Numismatic Gold Coin Pricing Policies

The US Mint released a new set of pricing policies regarding the numismatic gold coins on January 12, 2009. At this unveiling, Mr. Brunhart, the US Mint Deputy Director, stated, “Transparency, agility & customer service are the catalyst for our new pricing methods.” The new policy allows the US Mint to adjust prices for their numismatic gold coins on a weekly basis, based on changes in the cost of precious metals.

The old policy made it compulsory to publish any pricing changes (for numismatic gold coins) in the Federal Register. This lengthy repricing procedure often took the coins out of the market for weeks at a stretch. The need for a newer policy was felt because of the high volatility of precious metal prices in 2008. Constant price revisions had left the market of such coins in a prolonged state of suspension.

The new pricing methodology is based primarily on the average of the London Fix gold prices. The prices of numismatic gold coins also cover all other costs incurred by the United States Mint, such as the cost of minting, marketing, and distributing such products (including labor, materials, dies, use of machinery, and promotional and overhead expenses). The whole procedure helps to provide the buyer with prices best reflecting the market trends. However, this policy is meant only for numismatic gold products and does not affect the pricing of bullion products.

Actual implementation of the new policy for numismatic gold coin pricing

The US Mint has been following this policy for quite some time now. The price adjustments come into effect mostly on Wednesday mornings rather than on Thursday, as stated in the fine print. The biggest glitch in the system, however, occurred in the last week of May, 2010.

The price chart of May-end looked like this:

• May 24, Mon AM 1,183.75
• May 24, Mon PM 1,187.00
• May 25, Tue AM 1,189.50
• May 25, Tue PM 1,198.25
• May 26, Wed AM 1,212.50
  

These prices reflect the price increase in gold on May 12, 2010.

The prices of numismatic coins, like the First Spouse Gold Coin, which contain one-half ounce of 24 karat gold each, should have been $754 (for proof versioned coins). Instead, the price offered was $779. However, this was just a oneoff case in the otherwise smooth working of the US Mint administration.