April 20, 2024

Sales of Platinum American Eagle Coins Slow Down After Fast Start

2013 Platinum ProofUS Mint Resumes Production of American Eagle Platinum Bullion Coin

The United States Mint first began minting the American Eagle platinum bullion coin in 1997 but suspended production in late 2008 when demand for gold and silver bullion coins skyrocketed in the wake of the financial crisis.  With its production capacity strained by huge investor demand for gold and silver coins, the US Mint decided to suspend the production of platinum coins.

In 2007, the year before suspending production, annual sales of the platinum bullion coin totaled only 9,050 ounces.  During 2008, the platinum bullion coin was sold up until November and a total of 33,700 ounces of coins were sold.  The coin had been available in one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce sizes with legal tender values of $100, $50, $25, and $10, respectively.

In addition to the bullion version of the American Eagle platinum coin a numismatic proof version of the coin was also available from 1997 to 2008 in all four sizes.  Despite suspending production of the bullion platinum coins in 2008 the Mint continued to annually produce one numismatic version of the platinum coin for collectors.  The numismatic proof version of the platinum coin undergoes a specialized minting process at the Mint where they are struck multiple times with special dies that result in the coin having a softly frosted finish with detailed images that seem to float above the mirror like surface of the coin.

AE Platinum Proof Reverse

AE Platinum Proof Reverse

The 2014 American Eagle Platinum bullion coins are produced by the West Point Mint and only come in a one ounce size.  In March, the first month that the coins were available, the Mint sold 10,000 coins as authorized purchasers built up inventories for sale to the public.  Just as with the American Eagle gold and silver bullion coins, the public cannot buy them directly from the Mint but must purchase them through US Mint authorized purchasers or coin dealers.  April sales of the platinum bullion coins totaled only 1,200 ounces.

Platinum is one of the rarest of precious metals with annual production through mining and recycling of only about 7 million ounces.  The vast majority of all platinum mined comes from South Africa and Russia both of which have unstable political situations which has resulted in frequently curtailed production.  Platinum consumption is expected to exceed supply during 2014 with the deficit coming out of platinum stocks.

Resumption of the production of platinum coins by the US Mint now allows investors the opportunity to diversify their precious metal holdings

Why The $1 Trillion Platinum Coin Idea Won’t Work

With the United States rapidly approaching the debt ceiling limit, a dysfunctional and divided Congress appears unable to agree on either spending cuts or an increase in the debt ceiling.  Absent some grand Congressional compromise, America’s nonstop trillion dollar deficit spending will rapidly push the nation to the brink of default before the end of next month.

Although the idea of default seems like a low probability to many people, if such an event were to occur, the result could be disastrous to both the markets and the economy.  Americans have always been able to come up with ingenious solutions before falling off the precipice and this time is no different.  The idea of minting a $1 trillion dollar face value platinum coin to cover our spending needs has quickly garnered national attention.

Predictably, opinions vary greatly as to the legality and efficacy of using a coin worth about $1,700 to fund a trillion dollars worth of spending.  The trillion dollar coin idea, ridiculed as irresponsible by some, is seen by others as a legitimate manner in which to resolve our deficit crisis.  For fiscal conservatives, the mere thought of proclaiming a common coin to have a trillion dollar value in order to remain solvent, is a wretched sign of how incredibly tenuous the financial condition of the United States has become.

In no particular order, here are some of the arguments regarding the trillion dollar coin.

U.S. Rep. Greg Walden (R-Ore.) announced that he would introduce a bill to stop the proposal to mint high-value platinum coins to pay the federal government’s bills.   Rep. Walden said, “Some people are in denial about the need to reduce spending and balance the budget. This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks.”

A Washington Research Group analyst said, “The President could assert that that 14th amendment negates the requirement for Congress to raise the debt ceiling.  Or Treasury could mint a $1 trillion platinum coin and deposit it at the Federal Reserve.  Neither are great options.  We see chaos if the market has to confront Treasuries where the debt is backed by Congress and those where it is not backed by Congress.  For banks, this might be as bad as an actual default. The economic uncertainty could cause lending to grind to a halt, the disruptions could cause unemployment to spike which means higher loan losses, and interest rates could skyrocket as the market is unsure whether one of these creative solutions is even legal.”

According to Bloomberg:

In general, the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve’s control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination.

This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government’s bills, in lieu of issuing debt.

What the law should say is that the executive branch may borrow to pay whatever obligations the federal government has, but may not print. Unfortunately, when we hit the debt ceiling, the situation will be backwards: The administration will not be allowed to borrow, but it can print in unlimited quantities.

Economist Paul Krugman, who believes that the United States effectively has no limit on its spending ability, thinks using a $1 trillion dollar coin would solve our debt limit crisis.

Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.

Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.

The American Enterprise Institute explains how the platinum coin concept would work:

There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper.  BUT, the Treasury has broad discretion on coins made from platinum.  The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins.  The President would then order the coins deposited at the Fed, who would then put the coin(s) in the Treasury who now can pay all their bills and a default is removed from the equation.  The effects on the currency market and inflation are unclear, to say the least.

According to CNN:

Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC § 5112, also grants Treasury permission to “mint and issue platinum bullion coins and proof platinum coins.”

This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.

Why The $1 Trillion Platinum Coin Idea Won’t Work

The genesis of the trillion dollar platinum coin scheme derives from the law (Title 31, Section 5112, (31 U.S.C. § 5112(k)) passed by Congress under their constitutional power to coin money and regulate the value thereof.  This particular law was passed to give the U.S. Mint the authority to produce the American Eagle Platinum Bullion and Proof coins, without restriction to the American Eagle products program.

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

As argued in some of the commentary above, it seems clear that the law would allow the Secretary to authorize the U.S. Mint to produce a platinum of any stated denomination, including one trillion dollars.

The Federal Reserve would receive a coin on which would yield a profit of $1 trillion dollars based on the concept of seigniorage, which is the difference between the cost to produce the coin and the “face value” of the money stamped on it by the U.S. Mint.  However, under the rules of both the American Eagle program and other commemorative programs, the coin does not become “legal tender” until the U.S. Mint is paid for the coin with other legal tender or an appropriately valued amount of bullion.  Until the U.S. Mint was paid, the Federal Reserve would possess a rather beautiful coin worth only about $1,700, representing the intrinsic value of the platinum contained therein.

In the recent case of the government confiscation of 1933 Saint-Gauden Double Eagle gold coins from the heirs of Israel Swift, the court ruling confirmed the validity of the legal tender concept.  In the court ruling, Judge Davis cites precedents, including the government’s original case against Israel Swift in 1934, and confirmed that until a U.S. Mint coin is bought and paid for, the coin is not considered to be legal tender.  The concept of a coin not becoming legal tender until it was paid for was further confirmed in the sale of the Fenton-Farouk 1933 Double Eagle gold coin.  When the Double Eagle was sold on July 30, 2002, for $7.6 million, an additional $20 was required to be paid to “monetize” the face value of the coin in order for it to become legal currency.

Exactly how would the U.S. Mint be paid in order for the $1 trillion coin to become official legal tender?  If the Federal Reserve accepts the trillion dollar coin from the U.S. Mint, they would incur a $1 trillion liability to the U.S. Mint.  To offset the liability to the U.S. Mint, the U.S. Treasury would have sell $1 trillion in bonds which can’t legally be done due to the limits placed on its borrowing capacity by the debt ceiling limit.  The idea of a $1 trillion platinum coin becomes a fatally flawed solution that solves nothing.

So why can’t the Federal Reserve simply “print money” to pay for the $1 trillion coin?  As explained by Paul Krugman, the Fed does not legally have the power to print money, with one rather dubious exception.

First, as a legal matter the Federal government can’t just print money to pay its bills, with one peculiar exception. Instead, money has to be created by the Federal Reserve, which then puts it into circulation by buying Federal debt. You may say that this is an artificial distinction, because the Fed is effectively part of the government; but legally, the distinction matters, and the debt bought by the Fed counts against the debt ceiling.

Furthermore, Krugman admits that the platinum coin idea is a “gimmick” since the coin would effectively have the same value as other outstanding Treasury debt and the Treasury would have to eventually buy the coin back with additional borrowings.  Somewhat surprisingly, Krugman also concedes that despite the fact that much of the government’s current spending is financed by the Fed’s money printing, we cannot ignore the ultimate consequences of huge holdings of Treasury debt held by the Fed.

It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought. So even though right now that debt is just a claim by one more or less governmental agency on another governmental agency, it will eventually turn into debt held by the public.

The entire concept of the United States funding itself with a manufactured $1 trillion dollar coin of nominal intrinsic value is fraught with danger since it highlights the extent to which we are willing to debase the value of the U.S. dollar to continue massive deficit spending – at some point our creditors will begin to take notice.  Think of Japan and China who each hold more than $1 trillion in U.S. Treasury debt securities.

Aside from the fact that the minting of a $1 trillion dollar coin is probably legal, it is not a workable solution since the coin would be of no value until it was paid for as explained above.  As discussed in Bloomberg, instead of pursuing dubious policies that will ultimately alarm the nation’s creditors, the challenge of compromising on the debt ceiling should be viewed as an opportunity for Congress to take responsibility for the nation’s future fiscal policies.

Watch what he did, not what he says. President Barack Obama says he won’t agree to spending cuts in return for Republicans’ raising the debt ceiling. Yet he did exactly that in 2011. And he should do it again.

The debt ceiling ought to be raised because nobody has a plan to eliminate the deficit immediately, and there is no popular support for doing what that would take. A congressman who isn’t presenting and supporting a zero-deficit-now plan has an obligation to give the federal government the additional borrowing authority that continued deficits make necessary.

For liberals, that’s the end of the matter. The debt ceiling should be raised without any spending cuts attached, and ideally it should be raised to infinity. One common argument goes like this: Since Congress sets spending and tax levels, no good purpose is served by holding a separate vote making it possible for the government to follow Congress’s original instructions.

That argument would have more force if the federal budget were the result of a deliberate policy. Instead, more and more of our spending rises on autopilot because of decisions made long ago, and nobody is forced to take responsibility for the gap between revenue and commitments. Bills to raise the debt ceiling are the only occasions when congressmen and the president come close to doing so. They are thus appropriate moments to attack the trends that are driving our rising debt.

More On This Topic – “Creating Money Out of Thin Air”

Former U.S. Mint Director: The $1 Trillion Platinum Coin Ain’t Worth a Plugged Nickel

The $1 trillion platinum coin is a desperate gimmick of questionable legality and doesn’t even come close to solving our fiscal problems.

First, it may be legal to mint a platinum bullion coin with a $1 trillion face value, but it’s not legal to pass it off as actually worth $1 trillion if there isn’t $1 trillion of platinum in it. That’s because it’s a bullion coin and not a legal circulating coin. The face value of a bullion coin has no relationship with the metal content because the value is in the metal, whose price fluctuates daily.

Second, for a coin to be worth its face value, it has to be made as a circulating coin.

The Fed would pay the Mint face value for the coin. After deducting the cost of the coin, the Mint would return the balance to the Treasury. All this needs to be done before we run out of money. Good luck with that.

Third, the current law does allow the Mint to make a platinum proof coin and does not specify whether this applies to a bullion coin or a circulating coin. A proof coin refers to a mirror-like finish and is made for coin collectors. However, a proof coin must be accepted at face value. Some have argued that the law can be stretched to allow for a platinum circulating coin, but this would not be consistent with the intent of the original legislation.

But let’s ignore the law for a moment. Let’s assume that a $1 trillion circulating coin could be created. It would be no different than creating money out of thin air.


Platinum Has Soared 17% Since Early August – What Now?

Since establishing multiple chart bottoms at $1,400 during June and July, platinum has soared along with other precious metals.  Based on the London Fix Price, platinum has soared 16.5% from a low of $1,390 on August 3, 2012 to a September 20 closing price of $1,620.

In early August, Gold and Silver Blog examined the ostensibly poor fundamentals which had driven down the price of platinum and concluded that, based on the widely held bearish consensus and chart action, platinum had already fully discounted all bearish news.  In addition, the gold to platinum ratio had reached a low not seen since 1985, another signal that platinum was undervalued.  (See Platinum Perspectives – Time To Buy or Will The Bears Win?)

Courtesy: Kitco.com

Despite the recent normal consolidation in platinum, prices are likely to move substantially higher over time along with the rest of the precious metals complex.

As noted in early August, Platinum can be purchased from the U.S. Mint in the form of Proof Platinum Eagles.

The U.S. Mint has been producing the Proof American Platinum Eagle since 2009.  According to MintNewsBlog, the entire 2009 production of 8,000 Proof Platinum Eagles sold out in a week.  During 2010, the U.S. Mint produced 10,000 Proof Platinum coins which also quickly sold out.  During 2011, the mintage was set at 15,000 coins but the sales pace slowed considerably with pricing set at $2,092 and the coin has still not sold out with total sales of 14,760 as of the last U.S. Mint report.  On August 9th, the U.S. Mint announced that production of the 2012 Proof American  Platinum Eagles will be set at 15,000 coins.  Orders are limited to 5 per household with initial pricing at $1,692.

For investors disinclined to hold physical platinum, positions can be easily established through the purchase of the ETFS Physical Platinum Shares (PPLT) which holds physical platinum.  The PPLT holds a relatively small amount of platinum reflecting the lack of broad investor participation in the platinum sector.  The PPLT recently held about 5,000 ounces of platinum valued at $79.6 million.  Gold remains the premier investment choice in precious metals but a position in platinum could add some luster to an investor’s precious metals portfolio.

Courtesy – yahoo finance

More on this topic:
Closed Platinum Mines Offset By Stockpile Surplus – Is A Surprise Platinum Rally Coming?

Platinum Soars $78 On Week As Bodies Pile Up In South Africa

Platinum Soars $78 On Week As Bodies Pile Up In South Africa

South Africa continues to be wracked by violence as striking platinum mine workers clash with police.   In a confrontation between police and striking mine workers, a gunbattle resulted in the shooting deaths of 34 miners.

The center of the violence is at the Lonmin mine which suspended most production earlier this week when violence between rival labor unions resulted in the deaths of 10 miners.  The Lonmin mine is the world’s third largest producer of platinum.  South Africa is virtually the world’s sole source of platinum accounting for over 75% of total production.

As discussed in a previous post, the initial strike and violence at the Lonmim mine had virtually no impact on the price of platinum.  The majority of demand for platinum comes from the automobile and jewelry industries, both of which have seen weak demand due to a slowing world economy and outright recession in most of Europe.   In addition, a surplus stockpile of 4.5 million ounces of platinum, representing almost a year’s worth of demand has served to depress prices.

The time to buy often comes when there is no apparent reason to buy.   In “Platinum Perspectives – Time to Buy or Will The Bears Win?“, we argued that the steep $500 per ounce price decline since last year had already discounted reduced demand for platinum as well as the surplus stockpiles. Despite the apparently worsening fundamentals, platinum refused to drop decisively below $1,400 and rallied every time the price dipped below $1,400.

courtesy stockcharts.com

Even more intriguing was the fact that hedge funds had established the largest short positions is history in the futures market.  The crowd was definitely leaning in one direction.  Any news of further supply disruptions or an increase in demand for platinum would force bearish shorts to cover, resulting in sharply higher prices.  That is exactly what happened this week as fears spread that the increasing violence between police and striking platinum miners would result in further mine shutdowns.

Platinum soared by $78 on the week to close in New York trading at $1,479.

Will the unrest in South Africa spiral out of control?  As the world economy continues to get worse, social unrest has spread from one country to another resulting in toppled leaders, bloodshed and civil wars.  South Africa is a potential hotbed for social unrest and violence with a 25% unemployment rate, 50% of the population living below the poverty line and 50% of those under the age of 35 unemployed.

Prior to the violence at the Lonmin mine, miners had been on strike earlier this year for six weeks at Impala Platinum mine resulting in lost production of 120,000 ounces of platinum.  Unless the authorities and mine management can quickly contain the violence at the platinum mines, unrest could quickly spread to other mining operations and throughout South Africa.

South Africa is also a major gold producer ranking 5th in the world.  Although South African gold production recently declined to a 90 year low, annual production during 2011 was 190 tonnes, representing almost 8% of total worldwide annual gold production of about 2,500 tonnes.  South Africa’s annual production of gold declined from 400 tonnes in 2001 to only 190 tonnes in 2011, due to lower grade ore deposits and depletion of existing mines.

Proof American Platinum Eagles can be purchased by consumers directly from the U.S. Mint.  The U.S. Mint recently announced that production of the 2012 Proof American Platinum Eagles will be set at 15,000 coins.  The Mint has been producing the proof platinum eagle coins since 2009.  Initial pricing per coin for the Proof American Platinum Eagles was set at $1,692.

What Precious Metal Has Performed Best In 2012 And Where Do We Go From Here?

After the recent volatility in precious metals, let’s take a look at the year to date performance of gold, silver, platinum and palladium.  The new year started off with a strong rally across the entire precious metals group which erased some of the losses seen in the second half of 2011.

The across the board rally in precious metals came to an abrupt halt in early March after serial dollar printer Fed Chairman Bernanke made comments suggesting that further quantitative easing was unnecessary (see The Flash Crash In Gold).  Gold, which had closed at $1781 on February 28, sold off sharply, losing $136.75 per ounce by March 14.  Silver, platinum and palladium also sold off and are currently below the highs of the year seen in late February.

The precious metal with the largest gain to date for 2012 is platinum with an impressive 19% gain.  Silver is up 12.72% on the year, followed by palladium with a 5.72% gain and gold is now in last place with a year to date gain of 4.5%.

Platinum may be the most undervalued of all the precious metals based on the fact that the platinum to gold ratio is at levels not seen since 1986  (see Platinum To Gold Ratio Plunges – Buy Signal or New Metric?).

JAN 3RD $1,590.00 $28.78 $1,406.00 $664.00
MARCH 19TH $1,661.50 $32.44 $1,673.00 $702.00
$ GAIN $71.50 $3.66 $267.00 $38.00
% GAIN 4.50% 12.72% 19.00% 5.72%

Based on previous history, serious precious metal investors probably gave little credence to Bernanke’s suggestion that further Fed monetary easing was not in the cards.  Indeed, barely a week passed before the Fed Chairman was again discussing a new version of quantitative easing known as “sterilized bond-buying.” The always astute James Grant of Grant’s Interest Rate Observer, dismissed the notion that central bank money printing was about to end anytime soon.  In a recent interview with Bloomberg Television, Grant had this to say.

The price of gold is the reciprocal of the world’s faith in the deeds and words of the likes of Ben Bernanke. The world over, central banks are printing money as it has never been printed before. The European Central Bank has increased the size of its balance sheet at the annual rate of 89%. It’s amazing. The Fed is far behind at only 15%. The Bank of England 67% over the past few months. These are rates of increases in the production of paper currencies we have never seen in the modern age. It takes no effort at all. They simply tap the computer screen.

The full interview with Grant is well worth listening to and can be accessed below.

Where do we go from here in what could turn out to be a very interesting year for precious metals?  Here’s a brief roundup of interesting thoughts and analysis from around the web.

The Golden Trader discusses paper trading and manipulation of precious metal prices along with a technical assessment of gold and silver.

Mint State Gold explains why “all the major signs are showing that the quality rare coin market is starting its long awaiting rally. Let me explain why we could see a 30% move higher by year end.”

Why financial repression should be the focus of investor attention.

US Mint Platinum Bullion Coins a No-Show for 2010

For the second year in a row, the United States Mint did not offer platinum bullion coins for precious metals investors. Bullion products available from the US Mint during 2010 included only gold and silver coins.

The American Platinum Eagle was last available to the US Mint’s network of authorized purchasers in November 2008 when the last 800 one-half ounce coins available had been sold. Immediately following the sell out, the Mint announced the delayed launch of 2009-dated bullion coins, including the Platinum Eagles.

Since that time, Platinum Eagle bullion coins have not been available in any format. When the coins were previously available, authorized purchasers were able to buy the coins from the Mint based on the market price of platinum plus a mark up of 4%, 6%, 10%, and 15% for one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce bullion coins. Of the United States Mint’s eleven authorized purchasers, five are approved to order platinum coins.

Collector versions of the American Platinum Eagle have been available for the past two years in limited quantities. The one ounce 2009 Proof Platinum Eagle went on sale December 3, 2009 and sold out of the maximum authorized mintage of 8,000 coins within a week.The coins were priced at $1,792 each.

The 2010 Proof Platinum Eagle was offered on August 12, 2010 with a maximum mintage of 10,000. Priced at $1,892 each, these coins also sold out in about a week.

Will the US Mint release 2011 Platinum Eagle bullion coins? Or will the coins fail to make an appearance for the third year in a row?

2010 Platinum Eagles Available

The United States Mint began selling 2010 American Platinum Eagles this week– not the bullion coins, but the collectible proof version of the coin.

Platinum bullion coins actually have not been produced by the US Mint since late 2008. The 2009-dated bullion coins were announced canceled as part of a broader announcement, citing “unprecedented demand” for gold and silver bullion coins. There have been no specific updates on the status of platinum bullion coins for the current year.

The one ounce proof 2010 Platinum Eagles are limited to a maximum mintage of 10,000 coins. The initial sales price was set at $1,892. In the absence of bullion versions of the American Platinum Eagle, will this offering have a broader appeal from precious metals investors, rather than just coin collectors?

At the current price, the one ounce proof coins carry a premium of nearly 25% above the current price of platinum. By comparison, a well known bullion dealer has one ounce Platinum Maple Leaf coins available for $1,645 each, or one ounce Platinum Eagles priced at $1,725. These prices represent premiums of 8.22% and 13.49%.

Pricing for the US Mint’s 2010 Proof Platinum Eagle is tiered and based on a weekly average price of platinum, which presents an opportunity to wait for a more favorable price. Assuming the coins do not sell out and platinum prices remain around the current levels, prices for the coins should actually be decreased by $100 on Wednesday of next week. If the price does decline to $1,792 per coin and platinum stays at $1,520 per ounce, the premium above platinum value would be cut down to 17.89%. At around 4.4% more than the premium for random date, bullion quality American Platinum Eagles, precious metals investors may be enticed.

The 2009 Proof Platinum Eagles, which were limited to 8,000 coins, managed to sell out after about a week. The coins now sell for around $2,400 each due to demand from the collector market.

2009 Proof Platinum Eagle

Despite the fact that the 2009 Platinum Eagle bullion coins have been canceled, the US Mint announced their intention to release a collectible Proof 2009 Platinum Eagle later this year. Each year since 1997, the US Mint has produced a collectible proof version of the platinum bullion coin for collectors. Since 1998, the coins have featured a unique reverse design, which changes each year.

The 2009 Proof Platinum Eagle offerings will be curtailed from previous years. From 1997 to 2008, the US Mint had offered a full range of coins including 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz coins, plus a 4 Coin Set. From 2006 to 2008, they had supplemented the offerings with collectible uncirculated coins produced in the same range of individual coins with a 4 Coin Set. At the end of 2008, the US Mint announced all but the one ounce proof coin discontinued.

The design for this year’s proof Platinum Eagle will be an interpretation of the theme “To Form a More Perfect Union.” Early in 2008, several design concepts were produced by the United States Mint and sent to the Commission of Fine Arts and the Citizens Coinage Advisory for comment and review. The CFA eventualy endorsed a design featuring a smal tree with thirteen leaves. The CCAC favored a design featuring four faces representing the diversity of America. The final design choice has not yet been announced by the US Mint.

The 2009 Proof Platinum Eagle has a tentative release date of December 3, 2009. Pricing and ordering information have not yet been announced. Based on a pricing grid used for the 2008 Platinum Eagles, the price of the one ounce proof coin is projected to be $1,692 based on an average price of platinum between $1,350.00 to $1,449.99. If the average price of platinum falls into a different $100 increment, the price would be adjusted accordingly.

Last year, the US Mint sold 5,030 of the 2008 Proof Platinum Eagles. Projected demand for the 2009 coin is expected to be higher, due to the curious circumstances surroudning the coins release. How many coins the US Mint sells may actually just boil down to how many they can produce.

2009 Platinum Eagle Bullion Coins Canceled

For the first time since Platinum Eagles were introduced, the United States Mint will not produce platinum bullion coins. This comes after nearly a year of suspension and uncertainty.

The American Platinum Eagle was introduced in 1997 as the first and only investment grade platinum coin issued by the United States Mint. Sales of the coin began strong, with more than 300,000 ounces of platinum sold in the first three years of the program. The US Mint offered a range of weights to accommodate different investment levels. This included one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce coins. During these early years of the program, the average price of platinum was below $400 per ounce.

As the price of platinum began to move higher in the following years, the US Mint sold fewer and fewer Platinum Eagle bullion coins. Between the years 2003 to 2007, less than 10,000 of the one ounce bullion coins were sold each year. Sales figures finally perked up in 2008, after the price of platinum fell by more than half. After selling more than double last year’s level of coins, the US Mint announced the depletion of their inventory and the delayed release of the 2009 coins.

Last week, the 2009 Platinum Eagle bullion coins were finally announced as canceled. In contrast to the actions of the United States Mint, the Royal Canadian Mint actually revived their platinum bullion coin program beginning in 2009. They had previously canceled the program in 1999, citing low demand for the products. The line was quickly revived this year when the RCM recognized a high level of interest from distributors. Sales of the 2009 Platinum Maple Leaf have reportedly been strong throughout the year.

Despite the cancellation of the bullion version of the coin, the US Mint will offer a collectible proof 2009 Platinum Eagle. These coins are minted for collectors and sold at a higher premium to the precious metal value compared to the bullion coins.

Where are the 2009 American Platinum Eagles?

The year is nearly three-quarters of the way completed, and there have been no 2009 American Platinum Eagle coins available from the United States Mint in any form.

Last year on October 25, 2008, the US Mint had announced the sale of the final inventory of 2008 Platinum Eagle bullion coins. They later announced on November 24, 2008 that their inventory had been depleted and the release of 2009 dated platinum bullion coins would be delayed. Since this date, I am not aware of any communication or update issued by the US Mint with regards to their platinum coin offerings.

During this ten month time period, the price of platinum has recovered from its lows and posted more than a 50% gain. The price of platinum hit its low right around the time the US Mint stopped selling it.

Chart- Kitco.com

This is not the only bullion or collectible bullion coin that the US Mint has delayed this year. Among the list of expected 2009 precious metals coins expected, but still not issued are: fractional Gold Eagle bullion coins, 24 karat Gold Buffalo bullion coins, collectible proof and uncirculated Gold Eagles, collectible proof Gold Buffaloes, collectible proof and uncirculated Silver Eagles, and collectible proof Platinum Eagles. For the missing gold and silver coins, the US Mint has offered blanket explanations about a tight supply of precious metals blanks. (These explanations were posted earlier in the year, when the arguments actually made sense.) There has been no explanation offered for the missing platinum coins.

Incidentally, the Royal Canadian Mint has been selling their platinum coin, the Platinum Maple Leaf, for most of the year. This coin program had actually been suspended after 2002 amidst a lack of demand. The RCM revived the program this year amidst strong demand . Incidentally, this was a coin program that had been suspended since 2002. It was revived in 2009, amidst strong demand from distributors.