The U.S. Mint has cut the maximum possible mintage for the proof 2007 Buffalo one-ounce gold piece from last year’s 300,000 to 200,000. It will go on sale to collectors in just two days on Wednesday, May 23.

Price this year will be $825.95, up $25.95 from the $800 price of the 2006.

Will the lower mintage ceiling induce more hobbyists to buy than otherwise? I assume the Mint thinks the answer to the question is yes.

Second years of issue of virtually anything usually disappoint. The novelty is gone. The enthusiasm is gone. Most importantly, the collectors doing the buying may notice that their money is gone. After all, an $800 item is relatively expensive. Most Numismatic News readers can afford it – once – but if reader surveys are to be believed, that one coin alone takes up a significant chunk of the average collector’s buying funds. Unless this average collector wants to permanently change his collecting habits, he will most likely revert to the habits of prior years.

Also, many collectors are type collectors. Once they own the type, there is no further need to add another of the same design to their collections.

Potentially pushing collectors to buy are their thoughts about the gold market itself. Gold has been in a nice uptrend since 2001. Many think it will continue. If this is so, it will be better to buy a gold coin now and not wait because it might be more expensive next year or the year after.

I am already on record in print that I think the purchase total for this year’s Buffalo coin will be 75,000. That is quite a bit lower than the 300,000-coin ceiling of 2006 and the 252,200 actually sold.

Am I out on a limb? Perhaps. One factor that I look at as extremely important is the gross dollars the Mint is asking the hobby to put out. If all 200,000 of the new Buffalo coins would sell, that takes $165,190,000 out of collector hands and puts it into government hands. That’s more than the hobby can handle.

Can I be wrong? Sure. There are no accurate numbers anywhere as to just how much money collectors will spend in a year. This is my sense of things. Starting Wednesday, we will see.

Congratulations to the Royal Canadian Mint for its public relations coup in unveiling its $1 million value gold coin that weighs 100 kilograms, or approximately 3,200 troy ounces of gold, worth $2.2 million.

It reminds me of the play on the old saying, “nothing succeeds like excess.” But from a PR vantage point, it should be kudos all around.

Where gold is concerned, though, I feel like I am at the circus watching the high wire act. There is a hush in the crowd. Step by step the performer goes out onto the wire.

What I am watching is the price of gold. Step by step it gets closer to the point of no return. Will it wow us with more exciting aerial stunts as it heads to new highs, or will it disappoint?

If you read my blog Friday, you know that gold is staying just ahead of where it was this time last year. Any day now it might record a closing price that is lower than last year’s price level. Silver has been negative for some days now. Even platinum could briefly go negative in the next few days depending on market movements.

And as I wrote Friday, what will a close that makes the one-year trend negative mean? It might be just an aberration. Surely with the strength shown by copper, nickel and other metals, the factors that make gold go up must still be operative.

I keep telling myself that, but I don’t see many readers clamoring to buy gold lately. Gold bugs seem to have gone quiet. I just talked to the U.S. Mint and they are scrapping plans to sell First Spouse half-ounce gold proof coins in sets of four. Perhaps readers are more concerned with scraping up the money to fill their gasoline tanks.

Could the four-coin set price of $1,675.95 deter too many potential First Spouse buyers? Selling half-ounce coins one at a time for $425 or so will be easier than selling four-coin sets. Not everyone can spring for more than $1,000 at the drop of a hat. Then, of course, there are still one-ounce Buffalo gold proofs to come and gold American Eagles currently on sale. There is a good reason gold was used for centuries as a way of carrying around a large amount of money in small, concealable bits. It is expensive. Average collectors just can’t participate in the gold coin of the week plan. They have to pick one or two and save up for them.

It is too bad I can’t put a drum roll sound effect on this blog, but until gold breaks decisively one way or the other, the sound is rolling in my mind.

And by the way, the $425 number is not an officially announced price, it is just a ballpark guess on my part. The First Spouse coins aren’t due out until June 19.

Looking for another interesting opinion on the Canada $1 million coin? Check out Tom Michael's blog at www.numismaticnews.net/ideas

On Friday the task at hand was updating 41 line graphs that are used in the book, North American Coins and Prices. These will go into the 2008 edition, which is in preparation now. My name is on the cover, so I take a very personal interest in the project.

The line graphs show the price performance of 41 coins or sets that represent a cross section of what collectors over time are interested in. There is no 1913 Liberty Head nickel. There is a 1914-D cent. There isn’t a 1933 Saint-Gaudens $20 gold piece, but there is a 1933 Saint-Gaudens $10, which is not quite as rare, but it has been legal to own it from the start.

There are also various other coins across the denominational range.

What do the charts show? Well, they show that coins have basically gone up in value since 1972. That is good news. The fact that they rise in value means that most collectors won’t have to worry about selling for a loss, but that doesn’t necessarily make them good investments. It must be remembered that prices generally have risen by a factor of 4 since 1972. Coins just to stay even with the cost of living need to quadruple, too. Not all of them do.

The 1914-D cent, which we track in Fine-12 grade, has done well by staying ahead of inflation. What is more, the average collector probably owns it, or at least could have owned it given the widespread popularity of Lincoln cents. The 1914-D price has gone up by almost 8 times, from just under $50 to just under $400. Not bad, the owners have all the collector enjoyment for 35 years and a profit that keeps them ahead of inflation.

An 1856-S Seated Liberty quarter in F-12 did not keep up with inflation. It has risen from just over $40 to $110. It is a good solid collector coin, but the price performance lagged inflation. Still, what amusement can you find that retains so much value after 35 years?

Sure, we have some high priced rarities. There is a 1794 silver dollar in XF-40. This is a good solid, collector coin, but not flashy, liked slabbed MS-67 coins. It has gone up by a factor of 5 just since the year 2000. Currently it is valued at $235,000 in the price guide, but if you own one, don’t take my word for the current price. Get out there and test the waters.

Doing the charts for me is a bit of a distraction from my normal weekly newspaper duties, but it does get me in touch with the basics and it makes me think.

Every collector can name a coin that he has that did particularly well for him. Most can also name a bad purchase, too.

The charts in North American Coins and Prices try to show the good, bad and ugly without skewing results to the point of being totally unrepresentative of the experience of the average collector.

Naturally, I hope you buy the book when it is published at the beginning of the autumn collector season.

Today will be a very important day for gold. The next seven days may be the most important week for gold all year.

Why? Well, until yesterday’s rally, gold was in danger of being down from this time last year.

What? Whoa. How can that be? Gold is in a powerful uptrend. From the April 2, 2001, low of $255.60 a troy ounce until now, gold is up 266 percent.

What about the federal budget deficit, the trade deficit and inflation? Gold can’t go down, can it?

Perhaps it can’t. We’ll see today and in the coming week. Gold’s close on May 4, 2006, was $674.20. Gold’s close May 2, 2007, was $672.30.

Not to worry. Yesterday gold closed at $681.70 after rallying about $9. Whew, that was close. But the threat isn’t over.

On May 5, 2006, gold closed at $682.20, so gold needs to go up in today’s trading to stay ahead of it. On May 9, 2006, it closed at $699.40. On May 10, 2006, it closed over $700 for the first time in a generation. On May 11, 2006, it peaked at $719.80.

Any day now, gold could post a negative annual return. Silver already has.What would that mean? Will it dent confidence? Is it a sign of worse things to come? At the very least, it might indicate that the easy money in the gold market has all been claimed.

It has been reported that Barrick Gold, a gold mining firm worth $25 billion, finished fulfilling all of its futures delivery commitments earlier this year. This hasn’t been the case for many years because it routinely sold a part of each year’s production in the futures market to nail down prices and lock in profits. What it means is that for the first time in years, Barrick is free to market its output at current market prices. Obviously, the firm thinks it will make more money this way. If Barrick executives fear that the metal might tank, they might just start selling forward again in the futures market, which would help to reinforce any developing downtrend by adding additional supply. If central banks figure gold is going down, they might dump some of their metal holdings, too.

So watch gold trading in the next few days. It might teach us all a lot.