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Complaints push Mint to delay silver coins

A flood of complaints has caused the U.S. Mint to postpone the beginning of sales of the 5-ounce America the Beautiful silver bullion coins, which was slated for yesterday.

The Mint announced its decision late yesterday afternoon.

Interested buyers in the secondary market were confronted by prices that were at least in some cases 62 percent higher than the projected cost to the Mint’s authorized purchasers of the price of five ounces of silver plus $9.75 per coin. This cost at yesterday’s $30 silver price works out to roughly $160 a coin.

Numismatic News readers sent me e-mail reports of what they were seeing and/or paying.

Readers consider the new bullion coin sellers to be gouging.

The Mint apparently agrees or it would not have taken this unprecedented step in delaying the program because of the complaints.

Where do we go from here?

With a mintage of just 33,000 per design, the so-called bullion coins seem scarce at the moment, with high price quotes reflecting the perception. No one seems to be figuring in the 27,000 numismatic pieces to be sold directly to collectors next year.

The same perception occurred when the First Spouse designs were introduced in 2007 with mintages capped at 40,000. It took until the fourth design for buyers to figure out that such a mintage level is not all that scarce. But such a future change in market perception of America the Beautiful 5-ounce silver coins is purely theoretical now. It might never happen.

The difference is that the Mint sold the First Spouse coins directly to the collector market and not through the Authorized Purchaser network.

For the moment, the Mint is perceived as aiding and abetting secondary market price gouging. It is a position it does not want to be in and we all now wait to see what steps it will take to change this.