| In April, the U.S. Mint revealed plans to strike in | | | | .9999 fine coins and their packaging so that the |
| early 2006 new .9999 bullion coins to go after the | | | | coins are not easily scratched or damaged. If the |
| growing world market for .9999 fine (24-karat) | | | | Mint opts to go with packaging its new coins in |
| gold coins. Studies show that pure gold coins claim | | | | tubes, as it does Gold Eagles and as Philharmonics |
| 60% of the world's gold bullion coin market, which | | | | are packaged, then the Mint needs to avoid milled |
| is some $2.4 billion annually. The Royal Canadian | | | | edges. |
| Mint's Maple Leafs hold the number one spot for | | | | Although Gold Eagles have milled edges, old U.S. |
| pure gold coins. However, problems with Maple | | | | gold coins ($20 Libs and St. Gaudens) were |
| Leafs have surfaced. | | | | minted with lettering on the edges. So, lettering is |
| If the Mint avoids the problems that have | | | | not new to the U.S. Mint. With lettering, the edges |
| developed with Gold Maple Leafs, it has a golden | | | | can be smooth, making the coins less likely to |
| opportunity to grab an even bigger share of the | | | | scratch other coins in handling. Philharmonics, which |
| gold bullion coin market. The U.S. Mint's American | | | | are not prone to damage, have lettering on their |
| Gold Eagles are the best selling 22-karat gold coins | | | | edges. |
| in the world. | | | | [Over the centuries, mints learned to design gold |
| Despite being the world's best-selling 24-karat gold | | | | coins to guard against "shaving," a process by |
| coins, 1-oz Maple Leafs' design and packaging | | | | which a small amount of metal is "shaved" from |
| leave them susceptible to damage. As a result, | | | | the edges. Milled edges that have been shaved |
| Gold Maple Leafs have fallen in disfavor among | | | | are clearly detectible. Light lettering on the edges |
| U.S. gold bullion coin investors. Indications are that | | | | solves the problem as well. If no lettering can be |
| gold bullion coin investors worldwide have the | | | | seen on coins that are known to have been |
| same frustrations with 1-oz Gold Maple Leaf coins. | | | | minted with lettering, then the coins have been |
| It is nearly impossible to remove, inspect, and put | | | | shaved and no longer have their original gold |
| 1-oz Gold Maple Leafs back in their tubes without | | | | content.] |
| scratching them, no matter how carefully done. | | | | As do Maple Leafs, Perth Mint .9999 fine gold |
| Gold Maple Leafs have smooth, clear fields around | | | | coins have milled edges and carry a likeness of |
| Queen Elizabeth's likeness and sharp milled edges. | | | | Queen Elizabeth II on the obverse (front). |
| As the coins are put back in their tubes, the | | | | However, to protect its coins from damage, The |
| edges scratch the fields--and sometimes the | | | | Perth Mint encapsulates them in plastic capsules. |
| Queen's raised image. | | | | When Perth Mint bullion coins are removed from |
| And, Heaven forbid that a 1-oz Gold Maple Leaf is | | | | their capsules and put in tubes, the coins are |
| dropped on a floor or even a hard tabletop. But, | | | | susceptible to scratching as are Maple Leafs. |
| most of the damage is done when investors | | | | In going after a piece of the $2.4 billion .9999 fine |
| handle the coins. If Gold Maple Leafs are handled | | | | gold bullion coin market, the Mint needs to |
| roughly, as investors are used to handling | | | | consider the mindset of bullion coin investors. |
| Krugerrands and Gold Eagles, Gold Maple Leafs | | | | Bullion coin investors seek alternatives to paper |
| are easily damaged. Consequently, many badly | | | | money; they are not coin collectors. Bullion coin |
| damaged Gold Maple Leafs have come back into | | | | investors prefer coins packaged so that they can |
| the secondary market. | | | | be easily stored and secured. |
| Until a few years ago, Gold Eagles and Maple | | | | This means the Mint should package the coins |
| Leafs sold at the same markups over spot. But, | | | | twenty to a tube, which has become--primarily |
| as Maple Leafs, which investors have bought since | | | | because of Gold Eagles--the preferred method. |
| 1979, started coming into the secondary market, | | | | Five tubes conveniently total one hundred coins. |
| problems surfaced. Now, to keep investors in the | | | | Further, the tubes should be made of the same |
| U.S. market buying Maple Leafs, the Royal | | | | durable plastic from which Gold Eagle tubes are |
| Canadian Mint has to offer new (current year) | | | | made. Hard plastic tubes, such as those used for |
| Gold Maple Leafs at a half-a-percent below Gold | | | | Philharmonics, can and do break when dropped. |
| Eagle prices. | | | | Gold Eagle tubes, on the other hand, are virtually |
| Damaged 1-oz Gold Maple Leafs are such a | | | | indestructible. |
| problem that one important secondary market | | | | For protection against "shaving," the Mint should |
| maker stopped dealing in the coins for a while. | | | | design its new coins with lettered edges. Lettered |
| The head trader said he did not have time to | | | | edges would make the coins much less |
| discuss with buyers and sellers the conditions of | | | | susceptible to scratching. |
| the coins. Further, he said his staff did not have | | | | The Mint is going after the bullion coin market, and |
| time to inspect each coin and classify it as to the | | | | bullion investors like to feel and heft their coins. |
| amount of damage. It is commonplace for sellers | | | | Packaging the coins in tubes enables investors to |
| to say the coins are in "perfect condition." Yet | | | | more easily inspect their coins. Collectors, on the |
| when Gold Maple Leafs arrive, they often are | | | | other hand, want their coins in as pristine condition |
| badly scratched or rim nicked. | | | | as possible. Although capsules are excellent for |
| Another major bullion dealer (perhaps the nation's | | | | protecting collector coins, coins individually |
| largest) currently buys back "perfect" Gold Maple | | | | packaged in capsules require more space for |
| leafs from established dealers at a little over spot, | | | | storage. The other aspect that the Mint has to |
| which means investors receive less than spot if | | | | consider is the coin's theme. |
| their dealers unload to this firm. For scratched or | | | | The Mint should make the theme something |
| damaged coins, this firm pays less than spot, | | | | uniquely American, as it did with its American |
| which enables the firm to send the coins to a | | | | Eagles coins. For the Gold Eagles, the Mint chose a |
| refinery at a profit if the firm has no buyers for | | | | slimmed-down rendition of Augustus |
| Gold Maple Leafs. | | | | Saint-Gaudens' famed Standing Liberty, which he |
| The secondary dealer returned to trading Gold | | | | created in 1907 to grace a new Double Eagle ($20 |
| Maple Leafs but buys all them only at prices that | | | | gold coin). Nearly one hundred years later, the |
| enable him to profitably melt the coins if they are | | | | Saint Gaudens, which the coin is now called, is |
| really beat up. As noted, because of the problem | | | | viewed as the most beautiful coin produced by |
| with secondary market Gold Maple Leafs, the | | | | the U.S. Mint. |
| Royal Canadian Mint has to price Gold Maple Leafs | | | | For its Silver Eagles, the Mint chose A. A. |
| below Gold Eagles to entice investors to take | | | | Weinman's Walking Liberty design, which was used |
| Gold Maple Leafs in the U.S. market. | | | | on half-dollars 1916-1947. Walking Liberty halves |
| Luckily--the free market being what it is--there | | | | are among the most popular silver coins ever |
| are dealers who will take the time to evaluate | | | | turned out by the U.S. Mint. Judging by the |
| Gold Maple Leafs and pay more for the ones in | | | | success of the Silver Eagles program (more than |
| better condition. Still, the spread (the difference | | | | 128 million sold since their inception), putting the |
| between what an investor can buy and sell for at | | | | Walking Liberty on Silver Eagles was the right |
| any moment) on "perfect" Gold Maple Leafs is | | | | move. |
| about $4 wider than on Gold Eagles. However, the | | | | Some may argue that the Standing Liberty and |
| U.S. Mint's new 24-karat gold coins need not be | | | | the Walking Liberty designs are being used in the |
| problem coins. | | | | American Eagles program, and, therefore, the Mint |
| For example, the 1-oz Austrian Philharmonics and | | | | should go onto another design. However, the |
| The Perth Mint's 1-oz coins are .9999 fine. Yet, | | | | Standing Liberty and the Walking Liberty are |
| these coins are not easily damaged during normal | | | | immediately identified as American by the world's |
| handling because of their designs and/or their | | | | bullion coin buyers. Besides, is not Miss Liberty as |
| packaging. | | | | much our nation's icon as is the eagle? |
| Philharmonics come ten to a tube and can be | | | | If the U.S. Mint avoids the problems that have |
| taken out and put back in their tubes without | | | | surfaced with Gold Maple Leafs and offers gold |
| scratching. The Perth Mint coins come individually | | | | bullion coin investors a strong alternative, then it |
| encapsulated in hard plastic capsules. As long as | | | | has a golden opportunity to capture a big share |
| Perth Mint coins remain in their capsules, they | | | | of the .9999 fine gold bullion market. With the |
| maintain their perfect conditions. | | | | right planning, the Mint could shake the Maple |
| Hopefully, the U.S. Mint knows of the problems | | | | Leaf's hold on the .9999 bullion coin market. |
| with Gold Maple Leafs and will design its new | | | | |