Raging gold prices are disrupting United States Mint gold coin sales. The bureau on Friday stopped selling commemorative gold coins just three days after a similar suspension was implemented throughout collector pieces, including the American Gold Eagles, American Gold Buffalo and each of the First Spouse Gold Coins. The suspensions came as melt values of the coins raced toward their retail prices.
"The United States Mint has suspended sales of commemorative gold coins for re-pricing," the bureau said in a statement. "Due to the current market volatility, we will be placing these coins on a ‘pricing grid’ similar to the structure we use to price American Eagle, American Buffalo and First Spouse gold coins. A new grid specific to these coins is being developed and will be posted when complete."
The pricing grid referred to in the Mint’s suspension statement was put in place for collector gold coins back in 2009. It is a predefined listing of gold coin prices which are selected based on a weekly average of London gold fixings. (See PDF of Mint pricing grid.) There were no commemorative gold coins authorized by Congress in either 2009 or 2010, which is likely one reason the pricing system currently does not include them.
Four Coins Suspended
Commemorative Coin Melt Values Near Sale Prices
Until the suspensions, the proofs were each listed at a price of $454.95 while uncirculated coins were priced at $444.95. The coins each weigh 8.359 grams and have a composition of 90 percent gold, which calculates to 0.2419 troy ounces of gold per coin.
Gold prices have been extremely volatile of late. At the most recent London Fix PM price of gold on Friday of $1,736.00 an ounce, the intrinsic or melt value for each commemorative is $419.89. London gold reached as high as $1,786 an ounce on Thursday, which would have placed the melt value of the gold coins at $431.99 each. The metal in New York futures Thursday shot as high as $1,817.60 an ounce. At that price, the coins’ melt values would have been as high as $439.63 — just a few dollars away from their sale prices.
From a buyer’s perspective the commemorative gold coins have appeared, at least minimally, less expensive. The latest U.S. Mint sales figures highlight that fact as their sales pace jumped sharply.
Mandated $35 Surcharges for Commemorative Gold Coins
U.S. commemorative coins are authorized as a result of congressionally introduced legislation signed into law by the President. The coins honor a person, place, event or institution and are sold for one calendar year. Commemoratives carry a larger premium than other United States Mint collector products as they also include surcharges which are paid to organizations and projects that benefit the community — the Mint has raised $418 million since 1982. Each of this year’s commemorative gold coins includes a $35 surcharge when sold.
Melt Values + Surcharges = Suspension
When adding up the melt values and surcharges, the Mint was selling the coins for less than what it would cost to produce new ones. Thus, and while later than some were thinking, the sales suspensions were implemented.