Gold Coin Sales Resume: Mint Seeking New Profits?

After a long wait, the United States Mint resumed sales of its gold coins. They’re the same coins, but at higher prices. Will the public find them fair? Or shy away with sticker shock?

The Mint first suspended the American Eagle Gold Uncirculated coins on September 13. Later, the proof versions were pulled and finally the American Buffalo Gold proof coins.

As of late Monday afternoon, October 15, all gold coins are now back online and available for immediate purchase.

In a statement released announcing the return, the Mint said:

The United States Mint temporarily suspended sales of American Buffalo Gold Proof Coins and American Eagle Gold Proof and Uncirculated Coins due to significant increases in the price of gold. Gold has been trading near 28-year highs and is at its highest level since 1980. Over the last 30 days, the price of gold has risen more than 12 percent…

Numismatic News first scooped this story and you can read the entirety of the U.S. Mint’s statement in their news section.

What’s the new price tags?

American Eagle and Buffalo price comparison charts – pre and post US Mint suspension prices

Here are charts showing the old and new prices for each type of gold coin:

Interestingly, the price increases are dynamic per coin type, with the four-coin sets seeing the largest upward price shift.

American Eagle and Buffalo coin price adjustments compared to gold values

When the U.S. Mint first suspended the American Eagle Uncirculated gold coins back on September 13, the price per ounce of gold hit a high of $711.75. Yesterday, October 15, gold closed at $758.85. That’s an increase of 6.62%.

At first blush, you could suspect the Mint is speculating that gold will rise higher and they’re trying to protect their bottom line aggressively. Or, they’re trying to reap larger profits. Why?

Their new price adjustments for the American Eagle coins reflect higher percentage increases (on the low end, 10.93%, and on the high end, 16.97%) compared to that of gold between September 13, their suspension date, and October 15, when they re-opened sales.

However, if you chart gold prices from the time they started to sharply increase, through the suspensions and to the middle of October, the Mint is much closer to being inline with equality price adjustments.

Reference the 1-year Gold London Fix graph below. Notice the spike starting in early September. That’s likely the time the Mint used as the beginning reference point for adjusting gold coin prices.

1-Year Gold London Fix charted by Kitco.com

In the end, will the public continue to buy bullion coins from the US Mint?

With all things being nearly equal, the motivations to buy gold coins from the Mint should remain the same and not deterred by the new price increases.

However, the long term pulling of any product doesn’t sit well with anyone. And suspending and resuming sales due to bullion fluctuations – up or down – isn’t a long term solution.

Luckily for the Mint, they have no competitors – you can’t get new U.S. bullion coins elsewhere. If that wasn’t the case, the Mint’s slow response and final solution would clearly impact their sales figures.

It wouldn’t be a bad idea for US Mint to look at a policy change in how they sale bullion coins. Something that’s more reflective of the times and more inline with customer expectations and demands.

The 2007 American Eagle Platinum Uncirculated coin prices have not yet been set by the Mint. Those coins are still suspended from sale.

Previous CoinNews.net articles regarding U.S. Mint coin suspensions

If you’ve missed the prior CoinNews.net articles regarding gold values and coin suspensions, you can still read them now at:

• U.S. Mint Halts More Gold and New Platinum Coins Sales, published October 11, 2007
• Gold Nears Three-Decade Peak; U.S. Mint Gold Suspensions Continue, published October 1, 2007
• U.S. Mint Halts Gold Coin Sales, published September 13, 2007