Order silver set now or wait until July?

What do you make of the current order level for the two-coin San Francisco proof silver Eagle set?

Collectors have asked for 115,059 in the first four days. This is not a particularly strong number considering that the same group of buyers bought 100,000 American Eagle anniversary sets that cost twice as much in just hours last October.

Is it too early to declare failure?

That depends on your definition.

If you are looking at it from the Mint’s perspective, low levels of orders would be considered a failure. However, to be fair, buyers can theoretically procrastinate until July 5.

On the other hand, if you are a collector who wants to make a little money on the secondary market, hoping for a dud initial offering is probably just the way to achieve that goal.

Why?

The answer is the paradox of the secondary coin market.

If the U.S. Mint offers a product that everybody seems to love and many order today, chances are its value will suffer big time in the future as the initial glow of enthusiasm fades.

If everybody hates it today and few place orders, it becomes a relatively scarce item and its price rises in the long term.

An example of a popular issue was the White House commemorative silver dollar of 1992. Twenty years ago proof and uncirculated pieces sold out quickly to the 500,000 maximum. They had a nice initial pop higher in price and today they are worth little more than bullion value.

On the other hand, Jackie Robinson gold $5 coins in Mint State in 1997 were unpopular with buyers and only 5,174 were ordered. Today one is worth over $3,000.

That perversely gives collectors who have already placed their orders for the current San Francisco set an incentive to bad mouth the offer to others. Successfully keeping the fence sitters on the fence could mean profit in July.

Yes, I know, this is too cute by half.

Collectors tend to like what they like and hate what they hate as they place their orders, or sit on their hands. It is only after the secondary market has had its way with prices that they might have second thoughts.

Buyers shooting for early deliveries and third-party grades of Proof-70 can profit despite long-term trends and they are probably heavily represented in this first wave of “S” proof silver Eagle set buyers.

The Mint did everyone a favor when it created its sales odometer on its website. It is right there with order information for all to see. Now all buyers are making decisions based on information supplied to them in a timely fashion.

When second thoughts start setting in a few months down the road, nobody can claim that they didn’t know what they were getting into.

Between now and July 5 as the odometer number rises, there will be a lot of calculations being made by potential buyers.