Mint News Blog

News, Information, and Commentary on US Mint Products

Thursday, May 27, 2010

Gold Coin Prices Will Not Be Reduced This Week


Yesterday, prices for the US Mint's available First Spouse Gold Coins should have been reduced in accordance with the pricing policy for numismatic gold and platinum coins. Prices were not adjusted lower and no adjustment will take place this week.

The full story is available on Coin Update News: US Mint Fails to Reduce Numismatic Gold Coin Prices in Opposition to Published Policy

The First Spouse Gold Coins, which are the only gold numismatic products currently available, are priced for an average price of gold in the $1,200 to $1,249.99 range. Since the calculated average for the period came in at $1,190.39, prices should have been reduced by $25 each.

For more than a year, the US Mint has diligently followed their pricing policy and repriced products higher or lower whenever necessary. On one occasion they even made a pricing adjustment when the average price landed exactly on one of the price thresholds.

On other occasions, prices have been adjusted higher or lower even though the price of gold at the time of adjustment had already moved into a different range than the calculated average.

The policy had a single calculation and precise ranges, leaving nothing to interpretation. This created a fair and nonarbitrary system for precious metals prices to guide product prices. It also allowed collectors to make purchasing decisions in anticipation of price changes. This seemed to match the purpose of establishing the new policy. As stated in the press release announcing the policy: "Transparency, agility, and customer service are the catalysts for our new pricing method."

By not following policy, particularly for a price decrease, the US Mint is setting a bad precedent and opening up a range of questions about their motivations.

On a separate matter (maybe), the US Mint has confirmed that both the Letitia Tyler and Julia Tyler coins will go off-sale to coincide with the start of sales for the Jane Pierce coin, still scheduled for June 3, 2010. The end of sales for Julia Tyler has the potential to create the first gold coin of the modern era with a mintage of less than 3,000.

As of the latest US Mint weekly sales report, the Julia Tyler First Spouse Gold Coin had sales of 4,812 proof coins and 2,807 uncirculated coins.

Update: The US Mint has issued a statement explaining additional criteria from an internal policy used for numismatic gold and platinum coin pricing.

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35 Comments:

At May 27, 2010 at 2:01 PM , Anonymous Anonymous said...

Obviously this is a business strategy and I can see why they did it. It is a smart move, bottom line wise, but it is a dirty move especially since there was a system in place and have been following it quite religiously since inception. To all of a sudden switch off this policy when the prices are at the highest levels is wrong to the customer. The demand for gold is still high in today's volatile market and I'm sure some coins will still be purchased even during this shady business strategy. If an explanation was given for not decreasing the price I might accept it a little more but just saying nope not gonna happen this week, that's bad business. To even come out and say to the coin collecting community that we are taking this opportunity to take advantage of the volatile market and high gold prices to increase profits. We will return to the normal gold pricing system next week. Saying something like that would show interest in growing and keeping in contact with the community on certain moves.

I wish I could sit in some of these business meetings these guys at the US Mint have. I have yet to see any move made this year, or prior year, that would make customers want to return. It's starting to sound as if the US Mint has drifted into a sustainability business model rather than a growth model. They will use current products and get the most out of them rather than create something new and take it to the next level to grab a new clientele or create something unique.

Sustainability works in certain industries and market. With consumers still being iffy on certain investments and spending this is a risky move for the US Mint and will prove to be a downfall for them this year. My prediction is to expect no Silver Eagles to further tarnish the US Mint's relationship with its older and more dedicated consumer base. Also, a definite change in the coin composition to further reduce costs on its products rather than creating new products.

 
At May 27, 2010 at 2:13 PM , Anonymous Anonymous said...

Somehow, I always KNEW the Mint would end sales of BOTH Tyler coins the day the Jane Pierce goes on sale, even though they will have been available for only 11 and 10 months, respectively. It just made sense to do so.

It stinks that the Mint broke their own rules and won't allow any last minute sales of the Tyler coins at the price level the average dictated they should be sold at this week.

I hope the mintage of Julia Tyler comes in under 3,000. A mintage that low would be unheard of these days. It would make the Uncirculated Jackie Robinson seem common by comparison!

 
At May 27, 2010 at 2:40 PM , Anonymous Anonymous said...

I can already hear the rapid key board clicks and the phone tones for orders to the mint for the Julia Tyler!

 
At May 27, 2010 at 3:34 PM , Anonymous Anonymous said...

Personally, I think the press got it all wrong regarding the oil spill in the gulf!

When the mighty 'o' was in front of reports saying "plug the !@#$ hole,", he was actually venting at Moy to quit playing games with the mint's precious metals pricing policies and stick it to us consumers. Obviously, Moy got the message. Oil had absolutely nothing to do with it...JMO.

 
At May 27, 2010 at 3:48 PM , Anonymous Anonymous said...

This is a bunch of crap! What's going to keep this from happening again in the future?

 
At May 27, 2010 at 4:18 PM , Anonymous Anonymous said...

Buy early or cry later...

The U.S. mint is both predictable and short sighted, they always do what they want to do when they want to do it. Collectors beware...

Stop your whining.

Goldfingers

 
At May 27, 2010 at 4:29 PM , Anonymous Anonymous said...

There is no business stragegy involved. This is a gooberment agency excercising raw power. Business means there is a competitor to go to if you don't like the one you have been doing business with. If you don't like McDonalds go to Burger King. Which competitive mint do you go to get a Julia Tyler coin if you don't like this mint? And eBay is not the competitor. eBay is aftermarket.

 
At May 27, 2010 at 4:33 PM , Anonymous Anonymous said...

"Stop your whining.

Goldfingers"

Isn't that what you're doing Goldfingers?

 
At May 27, 2010 at 5:40 PM , Anonymous VABEACHBUM said...

And I had remained hopeful that gold would continue the casual decline - and Mint prices would be reduced - just in time for the 2010 Gold Proof Buffalo. Sha!! As if!! Maybe Monkeys...

I think this "hold" by the Mint is indicative of a further revised version of their precious metal pricing structure in the very near future. Probably not to the advantage of the collectors, either.

Take a moment to read the fine print on the current schedule: base line of spot gold, percentage distributions, etc. If you use a median of 70% metal value when gold is $1100 per FTO, a 1 ounce Proof Buffalo should price out at $1572. So, the base line misses the mark by $162 per coin. The other aspect of the new schedule that got my attention is the fact that the distributions of costs account for only 98% of the product cost. The Margins are listed at 13% when this fixed portion is supposed to be 15%.

The current schedule was published because the price of world market gold had begun to exceed limits of the original schedule, i.e., $1,199.99 per ounce. What I discovered was that this revised schedule defined a new baseline and extended the range, but continued to use the EXACT schedule of prices found on the original. Highly improbable. More likely; the new schedule was thrown together out of necessity - and faster than the Mint could do the math.

The most disturbing part of this story is the fact that the Mint failed to adhere to its guidance as published in the Federal Register. Unless there is a legitimate emergency, or some urgent and compelling need, this inaction is a huge no-no worthy of discussion with your Congressman - or woman. The fact that the one person who manages the Mint website is on vacation this week might be considered sad, but not urgent and compelling.

Good Luck Everyone.

 
At May 27, 2010 at 7:05 PM , Anonymous Anonymous said...

VABEACHBUM,

I, too, was hoping to pick up the 2010 AGB a little cheaper; but alas, it is not to be. Another example of redistribution of wealth.

I've checked coin prices from other mints on their country's coins and they appear to have huge premiums as well. Perhaps the mint/moy is trying to bilk US collectors the same way that other countries bilk their collectors. All the while, the mint's quality and customer service is getting much worse.

Personally, I was trying to mix collecting with acquiring bullion (silver, etc.), but perhaps straight bullion is the answer based on the mint's methods of doing business.

 
At May 27, 2010 at 7:58 PM , Anonymous Anonymous said...

I have spent thousands at the mint over the last 3 years. This is pure BS, the government at work ignoring common decency, and of course the people. There is as much integrity and honesty at the mint as in DC. I have been busting my butt trying to keep up with both the unc set and the proof sets so I have a set to give both of my kids. Thanks for playing fairly. The mint is a lying sack of excrement!

 
At May 27, 2010 at 8:41 PM , Anonymous Anonymous said...

Well, I was planning on NOT posting something like "I told you so" a few times in former recent threads, but "I told you so".

The Mint is crumbling from within, and collectors/ customers will do without. Moy is inept and should check himself into rehab. His internal business committee is a joke. The Treasury Secretary is oblivious and a disconnected hack.

I bought hardly anything directly from the Mint last year, so far this years, and am forcasting zero purchases in the forseeable future. Not like the past 35+ years. The cancellation of Pres. $1 advertising materials was the start, then the cancellation of 2009 Silver and Gold eagles. The absurd pricing for common penny rolls. The 5 oz silver rounds planned for the Park's that no one wants. Recent news concerning Park'sets. The list is long, building, and growing. No one is aware, in charge, or seems to care. Now it's phoney dollar pricing for Gold. Fools and their hard earned money are soon parted. Pity. ~ Grandpa

 
At May 27, 2010 at 11:41 PM , Anonymous Anonymous said...

Well said grandpa. I totally agree with ya. If I had a vote you would be my choice mint director. I cannot think of any other business that is being run worse than the mint right now. It really don't matter what their consumers think. Before you know it the federal government will have bail out the mint. Lol.

 
At May 27, 2010 at 11:50 PM , Anonymous Anonymous said...

The mint is behaving like a gas station of all things, slow to lower prices but fast to raise them.

This is the new Obamanomics.

 
At May 28, 2010 at 4:21 AM , Anonymous Anonymous said...

Please.

 
At May 28, 2010 at 4:31 AM , Anonymous Anonymous said...

Mr. Moy,

"You lie!"

 
At May 28, 2010 at 5:32 AM , Anonymous Anonymous said...

The top for gold is in for this cycle, as the attitude of the US Mint attests. They will now be slow to lower prices all the way down to $900 per ounce. Buy your gold for platinum prices from your friendly bandits at the US Mint!!

 
At May 28, 2010 at 8:09 AM , Anonymous JA said...

The Mint should be reported to the BBB!

Publishing a policy then breaking it when it's most convenient is a violation of the public's trust.

So glad I've scaled down my purchases in 2010.

 
At May 28, 2010 at 11:19 AM , Anonymous Anonymous said...

I bought an Anna Harrison Unc coin a while back that had significant abrasions on the obverse. I exchanged the coin and they sent me back EXACTLY the same coin. I've had similarly poor luck when ordering other First Spouse coins months after the initial release.

It's obvious to me that the Mint simply restocks returned coins. That's why I always buy my coins from the Mint on the first day of issue...or not at all.

 
At May 28, 2010 at 4:31 PM , Anonymous Anonymous said...

It is hard for me to believe that people will pay such a premium over gold spot for the first spouse coins. I know that supply (mintage) is relatively low, but it does not guarantee future demand. When this series ends, these people will either be laughing all the way to the bank or joining a very exclusive support group.

 
At May 28, 2010 at 4:46 PM , Anonymous Anonymous said...

To the poster just above,

I guess the same could be said for anyone buying gold coins these days. The premiums are ridiculously high for all gold coins, and the US Mint is working hard to keep it that way.

 
At May 29, 2010 at 9:44 AM , Anonymous The Dude said...

Maybe the US Mint knows something we dont. IE: Gold is headed to record levels. $1,600 - $2,300 /oz. Still I agree not sticking to published pricing procedures is not good business practice. Can we report these dudes to the BBB?

 
At May 29, 2010 at 11:22 AM , Anonymous Anonymous said...

Congress just approved 700 billion defense budget. That means more $$ printing and perhaps more expensive Gold..

 
At May 29, 2010 at 2:47 PM , Anonymous Anonymous said...

I can't believe this, but I sent Mr. Moy a very nasty letter about the way his mint is disregarding their gold pricing policy and he sent me a note back saying he didn't understand my statement and that I should explain it a bit more. Geez....

 
At May 29, 2010 at 5:26 PM , Anonymous Anonymous said...

I agree...Geez, but you should write him back and explain it to him since he is already familar with you.

 
At May 29, 2010 at 5:42 PM , Anonymous Anonymous said...

Say hey to him, may be he should look at Canadian mint products.

 
At May 29, 2010 at 5:43 PM , Anonymous Anonymous said...

For those who like gold coins and want to get them on the cheap (relatively speaking) get the bullion. These are not collector coins as such but people do have them graded and sort of made into collector coins. Some bullion cos. sell the 1/2 gold eagle for around $40 over the spot value. No fractional eagles for 2010 yet, however. Buffalo bullion is only in 1 oz size and considerably less expensive than the proof version but then you don't get the pretty box either and the finish is not as pretty as a proof. Is the pretty finish and the nice box worth another 200 bucks? To some it is. The bullion coins go up or down in value with the price of the metal while the proof versions have the potential of going up at a higher rate depending on mintage and demand which is hard to predict. The key word on proof coins going up more than just the value of the metal is POTENTIAL and not a sure thing. As an example I do not believe the '09 buffalo proof coin has gone up only very little if any over its selling price but the mint only just quit producing them a few months ago.

 
At May 30, 2010 at 6:35 AM , Anonymous Anonymous said...

Michael,

I don't think it's fair or correct to say that the proof and uncirculated versions of the same coin should be counted separately in the overall production numbers.

Sure, there will be pros and cons on how numbers are counted. Any numbers can be manipulated in multiple ways to tell a story.

But when it comes down to it, the overall production number of the First Spouse gold coins will determine overall rarity....

 
At May 30, 2010 at 9:19 PM , Anonymous Alfred E Neuman said...

I am so upset about this. It's like the government has lied to me, has betrayed me. And if they lied to me about this, what else have they lied to me about? I am questioning everything now. What is true about the United States of America? Was any of it true? The world feels like it is upside down.

 
At May 31, 2010 at 10:25 AM , Anonymous Anonymous said...

Alfred E. Neuman -

Get over it. This won't be the last time.

Have you ever heard of people changing their minds?

 
At May 31, 2010 at 11:08 AM , Anonymous Anonymous said...

Despite the low mintages, there just is very little demand for these gold coins.

So even if 250 were minted, if no one wants them, then prices will continue to remain low.

Demand is higher for the low-mintage liberty gold coins. And the higher secondary market prices reflect this fact.

Low mintages aren't everything when it comes to determining secondary market values....

 
At May 31, 2010 at 12:06 PM , Anonymous Anonymous said...

Obama should just take over the price of gold like he has taken over everything else. Then he can set the price at $25 a ounce so we can all buy as much as we want.

 
At May 31, 2010 at 1:43 PM , Anonymous Anonymous said...

The last time a President set the price of gold was when Roosevelt set the price at $35/oz. That was right after he collected (confiscated) most of it from the citizenry at $20/oz back in 1933. I think they would now have to go through an international commission to arbitrarily set a price. Make no mistake if the gooberment sets the price higher it will be after the gooberments or at least our gooberment has collected (confiscated) it at a lower price. I don't look for that to happen for a while. The gooberment is more likely to try and gets its greedy little paws on private retirement accounts first. There is a boatload of money there in the trillions.

 
At June 1, 2010 at 2:14 PM , Anonymous Anonymous said...

The government already has control of IRAs and 401Ks because they own stocks (and even majority stakes in companies). See GM...Citi.... Threats against Goldman Sachs...BP. The party's over. Hold cash and gold.

 
At June 1, 2010 at 10:07 PM , Anonymous Anonymous said...

There is a rumor that another secret pricing factor may be the groundhog and his shadow. If the groundhog sees his shadow Geithner will flip a proof gold coin. Heads price goes up and tails it goes down. Vice versa if the ground hog doesn't see his shadow. One other supposed influence is what the mothership tells Geithner to do when he fails to wear his tinfoil hat. These are just rumors but it all makes perfect sense to me.

 

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