Gold Proofs & Collectors Coins and Sets Now Bargains
Many gold proof coin sets & individual, collectors gold coins are currently at low premiums & therefore at bargain prices after gold bullion price rises.
Gold Bullion Prices Up - Proofs Set to Follow
Substantial increases in gold bullion prices during 2005, from £225 to over £300, and from $425 to over $540 means that mints prices for new proof and commemorative gold coins will need be much higher in 2006, but older sets and previous issues are still at historic bargain prices, as their prices have not yet caught up with the price rises.
The bullion price has risen by 27% in US dollar terms during 2005, and by over 33% in pounds sterling, yet most of the collectors gold coins we well are still at the same prices as they started the year, and some are even lower! Writing this in December 2005, we ourselves are trying to understand why this has occurred. While we cannot be certain, we can try to theorise or take an educated guess, although there is no certainty that our theory is correct.
Premiums and Supply - Demand Balance
Proofs sets are usually issued at high premiums, often at least twice the cost of their underlying bullion value, and up to about 21/2 times. Most buyers, sellers and dealers don't base their prices on the value of the intrinsic gold content, but rather on the original issue price, or recent sale prices. Investors tend to buy gold bullion coins which are sold at low (single-digit) premiums, and ignore proofs because they expect them to be too expensive. While this is often correct, after substantial bullion price increases, the premium over gold gets eroded to the point where some collectors coins can be bought for similar or even lower premiums than bullion coins. It is also likely that potential sellers, seeing or hearing about the higher gold prices, decide that now is a good time to sell collections while gold is high. With more sellers and no more buyers, the supply - demand balance shifts. We don't know what other dealers do, but we are always quite happy to allow our stock to expand when goods are readily available, but we do tend to lower our buying prices slightly with every purchase which increases our stock even more. Conversely, when our stocks run low, we increase our buying prices. We also adjust our selling prices to try to balance our stocks, lowering them when we have large surpluses, and raising them to keep up with the market when our stocks are low and demand is high.
New Issues Will Raise Prices & Awareness
Mints, such as the Royal Mint, have increased most of their gold coin prices during 2005, but only by small amounts. For example the Royal Mint's prices for 2005 proof gold sovereigns have increased from £139.95 to £144.95, an increase of only 3.6%. Their price on the four-coin gold proof sovereign collections (£5 to half sovereign) have increased from £995 to £1,025, an increase of only 3%. Incidentally, our prices are still only £135 and £895 respectively. This last price increase already applies to the 2005 sets from the Mint's modest September price increases.
As we approach 2006, mints are starting to disclose their 2006 prices, and we can tell you that the Royal Mint's prices on 2006 proof sovereigns will be £165, which is a modest 18% increase over last year's original price, and for the 4-coin sets will be £1,055, which is only a 6% increase. The Mint used to offer a special pre-release price on the set, which we guess may be discontinued or less generous this year, and we also believe they will reduce their dealer discounts, possibly to stop dealers like us from offering them at discounted retail prices to collectors. We have already heard that at least one major distributor is planning to boycott the 3-coin sovereign set, and other issues during 2006.
Where are the Bargains?
All of our gold special offers are listed on our Special Offers page. This page is updated regularly to reflect our best deals at the time.
If you look at our index page of British 4 Coin Sovereign Sets, you will see that the earliest years are at much lower prices than the recent years, and in general, prices slide upwards towards recent years. Although this is partly because of the high mintage of 1980 and other early sets, it is also because it takes some time for sets to become available on the secondary market. the 1980 sets are only about 10% above bullion prices, which makes them an absolute bargain in our opinion.
Another bargain deal are the Proof Gold Pound Pattern Sets, which are also only about 10% over bullion prices.
Proof Gold Crowns and BU Five Pounds are also at January Sale bargain basement prices.
In addition, there are many other world gold coins, including proofs, and proof sets, which are all currently almost incredible deals.
New - Buy / Sell Prices on Gold Sovereign 4 Coin Proof Sets
We have recently created a new version of our original Proof Sovereign Sets page, with buy and sell prices quoted.
2001 Proof £5 Crown with Reverse Proof Finish
British Gold Sets Information