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Over here. No. Over there.
December 07, 2009

If you have ever played with a small dog that loves to race around from spot to spot depending on where you are looking or going, you have a good sense of what the Mint looks like day to day as it tries to cope with serial bullion coin shortages.

What’s being offered today?

A new allocation of one-ounce bullion American Eagle coins.

Will there be enough?

Are you kidding?

And so it goes.

Bullion coin buyers and coin collectors who are following the spectacle like to tsk tsk this these ongoing shortages.

But there is another small dog racing around here. It is the bullion coin buyer who is also racing from spot to spot bidding up prices of the bullion coins on the secondary market to ridiculous percentages.

Forgotten by these buyers is that the unusual premiums that occur from time to time get zeroed out. Sometimes bullion coins even trade for a discount to bullion value.

To use round figures, imagine paying a 10 percent premium for a half ounce gold coin. At today’s gold price of $1,144, that works out to a gold price of $572 plus $57.20 to equal $629.20.

Gold has to reach $1,258.40 to give the coin a bullion value equal to what was paid with the 10 percent premium. That is quite a swing and quite a nut to have to cover before profits can begin.

Does it matter?

Well, just try telling a small dog how silly it looks and you will get the same result.


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Recent Comments
On December 7, 2009 Dave Brickley said
Folks were crying over the premium on the gold buffalo fractionals. Glad I did'nt pay attention.

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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