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Coin surcharges or no surcharges?

The Breast Cancer Awareness pink gold $5 commemorative coin went on sale March 15, with a $35 surcharge benefitting the Breast Cancer Research Foundation.

Personal choice is important to coin collectors. This is true across all segments of the hobby.

Naturally, different priorities mean collectors do not behave identically.

This is nowhere more visible than in coin collector reactions to the surcharges on commemorative coins that go to support good causes.

Commemorative coin buyers help these causes. Abstainers don’t.

The latest point of evaluation is something I wrote as a blog.

See it below:

Today the Breast Cancer Awareness gold $5 coin goes on sale.

Making it special is its pink gold color.

To achieve this, the Mint had to reduce the gold fineness from the standard .900 to .850.

The alloy that makes the resulting pink is a mixture of .148 copper and .002 zinc.

This makes the $5 denomination lightweight in comparison to other $5 commemoratives with .900 fine gold.

A standard $5 contains .24187 ounces of gold.

The pink gold $5 contains .2167 ounces of gold.

Checking the Kitco website this morning, I see that gold is trading at $1,320, a nice round number that helps make calculations easier.

The coin therefore contains $286 in bullion. Issue price is $431.

That means the markup from the gold value is 50 percent.

Stated another way, two-thirds of the price is gold bullion and one-third is other, including the $35 surcharge.

Will this lighter weight deter buyers?

Well, let’s take a look at the price of a quarter-ounce proof American Eagle for comparison.

It is currently priced on the Mint’s website at $440.

It contains a quarter ounce of gold, or .25 ounce.

Gold value is $330.

The $110 difference is a markup of 33.3 percent.

Stated another way, gold bullion is three-quarters the cost of the coin.

Obviously, three-quarters bullion value is higher than the two-thirds bullion value of the Breast Cancer Awareness coin.

The difference is the $35 surcharge that goes to the Breast Cancer Research Foundation located in New York City.

This recipient is specified by the authorizing law.

The Mint gets an identical $110 per coin from both programs.

It looks like it all boils down to whether a potential buyer wants to support a worthy charity and acquire an unusual looking coin in the process.

The special color aside, this is the trade-off collector buyers have been evaluating since the first surcharges were placed on commemorative coins in 1983.

There it is. What’s your choice?


This article was originally printed in Numismatic News. >> Subscribe today.


More Collecting Resources

• Download The Metal Mania Seminar with David Harper to learn more about the metals market.

• Are you a U.S. coin collector? Check out the 2019 U.S. Coin Digest for the most recent coin prices.

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