Monday, September 2, 2013

Perth Mint 2014 Silver Lunar Horse Proof Coins - Baron's Picks: Three-Coin Set & 1oz Proof

Last year I wrote a post on the blog about coin collecting vs coin speculating:

"...a coin collector is someone who purchases the coins for the personal enjoyment of the coins themselves. They buy the coins not to flip them at a higher price in a short period of time (although purchasing below their market value might still be a goal of the collector), but to hold them for longer term increases in value and to enjoy inspecting them as well as sharing their finds and sets with others..."

On that note this post is not about coin collecting, but rather about coin speculation:

"...a speculator in the Silver coin market might be someone who buys modern bullion releases at a higher premium than normal to spot with the expectation the premium will increase over time (due to the coins rarity), it might be someone who buys a large number of new release numismatic coins to try and corner the market, it might be someone who looks for key dates in sets (those with the lowest mintage) to speculate that collector demand for these will increase with time. A speculator is someone who is buying the coins with the intention of profit rather than personal enjoyment..."

Last year I also wrote an article which looked at the longer term price appreciation of Perth Mint proof vs bullion lunar coins and came to the following conclusion:

"...the results, while varied, show that the bullion Silver Lunars have performed much better than the spot increase and much better than the numismatic Lunar coins. In most cases low premium Silver would have outperformed the numismatic Lunar coins as well..."

It's for this reason that I tend to buy the bullion lunar coins to hold medium-long term, but do occasionally speculate short term on the modern numismatic range of Perth Mint coins.

While I can appreciate the aesthetics of a well designed coin (there are some I own which I will never sell) and understand the attraction for collectors, for the most part I speculate/invest in precious metals for profit. When it comes to coin speculation I have had both good and bad experiences. A purchase of 50 x 2010 Clownfish coins a few years back went against me when I got too greedy, waited too long to sell and barely broke even. A recent purchase of 20 x 2013 Carded Stock horse coins went well, I sold them quickly and almost doubled my money.

The potential to speculate on proof lunar coins from Perth Mint has been limited in recent years due to strict purchase limits put on the coins. However there may be an opportunity to make a couple of hundred dollars for those inclined to go to the effort...

The Perth Mint 2013 Silver Lunar Snake Proof Coins have performed poorly over the last 12 months. Many of them traded at premiums to issue price for a short time after they were sold out (some are even still available from the Perth Mint), but quickly came back to earth. Many of the proof coins now sell for around issue price, sometimes even less. Here are a couple of recent completed sales (many that are listed for higher prices go unsold):

Prices achieve from ebay can vary significantly though based on which you list on, for example (Germany) has seen some recent sales of the 1oz proof snake at US$109.

But what can we can expect for the Perth Mint 2014 Silver Lunar Horse Proof Coins?

As I pointed out last year, the Silver Three-Coin Set & 1oz Silver Proof are probably those worth concentrating on:

"If last years Lunar Dragon release is to be of any guide on what which will be the most popular you will want to stick with the Silver 1oz Proof Coin and the Silver 3 Coin Proof Set. Shortly after their release the 3 Coin Proof Dragon Set was selling for around $800-1000 (over double the release price) and the 1oz Proof Dragon by itself trebled, selling for $300-400.

Peak prices from my observation were obtained only a short time after their release (although this might also be a result of a falling/low spot price for Silver since that time), so if you are looking to flip any coins, selling shortly after they sell out from official outlets might be a method to achieve the best price."

Some might expect a repeat of the snake, but in my opinion the horse will be a more popular coin and while it might peak in the short term again, I don't think it will fall back below issue price. Just taking a look at a recent result from the 2001 & 2002 Three-Coin Sets gives an indication of higher demand for the horse design with that set finishing 42% higher than the snake (although this can also be attributed in part to the lower mintage, hence rarity, of the horse 3 coin set, 278 vs 599 for the snake):

Recent completed sales on ebay of Series II Three-Coin Sets I've seen indicate prices circa $400 (for Rabbit, Snake) to $500 (for Tiger). Only time will tell how the horse coins go, but as I mentioned earlier in the article... "there may be an opportunity to make a couple of hundred dollars for those inclined". In my opinion the Perth Mint 2014 Year of the Horse Three-Coin Set will hit a price of around $525 shortly after sold out at the Perth Mint (i.e. on the secondary market) and the 2014 Year of the Horse 1oz Silver Proof Coin I expect to see at $150-175. That's a total of $675-700 with a cost to purchase that I am expecting at or near $435 total ($340 for Three-Coin Set, $95 for 1oz Proof). Perth Mint is offering free post for purchases over $400, so no cost for that if you purchased both. That would leave you with profit of $240-265 (with ebay fees likely to cost you around $65). It's a fair bit of stuffing around for a couple of hundred dollars and of course a profit that size is not guaranteed, the horse may exceed or under perform my expectations. I've not yet decided whether I will be making a purchase overnight, but for those interested you need to keep an eye on the recent release page here:

The coins go on sale from 12.01am 3rd September 2013 (AWST), which by the looks is:

1.30am in Adelaide
2.00am Brisbane/Sydney/Melbourne

Set your alarm clocks if you are desperate to purchase these coins (for collecting or speculation!), in my experience the 1oz Proof and Three-Coin Sets tend to last minutes when made available on the site, rather than hours or days. However, if you miss out on the late night release, they do often put some more on the website the next morning.

Good luck!

For more lunar coin coverage, see the below articles:

If you are interested in receiving free updates to your inbox with lunar coin releases then strongly recommend you signup for free email updates:

The Perth Mint Australia


Mr Barron...

You talk about holding lunar bullion coins for the medium-long term.

Could you define what you would consider that period to be in years?

Thanks in advance.

In my opinion the correction that has been ongoing for the last 2 years is a cyclical bear market within an ongoing secular bull market. Presuming that is the case I think the secular bull market probably has a few years left in it, so when I say medium term I mean probably 2-5 years, but I may continue holding some of the lunar bullion coins for longer than that also (but do intend to sell a majority of my bullion when I believe the bull market is nearing a top).

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