What's the Demand for Numismatic Art?
March 17, 2008
I owe thanks to the individuals who posted comments with my blog on Friday. It is great to receive helpful information and commentary from readers. Gold at $1,000 an ounce is an important milestone and it is important that people generally be aware of it.
One thing where gold at $1,000 an ounce will not be helpful is in the realm of a new Mint project to recreate the ultra-high-relief Saint-Gaudens gold $20 produced in 1907 at the U.S. Mint from dies bearing the famous design of Augustus Saint-Gaudens.
The coin proved so difficult to strike at the time that it was quickly abandoned for the high relief versions and mere commerce caused that design to be abandoned because bankers said they would not stack properly.
Assuming the Mint succeeds in the production challenges and the fact that the coins will never see commerce, that leaves the problem of projected price.
What will it cost the Mint to create the numismatic masterpiece? The base gold value if struck today would be $1,000 plus whatever the markup would be to cover the Mint's cost and add a little profit.
Basic American Eagle proofs are $1,200 from the Mint using a round number. How much more would this special coin be? $1,300, $1,400, or $1,500?
In that rarefied pricing area, there are not too many collector buyers, unless of course, they can turn them around and sell them on eBay before the credit card is debited and the coin is shipped. If it can be sold on eBay, great, it is a profit. If it can't be, it gets shipped back to the Mint within the 30-day return privilege.
Back to the basic question: what is the rock bottom collector demand for such a piece? I know that it is more than the 19 ulta-high-reliefs that the Mint press release notes exist from 1907. It is probably in the thousands of pieces, because a first-time issue frequently inspires more buyers than a second. But, using the $1,500 price for easy figuring, a mintage of 10,000 would generate the Mint $15 million in sales.
Could it go higher than that? What do you think?
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