US Mint's First 2009 Re-Pricing
This morning, the US Mint adjusted pricing for its remaining gold products under their new pricing policy.
The prices for all coins (except the 1/10 oz) showed some big increases. For example, the 1 oz. 2008-W Unc Gold Eagle was increased from $974.95 to $1,128.00, a jump of $153.05.
Ironically, the price increases come amidst a sharp decrease in the price of gold.
http://mintnewsblog.blogspot.com/2009/01/first-2009-us-mint-re-pric...
The prices for all coins (except the 1/10 oz) showed some big increases. For example, the 1 oz. 2008-W Unc Gold Eagle was increased from $974.95 to $1,128.00, a jump of $153.05.
Ironically, the price increases come amidst a sharp decrease in the price of gold.
http://mintnewsblog.blogspot.com/2009/01/first-2009-us-mint-re-pric...
Tags: usmint
Views: 11
Replies to This Discussion
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Permalink Reply by mqracing on -
Long term I wonder if this new policy won't hurt the mint more than help it. Now there is a lot more incentive for folks to wait out the market and wait for commodity prices to drop. Pricing your product on a weekly basis is an invitation for the consumer to not buy--- and especially when the pricing is volatile.
Seeing gold drop today--- if I had been thinking about buying say a gold eagle--- I wouldn't move today at all--- I'd wait to see what the next price adjustment was that the mint makes in response to the spot price moving around.
The other thing I wonder about is--- is the mint not insulated from daily movements in the price of precious metals? Usually a large organization\business will negotiate with suppliers on a LONG term basis and make a commitment to buy X pounds of goods at price Y over a predefined period of time---
analagous to the way that you can before the heating season begins tie in a price with your local oil company to freeze the price of oil at a specific price. So that even if the price of oil triples your contractually locked in at an earlier price. The oil company\oil distributor to protect themselves will frequently purchase an insurance policy that if the cost to them goes up that they are covered.
Big producers depend on these long term contracts to sell capacity and to make planning moreso efficient. Otherwise when the price of copper goes up spot buyers of magnet wire will stall their purchases--- and then when the price goes down the manufacturer of this magnet wire gets hammered with too many orders--- so it's in their interest to forge long term purchase contracts.
It'll be interesting to see how this new pricing model works for or against the mint over time.
But I just got a daily email spot price announcement in the mail about ten minutes ago showing gold at (was it) $831.
So except for a special coin that I just had to have if I wanted to live till tomorrow--- if I were buying gold it wouldn't be from the mint this week.
MSL
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Permalink Reply by coinnetwork on -
Those are some good thoughts on the subject. I'm planning to do a full post examining some of the implications of the new pricing policy. The US Mint was trying to solve one problem, but may have created a host of new ones.
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Permalink Reply by CraigL on
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I don't think this is going to work out for the mint at all. Everyone will be trying to buy low. I would also be very upset if I was a collector who would buy a set of coins when they first come out on the market every year and find out if I had just waited 2 or 3 weeks I would have gotten a better deal. They are going to have problems with this.
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Permalink Reply by Steve on -
I think people are over reacting. At least we have a chart to go by and know what the prices will be. But this is gonna work both ways. If you are planning on buying the Ultra High Relief Gold coin on January 22, well, now the issue price will be $1189 instead of of $1239. But nobody knows what prices may be six months from now. If gold shoots up $150 one week, people will be scrambling to put there orders in at the Mint before the next price change. But in a way, this is a piece of cake compared to buying and selling stocks. What if you held on to a stock one day too long and it went down 50% in one day (like many have). Well somebody is very upset while someone else may see an opportunity to buy. But HINDSIGHT is ALWAYS 20-20. We will make decsions that will make us let look like a genious one day and a fool the next. Bottom line of what I'm trying to say, is you have to look at the big picture (long term) on things...the daily/weekly/monthly ups and downs of prices will drive you crazy if you try to "Time" the market.
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Permalink Reply by Winston on
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For some , coins will be out of the question for a while. Others will invest in gold, who are working and have interest and knowledge. Some will buy bullion rather then watch the currency markets.
Seems like bullion is what the mint is betting on. They have reduced 60% of their product line , and it is infered that the consumer said there were to many products. Much easier to make a profit with a shorter product line for collectors, and address the want for bullion at one time.
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Permalink Reply by coinnetwork on
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I just posted a lengthy reaction to the new pricing policy on Mint News Blog. I cited ideas voiced here and via blog comments, as well as my own thoughts. I also put together some data regarding historical price premiums which is somewhat revealing.
http://mintnewsblog.blogspot.com/2009/01/reactions-to-us-mints-new-...
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Permalink Reply by John W on -
I would just add this: If one wishes to speculate outright on gold, silver or platinum, there are ETFs available with bid/ask spreads much, much tighter than bullion. If you buy $5,000 worth of gold ETF (GLD, for example) you would probably pay a commission of a $10 bucks or whatever. If you buy five 1 ounce gold coins, the bid/ask could be $300 or more for the five coins. I'm relatively new at coin collecting and was surprised to see a local coin shop paying $815 for 1 ounce gold coins (20 from one customer) and then offering them to me the next day for $915. Gold was, more or less, unchanged over that time period. I think the coins were Kangaroos?
So while I'm probably not telling anyone on here anything that they didn't already know, there is no harm in pointing out that speculation is probably much easier and cheaper with an ETF. I know (now!) that holding the gold is a fantastic feeling. I have my first 1 ounce gold and silver Eagles on my desk in front of me and it is very, very cool.
Am I off course here?
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Permalink Reply by Steve on
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I just checked the Mint website (Thursday 1/14, 1pm) and ALL the products that were adjusted with new prices now show "product not available. I assume this is because the prices will be adjusted again tomorrow (lower this time). It seems like if prices are adjusted each week, they could do it late Wednesday night, early Thursday. But, for future reference, this gives you an idea of when the Mint suspends products while they change the prices.
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Permalink Reply by coinnetwork on
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Steve said:I just checked the Mint website (Thursday 1/14, 1pm) and ALL the products that were adjusted with new prices now show "product not available. I assume this is because the prices will be adjusted again tomorrow (lower this time). It seems like if prices are adjusted each week, they could do it late Wednesday night, early Thursday. But, for future reference, this gives you an idea of when the Mint suspends products while they change the prices.
I also thought the price changes would take place more quickly. Based on their guidance, the new prices should become effective 10 AM EST tomorrow.
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Permalink Reply by FiremanDev on -
It's a shame, really, that the Mint can't seem to operate as some bullion dealers operate. Price adjustments, at least at those dealers that I frequent, are made on a daily basis. If the small coin dealers were to remove their products from the display cases in order to 're-price' their items the way that the Mint does, they'd be out of business. Who in their right mind would frequent a place that did business in this fashion?
I can appreciate the Mint trying to keep their bullion prices 'reasonable' and making an attempt at being 'flexible', but this pricing game plan of theirs is too convoluted and seems destined to fail.
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