Earlier this week, the United States Mint provided the release date and other details for the America the Beautiful Silver Bullion Coins. This new series will feature the designs of the circulating quarter series, struck in 5 ounces of .999 fine silver.
As a bullion series, the coins are distributed through the US Mint's authorized purchaser (AP) network. The authorized purchaser system has been in place since the launch of the American Gold and Silver Eagle bullion programs in 1986. It was viewed as the most efficient and effective method to distribute the coins and ensure that prices are competitive with bullion products produced by other world mints.
The authorized purchaser network starts with a small group of primary distributors who are able to purchase the coins directly from the Mint based on the market price of the metal plus a fixed (silver) or percentage (gold and platinum) mark up. It is the responsibility of these dealers to distribute the coins to the broader market and create a liquid market for United States bullion coins by both buying and selling.
For the present America the Beautiful Silver Bullion Coin Program, the premium paid by the Mint's primary distributors was set at $9.75 per coin. This is a reasonable amount considering the premium for the one ounce American Silver Eagle is $2.00 per coin. The start of the new 5 ounce silver bullion coin series also required the purchase of a new coining press and other costs related to testing and development, which the Mint would need to recoup through the premiums.
The maximum mintage established by the US Mint for the first year of the series is 33,000 bullion coins for each of the five designs, for a total of 165,000 coins. Each primary distributor will have an allocation of 3,000 coins per design, for a total of 15,000 coins.
This total of 165,000 coins, or 825,000 ounces, is a relatively small amount compared to overall silver bullion sales. In the latest month, the US Mint sold more than 4.2 million ounces worth of American Silver Eagles.
Realizing the high demand for the new series and the limited quantity available, the US Mint urged their primary distributors to keep their prices at reasonable levels, stating in a memo:
Because the United States Mint was only able to produce and make available a limited quantity of each these silver bullion coins in the relatively short period since the authorizing legislation was approved, we anticipate that demand for these coins will be significant. Accordingly, as Authorized Purchasers of the United States Mint, we want to remind you of your commitment, under your Authorized Purchaser Agreement, "to maintain buy/sell premiums for the United States gold and silver bullion coins with as narrow a spread between buy and sell prices as prudent business judgment permits. These premiums are to be competitive with those charged for other bullion coins, considering prevailing market conditions." Although the United States Mint has no control over the fair market value of these coins once they reach the secondary market, we anticipate that our Authorized Purchasers will carry out the United States Mint's objective to market these silver bullion coins in a manner which ensures that that they will be available, accessible, and affordable to all members of the public.
The authorized purchasers (primary distributors) who are able to buy bullion coins directly from the US Mint include the following companies. (Note, this listing may be slightly out of date and includes only the US based dealers):
- A-Mark Precious Metals of Santa Monica, CA
- American Precious Metals Exchange, Inc., of Oklahoma City, OK
- Coins ‘N' Things, Inc., of Bridgewater, MA
- Dillon Gage Inc. of Dallas, TX
- Fidelitrade, Inc. of Wilmington, DE
- Jack Hunt Coin Broker, Inc., of Kenmore, NY
- MTB of NY
- Prudential Securities, Inc., of NY
- Scotia Mocatta of NY
- The Gold Center of Springfield, IL
Not all of these companies deal in retail level transactions, but rather purchase the coins for resale to other bullion dealers and coin dealers in large quantity. At these subsequent levels of the distribution chain are where most consumers will purchase their bullion coins.
One of the primary distributors that does sell directly to the public has set prices at the equivalent of about $130 per coin above the market price of silver. As the first coins available for direct purchase from a primary source, perhaps this will establish the starting point for market prices, which may eventually spiral higher. But are prices nearly 90% above the price of silver "competitive with those charged for other bullion coins"?
The United States Mint plans to release numismatic versions of the 2010 America the Beautiful Silver Bullion Coins during the first quarter of 2011. Although the maximum mintages will be lower at 27,000 per design, as numismatic products they would be sold directly to the public at fixed prices established by the Mint.
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Perhaps a boycott of APMEX is in order?
Went to buy these at AMPEX and they had 10 left. As I started the check out process it went to 5 left. As I finished the process they were all sold out and I missed out. YIKES! People are loading up on this sucker.
By they way, if a PCGS PR70 First Strike Yosemite silver quarter is $225 on ebay and other auctions, then what is this 5oz Yosemite when it is slabbed PR70 First Stike with 1/10th the mintage?
make that MS70 Firt strike, sorry.
I think it is disgusting that APMEX is an AP and has marked these up 90% above the price they will buy them from the US Mint at. I hope the US Mint will examine their behavior as well as any other AP’s that are gouging their customers and consider rescinding their contracts or penalizing them in other ways. This is pure market manipulation, and while of course it goes on in any free market, the whole idea of having the AP’s out there is they are supposed to distribute the bullion fairly and at fair prices to the end consumer!
Shame on you, APMEX, shame!
They are saying on their site they sold 1,000 sets of these in 19 hours.
I have purchased from APMEX in the past. I will now reconsider any future purchases from them.
Well, it seems to me that the “reasonable” fair market price is the price that people will pay. Apparently people are willing to pay a 90% premium.
The mint’s plea is nothing but more government intervention..exactly what we DON’T need.
“Fair Market Value” is one issue and maybe defensible since buyers are obviously willing to pay the price Apmex has set. The second requirement- “These premiums are to be competitive with those charged for other bullion coins, considering prevailing market conditions” in my opinion is not being met. How is a markup of roughly $26 an ounce consistent with other silver bullion coins Apmex is selling? Would anyone here pay over $55 each for bullion silver Eagles with silver below $30 an ounce. I am not generally a fan of government overregulation, but I would like to hear how Apmex justifies this markup as competitive with the markup on other bullion coins.
Look at the housing market as an example. It is what people are willing to spend that sets the market price. Your concerns about price should be directed to the consumer not the seller. Spend wisely.
I’ve spent quite a bit of money at APMEX over the past few years. I’ll now be shifting most of my future purchases to other dealers. Provident Metals and Gainesville Coins are two dealers that will be getting a lot more of my business. Provident is actually quite a bit cheaper than APMEX for ASEs.
This is ridiculous that a company selling these coins is charging 90% above the market price for silver. This is process-gouging at it’s best. And anyone expecting that the U. S. mint is going to give more than a seconds earth of thought or concern for this matter is either the most naive person ever, or simply a first-class moron. Once again, the small collector gets the short end of the stick.
Joe…Good luck on the APMEX boycott. ALL 1,000 five piece sets SOLD OUT in 19 hours. The sets went for double the melt price for 5 ounces.
The market will probably bear an even higher price, but the main problem is that the authorized purchasers are granted an oligopoly. In this particular instance, the status is being used to command a ridiculous premium for a bullion coin.
Yes, these are bullion coins, and despite the low mintages, the primary distributors should treat them as such.
Bob…I think you would have to place these 5 ouncers in the proof category. The rarity alone fuels the demand. Yes, people pay $55.00 for a one ounce ‘proof’. My disappointment with Apmex is that they were SOLD OUT before I found their notice. I placed my name on the Stand By list on September 29th. My yahoo account, where notification was to be sent, never received the message.
I agree that collectors should boycott APMEX. I too have spent a lot of money with them in the past, and they will never get another dime from me. They are taking advantage of their new status as a Mint distributor.
APMEX may regret their decision in the long-run. They may have made a 90% profit overnight, but they are losing the good will and business of lots of collectors who are angry about their decision to jack these babies up and force people to lay down $1400 for a set. Sure you can charge whatever you want, but there are also consequences to such a decision that may not be forseen.
Call it government over-regulation if that makes you feel good, but APMEX’s actions are in clear violation of stated Mint policies. It is a privilege to be a Mint distributor, and that privilege should not be abused. Anyway, people who are paying $300-500 per coin may not be very happy when the collector versions come out next year at what I expect to be much lower prices than what APMEX did to distort the market. The bullion versions will go up in the short-term and then the prices will probably crash. Remember the anniversary eagle sets that reached $700 from $100 but then crashed to $300 where they remain? I mean, seriously folks, how much upside do you expect if you pay 2-3 times melt? I will wait for the collector versions, which will be in even lower numbers anyway. Given the Mint policies stated above, they clearly won’t be able to charge these kind of premiums, and if they did, that would surely be grounds for investigating the Mint. Sometimes government action is useful.
I don’t blame APMEX. There is enough wiggle room in the mint decree for them to set whatever price they want. The Mint knew they produced a rarity, and even commented that the demand would be great. The Mint should have set a limit of 20% markup, for example, and limits on the number that one person/business could purchase. The people buying at 20% markup would then jack the price up instantly to its current level, but at least collectors would have had a chance at buying at a reasonable markup initially.
Anyone who is defending APMEX’s actions on this issue just doesn’t get the point. I’m all in favor of the free market system, but this scenario is not part of that free market system. APMEX has a contract with the Mint that allows them to receive these “coins” from the Mint with the expectation that they in turn will make them available at prevailing market rates of similar products. If this is where they were supposed to be priced upon their initial release to the public, then why wouldn’t the Mint charge the exorbitant premium to the dealers and let the profit go back into the public coffers, instead of it going into the coffers of a private company.
If APMEX buys coins on the secondary market than they can charge whatever they want for them upon resale. But in this situation they clearly took advantage of us, the taxpayers.
Megiddo, as far as rarity and demand I agree with you on those things fueling high prices as the current market value. The fact remains though that these are bullion issued under the Mint’s bullion programs, so in my opinion the Authorized Purchasers should abide by all of their agreements regarding such items. I would still like to see Apmex respond to the point that was raised earlier, ie “premiums are to be competitive with those charged for other bullion coins.”
In my opinion, complying with operating agreements which already exist, and any questions of appropriate regulation or overregulation are different issues. If an agreement is in place, all parties should honor it. Again just my opinion, but in a situation where it seems not everyone believes that is the case, some clarification from Apmex and/or the Mint would be good.
Thank you for your clarity, Dave. That’s it exactly. They are abusing an oligopalistic privilege they were granted. I really feel strongly that they should lose their status over this behavior. Not to mention that the Mint screwed up big-time. If they thought they were giving collectors a Christmas present by creating an instant rarity, they seem to have not understood that the benefit would accrue to APMEX and e-Bay flippers, not those of us that are collectors. Just wait for the 27,000 mintage versions next year, which will be cheaper and have better potential.
Those of you who are angry at APMEX, I encourage you to contact them directly. On their web site you can send them comments, or you can e-mail them directly.
The mandate was pretty vague. Therefore, APMEX was really able to price the 5 oz. pucks however they wished. I wouldn’t be surprised to see some sort of backlash however, from the mint, as there are tons of upset people.
Though I blame APMEX, the US Mint bears some of the blame as well. They took forever to get their act together in producing these coins. For whatever reason, they were only able to produce 33,000 of each coin. By law they had to be released, and to the dealers. Combined with low mintages, beautiful designs, large & unique size, and the general demand for silver, these “bullion” coins became numismatic pieces right off the block. APMEX, with glee, saw the opportunity to mark these right up, and they did.
Still, these seemed destined to be the keys to the series. By the look of the 2011 designs, this looks poised to be one of the best series’ the Mint has ever produced (far better looking than drab presidents and their spouses!). Suck it up and jump on the bandwagon if you can. Hopefully the 2010 numismatic releases will oddly be more affordable, and the 2011 bullion releases will be just that–bullion.
I will never buy from APMEX again due to this price gouging. Lot of people thought highly of them but alas no more.
My family and friends will not be back either
APMEX totally ignored the mint’s direction to Authorized Purchasers because they couldn’t stop their greedy little brains from feeling like they were losing stacks of $$$$ if they priced these the way the mint wanted them too. If the mint made 100,000 of each, APMEX would have only been able to charge $30 over spot. They charged $120 over spot pocketing an extra $90 per coin and they had the nerve to tell customers that they were giving them a deal since they can sell them wholesale @ $1500. I’ll wait for the mint to release the numismatic version. That way I can get it direct without APMEX getting their greedy fingers on it and lining their pockets first. The premiums on these bullion versions will always be less than the numismatic versions anyway.
At least Apmex sold the coins directly to the public. My guess is the others will not and so other secondary dealers will mark these up and then so we will have another middleman in the middle who will pick out the best proof like coins for themselves and leave us the low end at high mark up.
Thank you Apmex for going direct.
These coins will be the rarest ones of the decade.
I plan on at least a ten to twenty times profit….
Steve, you are a master pumper. 20 times profit, give me a break!!
as i keep saying. buy only direct from the mint. do not buy from dealers. you won’t get proof 70 or MS 70. only the dealers gets it.
at 33,000. mintage for five ounces is really a lot. look at history of five ounces. mintage for many issues are less than 5,000 pcs.
I feel that it is perfectly fine and acceptable for the companies to mark up these coins as high as they want too,,,,
people would not complain if they bought them direct from the mint and then they rose in value on the secondary market after they aquired the coins,,,,,, in fact that is what most people hope for when they buy a coin,,,,
restricting the ability of a coin to naturaly appreciate in value is just fine with me,,,,,
and obviously if the coins sell out that fast,,,,,,, at a marked up price,,, then they will probably be resold again on ebay for a bit more by some of these purchasers,,,, if you get your coin from one of these people,,, then you would be paying a fair market value,,,,,
nobody is forcing you to invest in modern massproduced numismatics,,,,
i personaly recomend to friends and family to allways buy generic silver bullion for lowest current market price,,,,
and if you just have do have a certain coin ,,,,, to get your mental fix,,,,, then buy the occasional coin that makes you feel good,,,,
or just wait a coupple of years and most current issue numismatics (more than 95% ) will drop signifficantly in value (excluding the value of any precious metal content)
dont begrudge someoneelse of making a fine proffit,,,,,
if you expect one yourself someday on some of your own deallings…
I had a IM alert notification set with APMEX for over a month and didn’t get my notification that my order was available to be be filled. I won’t use them ever again and will be letting them know that in no uncertain terms. There are to many other vendors out there to be screwed like this and let is slide.
People who say APMEX just took advantage of the free market are wrong. It is not a free market with APMEX being just one of 11 dealers allowed to buy. SInce they didn’t follow the mint’s rules they should lose their status. But I bet one of the trial lawyers out there will open a class action suit and get all the buyers a refund.
I don’t have a problem with the APMEX price if their buy price on these is set at the same buy/sell spread as other bullion products. So if their typical buy/sell spread is say 5%, then they should offer to buy these at $1395 less 5%.
Gainseville now has these at $1700 a set. They say they will not have any tomorrow.
Well…I guess I wanted a set pretty badly. I got mine from
Gainesville @ $1500…one of the first sets out the door!
Not to bw obvious, but the mint limiting the markup will have the same effect as ticket scalping. The teams made their own subsidiary “ticket brokers” who they sold all the premo seats to. The store front scalpers went ballistic, but there was nothing they could do. Seems like the only way to beat this is to become a primary dealer yourself. By the way, remember the 20th ann. silver eagle reverse proof. The prices went to about $600 right after the start of sales. Now you can get on ebay for $350 ish. But they had a 100k of sets vs 27k. Supply and demand!!!
News Flash! The mint has halted the release to the APs! Check out the fresh print on the “Home” page, here….
No such thing as “First Strike” or “Early Release”.
Let the scammers trade them back and forth. 5 oz’s of silver is only worth only 5 oz’s of silver!
FROM WHAT I BEEN SEEING APMEX IS THE CHEAPEST,SO WHY IS EVERY ONE ATTACKING THEM??????????????????? WHAT ABOUT THE REAL CROOKS???
Supply and demand people. Only 33K of each coin made, and hundreds of thousands who would like to get their hands on them. If the government wants to set the price, then they should sell them directly through the mint like they do with numismatic issues. These coins are no longer bullion in my opinion, they have quickly made the jump to having numismatic rarity value well above the price of spot. All the government has done by suspending is to make the market that much more aware of the rarity of the items. APMEX had the best prices around, and wish I could get them for the 1200 price they were asking for the set. Secondary prices are already 200% more then that at the moment. I hope the mint resolves this fast. I have wanted to have the chance to buy one of these sets all year, and wish I could of bought one from the price gougers on Monday while they were still around.
I think the Mint should not let even one of these out there door, the bullion dealers should refund any payments they may have accepted as pre-payment, and the Mint should be the only ones to sell the ATB 5 ouncers. ALL of the bullion dealers were to treat these as other bullion coins with like markup, and they ALL blew their chance. Even Apmex’s prices were too high as compared to other bullion products. The only fair thing to do is to revoke ALL sales by bullion dealers, and let the US Mint set the price and make the sales.
AS IT STATES ABOVE: “These premiums are to be competitive with those charged for other bullion coins.” They blew their chance!
All you free market people are utterly clueless. This has ABSOLUTELY NOTHING to do with free markets. There are a very small handful of mints/coin stores that can buy directly from the US mint and as many on here have already stated, those dealers are obligated to stand by the authorized purchaser agreement. This fiasco was CLEARLY a violation of that agreement and the US Mint halting everything clearly shows that this was in fact that case. Again free markets have absolutely no place in this discussion. If we were talking about a dealer that wasn’t an authorized purchaser then it would be a completely different ballgame as they do have the right to sell at any price they see fit. Authorized purchasers do not.
I have been buying from APMEX for a very long time and have dumped at least 125,000 in their coffers. I just purchased 2 monster boxes from them back in early September and that will be my final purchase with APMEX. I am taking my business elsewhere regardless of the BS excuses we hear coming from them at this point. They know damn well they were in the wrong. If they had just come out and admitted that….well, I might still consider myself an APMEX customer. The fact that they tried justifying their position in this fiasco is nothing short of pathetic and ultimately it was the last straw for me. Again I am taking my business elsewhere as many other are clearly doing.
All in all I think this will make the US Mint take a good hard look at their current system and make the appropriate changes so this could very well well wind up being a good thing. If I were the US mint I would show APMEX the door, the non authorized user door.
Bye Bye APMEX. It was good while it lasted but there are just too many dealers out there to put up with this kind of behavior. In the end you screwed yourself and you can lay the blame right at the feet of your greedy owners.
Dillon Gage’s website announced that they would start selling the ATB bullion coins on Jan 16th but when I called today (1/7) for full details they told me that they have been taking reservations and all were accounted for. So how come that information wasn’t posted on the same website??? Looks like the dealers will be the lucky few to make a killing on the premiums.
I called APMEX every day in Dec. and was told to call back for more info until finally they told me they sold out. Same thing with from another AP but I forgot which one as I keep scratching their names off my list.
The mint told me to call this number to complain 202-354-6829 but it had a recording. Last hope will be from the mint for the collector’s version as long as they don’t delete any orders again.