Ultra High Relief Sales, Gold Coin Price Decrease
Is the demand for the US Mint's 2009 Ultra High Relief Double Eagle Gold Coin tapering off?
The latest sales figures indicate that 96,275 coins have been sold as of 9/27/2009. This represents sales of 1,811 coins for the preceding week. For the past several weeks before, the UHR Double Eagle had been selling more than 2,000 coins per week.
The prior week reporting period contained some changes that I thought would spur additional sales. The household ordering limit was completely removed on September 21, 2009, which opened the doors for any potential bulk buyers. The price for the coin was increased from $1,339 to $1,389 on September 23, 2009. Since the price increase was widely known in advance, any would-be buyers might have accelerated purchases to take advantage of the lower price. Despite these two factors, the pace of sales actually showed a decline from recent levels.
Incidentally, it seems that the gold coin price increase implemented last week will be very short lived. The average price of gold calculated from last Thursday London AM Fix to this Wednesday AM Fix is below the $1,000 level. Under the US Mint's numismatic gold coin pricing policy, the prices for coins will be adjusted downwards proportionally by $50 per ounce.
The price of the UHR Double Eagle should fall back to $1,339. The First Spouse Gold Coins should also be adjusted downward to $654 and $641 for proof and uncirculated coins, respectively. Recently, pricing changes have been implemented mid-morning on Wednesdays.
Labels: Ultra High Relief
posted by Mint News Blog @ 6:48 AM
8 Comments:
hmn... this is a surprise. Maybe dealers are getting cautious with the removal of household limits.
Just what happens if the mint has more inventory on hand than the widely expected 100K-130K (just can't keep buying to soak up the excess liquidity)
Would it be a wise move to wait and see before adding to one's UHR?
On the otherhand, other gold coins (buff and eagles) coming up later in the year are gonna be the real LOW mintage gold coins whereas if the Mint has more UHR than expected; sales of UHR may even continue in 2010
A gold coin with a mintage over 100,000 is not going to maintain a big premium. I think people are FINALLY starting to realize this.
Also, what if the removal of the household limit is not a sign that the mint is about to cease production soon? What if it's the exact opposite - they are opening the floodgates to mint the maximum of 300,000.
Didn't the UHR law REQUIRE the mint to produce these for 1 year, atleast? Or, was it optional - can the mint even stop producing these before 2009 is over? I haven't read the law, but I do wonder. If anyone knows, please post. This could have tremendous implications for the value of the UHR now and in the future.
Either way, as pointed out, even with no household limit, VERY FEW PEOPLE ARE WILLING TO PAY $1,389 FOR THIS COIN FROM THE MINT. Sounds like the dealers confidence in this coins value isn't as high as they claim.
The UHR was authorized directly by the Treasury of the Secretary, so there is no law to refer to. I don't know if the details of the authorization have been published somewhere.
The US Mint's initial press release announcing the authorization included this passage:
"The mintage of the new coin will be unlimited for one year. Only 2009-dated coins will be minted. The coins will go on sale in early 2009, although sales may continue into 2010 if inventory exists."
Not sure if this was stating the Mint's intentions, what they are authorized to do, or what they are required to do. This was also stated before the gold blank shortage situation really took hold.
If anyone follows gold closely, you knew that gold was extremely over bought and the dollar was oversold. Even the gold bugs were screaming this therefore I believe many big dealers are waiting for a slight downwards shift. My take is that we will see an ease back down to $940 - $960 levels and then go to the range of $1100 - $1200 by 1st quarter of 2010. I know some have suggested on this board that gold could drop to 800ish. If we have another "september 2008" scenario it might be possible due to big money trying to liquidate to meet margins but a lot of smart money is going after gold right now for the long run. Also, the general public is very slowly getting the notion that gold is an investment and a way to preserve their wealth. These coins are too beautiful not to buy and a great addition to any collection.
Well, at least the Mint was fair in the implementation of the price change, as they have indeed dropped the prices today instead of waiting until tomorrow.
Now I feel a little better about the way they were always raising the prices on Wednesday despite the fact that their policy said price changes would take effect on Thursday. At least this shows that it DOES work both ways.
Yeah I think everyone has had there fair share of these coins (who ever can afford them) and 100 to 120k is a moderatly low mintage and should defiently have some very high demand in 10 to 20 years from now if the world doesn't end by then lol..
Spiff
Wondering what happens to those returned UHR? Are they destroyed or sent out again?
There could be those who order UHR throughout the year and only keep the best ones and keep returning the imperfect one. Does the Mint differentiate the UHRs it sent out?
I do notice thou' that there are some proof-like versions and the normal business strike versions out there.
With the Mint making so many "special" coins in the last ten years I think people are finally getting tired of it. I have not bought anything from the Mint in over two years and I just focus my interests on older coins and older currency (which has become my favorite). Im my opinion, everything the Mint offers now is just to keep the TV shopping networks on the air with their MS69 and MS70 graded coins. Unsuspecting customers do not know that probably 99% of what the Mint puts out will grade at least a MS68with MS69 being the norm and therefore pay about double the standard price for investment purposes that these tv networks "do not promote."
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