Can Mint Hold Line On Price?
September 14, 2011
Considering the wild fluctuations that have occurred in the price of silver bullion since the Mint introduced its “P” uncirculated collector versions of the 2010 America the Beautiful 5-ounce silver coins, it is nearly miraculous that all five coins, which were released at intervals since the first one in late April, had the same issue price of $279.95.
The 2011 collector versions go on sale next week on Sept. 22. Buyers are awaiting the news of what the issue price will be.
They are bracing for a possible price increase.
I hope the Mint can hold the line, at least initially and keep the price steady. At today’s $41 a troy ounce silver bullion price, the Mint still has a margin of almost $75 to cover its cost and kick in a profit.
That would give the five coins dated 2011 a fighting chance to sell in numbers similar to the 27,000 achieved by the first four 2010 coins.
Even now, the last of the 2010 collector coins is struggling to reach the 27,000 mark. It reached the 21,288 point Sept. 12, but that represents an increase of just 1,194 in the prior week.
That means it would take almost another five weeks to sell out. There is a rising risk that it won’t sell out.
This wouldn’t inspire buyers of the 2011 coins and might cause them to cut back their expectations.
A price hike on the 2011 coins might further accelerate this downward adjustment.
As most collectors know, there already is a first-year-of-issue demand surge phenomenon that often is followed by a large drop in interest for the second year of issue.
Just look at the gold First Spouse series to see how far numbers can fall after its initially popular introduction. A drop of two-thirds of demand would be indicated by this particular example.
Such a drop would put the 2011 collector ATB coins sales numbers at 9,000 each. That seems crazy on the low side at the moment, but even by holding the line on the issue price, the Mint is fighting its own history to keep sales up for this program.
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