US Mint Publishes New Pricing Policy for Gold & Platinum Numismatic Products

Today, the US Mint published notification of a new pricing policy for Gold and Platinum Numismatic products. This pricing policy will apply to collectible gold and platinum products that the US Mint sells directly to collectors. The new policy is drastic and much needed change that provides a greater level of predictability and transparency for the US Mint's customers.

The move seems to be in response to the incredibly volatile precious metals prices experienced during 2008. During the course of 2008, platinum was up more than 48% at its peak and down more than 50% at its low. Gold was up over 21% at its peak and down over 14% at its low. Amidst these fluctuations, the US Mint raised prices for platinum products once, suspend sales twice, and lowered prices twice. Gold products were available for sale at very high premiums for most of the year before being briefly suspended and resumed with lowered towards the end of the year.

The US Mint's pricing policy will allow them to adjust the prices of products on a weekly basis, when the average price of gold and platinum cross certain thresholds. The new pricing methodology will become effective January 12, 2009.

The notification also provides collectors with the price for the 2009 Ultra High Relief Gold Double Eagle. Provided the average price of gold remains between $850.00 - $899.99, the price will be $1,239.00.


I will have a follow up post tomorrow with some reactions and thoughts. For now here is the US Mint's notification and charts for pricing of Gold and Platinum coins (click on the charts for large size versions):

[Federal Register: January 6, 2009 (Volume 74, Number 3)]
[Notices]
[Page 493-496]

DEPARTMENT OF THE TREASURY

United States Mint


Notification of New Pricing Methodology for Numismatic Products
Containing Platinum and Gold Coins

SUMMARY: The United States Mint is implementing a new pricing methodology for its numismatic products containing platinum and gold coins to mitigate the effect that fluctuating gold and platinum commodity costs has on the pricing of these products. The new pricing methodology is based primarily on the London Fix weekly average (average of the London Fix prices covering the previous Thursday a.m. Fix through the Wednesday a.m. Fix) platinum and gold prices, which reflect the market value of the platinum and gold bullion that these products contain. As required by law, the prices of these products also must be sufficient to recover all other costs incurred by the United States Mint, such as the cost of minting, marketing, and distributing such products (including labor, materials, dies, use of machinery, and promotional and overhead expenses). This pricing methodology will allow the United States Mint to change the prices of these products as often as weekly so they better reflect the costs of platinum and gold on the open markets.

DATES: The new pricing methodology, as further explained in the SUPPLEMENTARY INFORMATION section, will go into effect on January 12, 2008.

SUPPLEMENTARY INFORMATION: Pursuant to the authority that 31 U.S.C. 5111(a)(3), 5112(i), 5112(k), 5112(o), and 5112(q) grant the Secretary of the Treasury to mint and issue gold and platinum coins and to prepare and distribute numismatic items, the United States Mint sells to the public numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin. In accordance with 31 U.S.C. 9701 31 U.S.C. 9701(b)(2)(B), the United States Mint is changing the prices of these coins to reflect a new methodology in pricing.

Effective January 12, 2009, the United States Mint will commence selling numismatic products containing American Eagle Gold and Platinum Coins, American Buffalo Gold Coins, First Spouse Gold Coins, and the 2009 United States Mint Ultra High Relief Double Eagle Gold Coin at prices established by using the new pricing methodology. Specifically, each Wednesday, the United States Mint will apply the average London Fix for platinum and gold (average of the London Fix prices covering the previous Thursday A.M. Fix through the Wednesday A.M. Fix) to the below pricing schedules. Price adjustments as a result of this process, if any, will be effective at 10 a.m. E.S.T. on the immediately following Thursday.

Price Chart for Gold Numismatic Products (click to enlarge)


Price Chart for Platinum Numismatic Products (click to enlarge)