Dragons: Bullion Coins with Numismatic Potential
coin investors should always, when the
opportunity presents itself, invest in bullion
coins that have the potential to attain
collector status. Such coins enable investors to
profit not only from an increase in the price of
gold but also from premium increases. The Year
2000 Australian Gold Dragons are such coins,
selling at only a few dollars more than the
popular American Gold Eagles.
Dragons have additional numismatic appeal
because of limited production. The table below
shows the maximum numbers that can be minted. In
all likelihood, the caps will not be met.
However, because the Perth Mint does not reveal
the mintage of any coins it produces, we will
not know how many were finally produced.
Nevertheless, we do know the limits (shown
below) for the Gold Dragons. The table also
shows the significance of restricted production.
ozs X $300
$300 gold, a mere $9 million would buy all the
1-oz Gold Dragons. By comparison, Gold Eagles
have unlimited production. In 1999, the U.S.
Mint sold 1,491,000 one-ounce Gold Eagles and in
1996 (a bad year) approximately 189,000.
Additionally, Gold Dragons are .9999 fine gold,
and Asians prefer pure gold.
has been in touch with the Perth Mint and has
been told that Gold Dragons are being very well
received throughout Asia. The earlier coins in
the Lunar Series set the stage, alerting
collectors to these desirable coins.
the Year 2000 Dragon to be a big winner.
on the fractional-ounce Gold Dragons are only
slightly higher than premiums on comparably
sized Gold Eagles, making them attractive to
investors who like smaller coins. The 1/20-oz
Gold Dragon, a jewelry item, carries a premium
of approximately 50% above spot.
Perth Mint introduced the Lunar Series in 1996.
a series of coins is well received by
collectors, the earlier coins command the higher
prices. However, because of the uniqueness of
the Year 2000 Gold Dragons,
CMI believes they
will achieve premiums when the Perth Mint stops
minting them in December 2000. Already, the
Perth Mint has started turning out the Year 2001
"Snake," the next coin in the Lunar
Series. Because of the uniqueness of the Gold
Dragons, they could easily carry $150 premiums
in one to two years.
coin dealers promote old US gold coins or
obscure European gold coins as having numismatic
CMI urges investors to avoid both old
U.S. and European gold coins. Old U.S. coins can
attain high premiums; however, old U.S. gold
coin premiums have shrunk over the last two
years, some by as much as $200 each.
believes those premiums will fall further and
that old U.S. coins will be good investments
only when they can be bought near spot.
Generally, this means XF/AU grades at spot and
MS62/MS63 coins within $30-$40 of spot.
what the promoters say, European coins rarely
attain genuine premiums. The coins being
promoted are bullion coins and in Europe sell
within a few dollars of the value of their gold
content. Promoters bring them to the U.S., mark
them up 20%-30%, and claim they have numismatic
potential. Furthermore, promoters often compare
the European coins with old U.S. gold coins,
which, at times, do trade with big premiums.
However, equating old U.S. gold coins to
European coins is misleading, and investors
should avoid doing business with firms that do
(Click here for a further discussion of the
drawbacks of European coins)
Dragons, on the other hand, are genuine bullion
coins, which sell at bullion coin prices. Yet,
they have excellent numismatic potential. For as
long as Gold Dragons can be bought at bullion
coin prices, investors should make them their
anticipates that much of the expected success of
the Gold Dragons will come from Chinese people
and other Asians who will be drawn to the coin.
Demand from the jewelry market for years to come
could be huge. Additionally,
collectors worldwide to make the Dragons, and
the other Lunar Series coins, among their
favorites. Collectors like to complete sets, to
know what they are facing in costs and duration.
That is why the Perth Mint Lunar Series stands
such a great chance of being more successful
than the Singapore and Hong Kong lunar coins.
Perth series began with the Year of the Rat,
which is the first year in the Chinese lunar
calendar, and it offers four sizes for all the
years. Furthermore, it is likely that the Perth
Mint will discontinue its Lunar Series when all
twelve years have been minted, making it unique.
Finally, it should be noted that the Perth Mint
strikes the highest quality coins available. No
collector is disappointed when receiving Perth
of the Snake gold coins became available in
late 2000. They are priced the same as the
Gold Dragons, or at least until the Dragons are
sold out. The maximum 30,000 one-ounce
Gold Dragons were minted, and as of February,
2001, less than 6,000 remain at the Perth Mint.
When the 6,000 are sold, 1-oz Gold Dragons will
be available only through the secondary market,
at which time prices can be expected to rise.
a discussion as to why you should buy gold and
silver, click here).