Reader says 2010 platinum worthy

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On Aug. 12, 2010, the United States Mint released the second coin in the latest series of one-ounce $100 proof platinum coins, and it should be a real winner.

The price fluctuates based on the closing price of platinum each Wednesday, with the initial price $1,892.

The U.S. Mint bases its prices on a grid. Based on market price of $1,550 the premium is 22.065 percent. However, as platinum prices increases the premium goes down so that as long as platinum does not go up more than $99.99 the price remains the same. Thus, assuming platinum increases to $1,649.99 the price will remain the same and the premium will be reduced to 14.67 percent, for an average premium of 18.67 percent over bullion.

In contrast, Canada issued a proof one ounce platinum coin in 2009 with a mintage of 200 for a price of $2,999.95 Canadian, which at this time equals $2,881.45, for a premium based on $1,540 platinum of more than 87 percent.

Canada shows a population in 2008 of 33,311,400, or roughly 11 percent of that in the U.S. Thus, if you multiply the production of its 2009 proof coin, it would equate to roughly 1,800 coins. However, Canada issued a platinum bullion one-ounce coin in 2009, thereby taking away a share of the market formerly held by the U.S.

In 2010, Australia is giving a choice of buying either five different 1/10th ounce proof coins, with a maximum total mintage of 2,500, or a ½ ounce coin with a maximum total mintage of 1,000. At the hefty price of $1,355.84, the premium is 76.08 percent over bullion.

Australia’s population is approximately 21 million. The U.S. population is approximately 300 million. Thus, the U.S. is roughly 14 times larger than Australia. Thus, taking the 3,500 total platinum coins struck, would equal 50,000 coins if struck by the U.S. to equal Australia’s production.

Unlike the years 1997 through 2008, starting in 2009 the U.S. Mint stopped striking uncirculated and fractional sized proof platinum bullion coins and the only proof coin that it has struck is the six (6) principles of the Preamble commemorative, which at least for the first two years has a maximum mintage of an extremely limited quantity.

Years prior to 2009 had total mintage of all options in the vicinity of 100,000 to slightly more than 300,000 coins making the maximum mintage of the 2010 U.S. proof platinum Eagle of 10,000 with an initial household limit of five coins a sure winner even though its mintage is 25 percent (2,000) more coins than were produced in 2009.

If someone wants to buy a 2010 U.S. platinum coin, just like Henry Ford and his Model T car which would be sold in any color so long as it was black, the only choice that the Mint gives is to buy the 2010 $100 proof, and if 2009 is any indication of its demand you better do it pretty fast or you will likely be out of luck and have to pay a substantial premium in buying it on the secondary market.

If the 2009 platinum coin is any indication, the 2010 will sell out quickly and have a large potential increase in the aftermarket and the downside is relatively small so long as platinum doesn’t have a dramatic decline from the $1,500 an ounce lever, which, based on the lack of confidence in the U.S. Dollar seems unlikely.

William H. Brownstein is a hobbyist from Santa Monica, Calif.
Viewpoint is a forum for the expression of opinion on a variety of numismatic subjects. The opinions expressed here are not necessarily those of Numismatic News.
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