American Buffalo gold coin in a different package. They are both one ounce of gold and both have a buffalo on them, yet the Celebration coin always seems to be priced slightly lower than the American buffalo gold uncirculated coin. What is the difference between the two coins and why aren't they the same price? Thanks for any light you can shed on this question.

 
At January 7, 2009 at 1:10 PM , Blogger coinspeak said...

What about Silver?

 
At January 7, 2009 at 1:16 PM , Blogger coinspeak said...

The Celebration Buffalo has no "W" mintmark.
The coin is in a plastic sealed wrap from the US Treasury. I believe it is a bullion coin and not a collectible version. Perhaps it could be qualified as a collectible if it is in the Celebration box.
It seems the US Mint was not clear in its description of the coin but if you read it you will note no mention of the "W" mintmark.I hope this is helpful.

 
At January 7, 2009 at 1:17 PM , Blogger Michael said...

Limalo-

The 2008 Buffalo Celebration coin is the bullion version of the coin in special "lucky" red packaging. The coin is identical to the coins that can be purchased from bullion dealers. This coin has a mintage above 100,000.

The US Mint sold a one-ounce 2008-W Uncirculated Gold Buffalo coin. They refer to this coin as a "collectible version" of the bullion coin. It can be differentiated by the "W" mint mark on the obverse. This coin has a mintage below 20,000.

 
At January 7, 2009 at 1:20 PM , Blogger Michael said...

No mention of silver.

Presumably, it might be handled under the old system. i.e. if the price rises enough, suspend sales until a new level can be established via publication in the Federal Register.

 
At January 8, 2009 at 7:26 AM , Blogger limalo said...

Michael and Coinspeak,

Thank you for your informative and helpful responses concerning the Buffalo coin versus the Celebratio Buffalo coin. I appreciate your help. Take care.

L

 
At January 10, 2009 at 7:33 PM , Anonymous Scott said...

These prices are outrageous and a huge contributing factor to the low sales figures for 2008 Proof Gold coins. If the mint continues to price-gouge collectors sales will just continue to decline.

 
At January 13, 2009 at 9:09 AM , Anonymous Anonymous said...

I agree with many. Premiums are way too high unless spot prices shoot up. If they go down, fewer will be buying until they think their might be a super low mintage creating a higher numismatic premium.

Prior week avg spot is fine for the benchmark but the premium should be more reasonable and set as a % of that spot for some the the lower price ranges.

I wonder why they are providing prices for Platinum Eagle PROOF "W" fractionals, the Platinum Eagle UNC "W" of any denomination, and the 10th anniversary set considering they are supposed to be sold out of the 2007 10th anniversary set and all 2008 "W" mintmark PAEs and only minting the 1 ounce PROOF for 2009 as noted here:

http://mintnewsblog.blogspot.com/2008/11/thoughts-on-us-mint-product.html

Perhaps this is the new "long-term" strategy going forward and they wanted to cover all bases. Maybe this is just in case any 2008s (or 10th anniv. sets) unexpectedly turn up in inventory.

It makes me wonder if we will see 2008 Platinum Eagles for sales again from the mint. If it is for anything but the "found" items in inventory, that would be very unfair to the people (especially individual "collectors") that ordered 4 to 7+ weeks ago only to see their orders cancelled.

 

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