Gold collectors need to be picky

With the end of the year approaching, collectors are starting to focus eagle eyes on Mint products that will go off sale during the month of December.

Are any of them worth buying because of low mintages?

I have had several emails from readers expressing a high level of interest in the First Spouse gold coins that are currently being offered.

There is no question that mintages are low, low, low.

What is in doubt is whether there are enough collectors committed to this expensive series to balance the supply.

For the most part, few people can afford to buy a series of half-ounce gold coins.

There are 78 First Spouse gold coins in a set, 39 proofs and 39 uncirculateds.

That is 39 ounces of gold.

Melt value is $50,310 with gold trading at $1,290 an ounce.

If you want to buy the coins that are still being offered by the Mint, you will have to pay $820 for an uncirculated and $840 for a proof.

That is $1,660, which is nearly a 29 percent markup from melt value.

Definitely, this is not a set of coins put together from the spare cash in your cookie jar.

It is a serious commitment.

But collectors are nothing if not serious.

There are serious collectors of First Spouse coins.

They will note that the uncirculated Pat Nixon coin has a current sales figure of 1,703 pieces.

With an issue price of $820, the would-be buyer has to wonder if there are future buyers out there for 1,703 coins who will at least pay current issue price.

As you know, many issues fall to melt value after they have been off sale for a while.

APMEX, the big online bullion seller, has an offer of First Spouse coins for just $19.99 per coin over spot gold (melt value).

When I checked, you could get one for $663.24. This is $156.76 below current issue price.

Admittedly, the First Spouse gold coins you can buy at this price are the first issues, which had mintages of about 20,000 for proofs and uncirculateds.

The Pat Nixon coin has a mintage of less than 9 percent of that. That should make it more valuable.

The $663.24 coins are also unslabbed and not in a -70 grade.

But APMEX does offer coins graded Proof-70 or MS-70 for just $728.04 – a price that is still below the current $820 issue price.

There are some scarcer dates. A Proof-70 Ultra Cameo Early Release Alice Paul design is $1,199.95. Mintage of that issue was 3,505. This is a high grade bar to jump over.

This coin is $359.95 more than the current $840 proof issue price, a gain of 43 percent.

Unfortunately, you can’t get these last Pat Nixon coins slabbed as Early Releases. But the -70 grade can still be achieved.

APMEX helpfully notes that there are 317 Alice Paul coins that made this pinnacle grade. How many of the 1,703 Pat Nixon coins can make a top grade is what will drive would-be buyers to try to figure out.

But that is the definition of a collector.

We all try to figure out how scarce something is in top grades.

The difference among ourselves is our specific interests and our budgets.

Good luck to those gold collectors who are trying to make this call as 2017 comes to a close.

It isn’t easy.

But it wouldn’t be worth the effort if it was easy.

Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper “Numismatic News.”

• Like this blog? Read more by subscribing to Numismatic News

The post Gold collectors need to be picky appeared first on Numismatic News.