Tuesday, August 27, 2013

Don't Pay Too Much For 2014 Perth Mint Lunar Year Of The Horse Silver 1oz Coins

I wrote in a recent article on lunar coins ("Lunar Horse Coins Are Bolting Out Of The Stable"):
Of the lunar coins we can expect released over the next 12 months, it’s my opinion that the 1oz silver bullion lunar coin from Perth Mint is the best coin to purchase for those seeking a financial return (for investment). They have a low maximum mintage, an aesthetically pleasing design, a quality finish, are individually capsuled for protection, come with legal tender status from world renowned Perth Mint, are priced as bullion coins on release and are sought after by coin investors and collectors all over the world. If you expect the price of silver to continue appreciating over the long term, then they are a great option for exposure to the spot price, but come with the potential for a numismatic premium once sold out at the Perth Mint.
Although I think the 1oz bullion coin from Perth Mint is the best lunar coin to purchase (for future increase in value), I only think it's only worth buying if you pay a reasonable premium today. As it stands the standard A$10 premium on Perth Mint 1 ounce bullion coins (from the mint, there are volume breaks) is higher than many other mints and 37% premium to spot price (A$26.75). However, a lower premium circa $5-7 is usually possible given dealer discounts.

Most Perth Mint distributors have decided to increase the premium they charge customers on the 1oz mintage limited horse simply because the demand is there. In Australia thats resulted in a $11 (41%) premium ($1 over maximum Perth Mint premium direct, $4-6 over the usual premium they might charge on 1 ounce coins), with Gold Stackers being an exception

US dealers such as APMEX & Gainesville have come out with prices around US$38-40 for the 1oz bullion lunar horse coin... at current spot price (US$24.20) that's around a 57-65% premium. In my opinion that's pushing the boundaries on what constitutes a fair price and what an investor should pay for a coin that is yet to even be officially released by Perth Mint (and where it's not yet sold out).

When released the 2012 1oz bullion dragon coin shot up to $100+ on the secondary market for a brief period of time, but then pulled right back and now sells for around $40-50. 

Don't pay too much for 2014 Perth Mint Lunar Year Of The Horse Silver 1oz Coins! You may be better off buying other sizes such as the 2oz, 5oz or 10oz coins (available to preorder now via Bullion Money) or wait for the Perth Mint to open up sales of the 1oz coin via their bullion website (Perth Mint Bullion), but I don't expect they will last more than a day or two there.

For more lunar coin coverage, see the below articles:

Royal Canadian Mint Parades 2014 Lunar Horse Coin Range

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Bullion Baron.
The Perth Mint Australia


Agreed that the US distributors charge unreasonable premiums on Perth Mint coins, often well in excess of the price directly from the mint. Many distributors are listed in the US but the two mentioned are the only two who regularly carry the one and ten kilo silver lunar coins, so there's not much competition.

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