looking at the actual numbers of surviving Canada 1912-1914 gold coins I think that it is safe to say that the series is a scarce subset of the gold coins released before the advent of fiat currency policy in Canada..After the melting of the approx 215K survivors there is still in existence approx 414K of the original 660K gold series of 1912-1914....In comparison the total Dominion Gold sovereigns during those 3 years alone was approx 80 million pieces...not including the half sovereigns! Therefore it would seem that the MS pieces especially should continue to rise in value way beyond the bullion spot price unlike the MS sovereigns which are still mostly priced according to spot......There are a lot of great deals on this series for the numismatic gold investor because a lot of sellers are still factoring in spot price in their decision to sell which is a bit short sighted in my opinion.....In the final analysis I dont think the BOC release of 30K mostly MS coins will hurt the market price at all in the medium term...its a good time to buy these coins at cheap prices right now....
there is still in existence approx 414K of the original 660K gold series of 1912-1914
I agree with everything you write except it's unknown how many gold coins are presently in existence. The 414k assume none were ever melted in over 100 years. Considering it's often estimated less than 25% of silver coins from the same era remain, it would be more than likely the same fate was met by the majority of gold coins as well. Gold prices have historically reached peaks far higher than silver. Regardless if they were in private or government holdings, there's no way of ever knowing.
definitely I agree there would be a loss to the melting pots but I think my main point is that the MS coins in particular are a great buy right now..prices are low and demand is low..i dont know why this is ...maybe its the post release burn out .....those that could afford it loaded up a few years ago and moved on to other issues..These coins are undervalued and despite the low mintage buyers are reluctant to pay much more than spot for them..This is a great time to buy despite the weak Canadian dollar......I just looked at a 1912 10.00 MS 62 for sale on ebay for 1000.00 USD..to me thats a great buy..and the seller will even take an offer...thats what I mean..The melting of that remaining 215K gold hoard is a decisive factor in this series and pretty much insures the viability of the scarcity of this historic issue. In the medium to long term that is......
Yes your example is valid particularly with consideration to current values of high end silver coins of the same period, plus taking into account the added value of gold. The only reason I can think of, as Canadians, we're solely focused on silver as the object of coin collecting simply because it forms the vast majority of our coinage. 7 years of Cdn minted sovereigns, 3 of gold coins, so little of it, it's as if it's simply overlooked from existence.
The BOC stuff has been around for almost two years plenty of time for market place to digest, there is no real demand, only the top two good graded coins in each year will garner much interest. The market place rarely lies about value, as I've been saying you just can't add 30,000 units and not interfere and drag down the market.
I agree and have concluded that the best reason for the low demand for BOC gold coins could be the fact that most gold coin buyers wont spend much beyond gold spot for any recent issue within the last 150 yrs... ..even lower grade ancient gold coins which are very rare often get priced according to bullion value. This is the historic pattern of gold value which is why it is said that gold is money...Most of the RCM gold releases descend into the spot value over time....no matter how few are minted..at todays spot high of 1280 usd a 10.00 coin has about 619.00 usd melt value and a 5.00 has 309.00 usd melt value..The fact that the govt melted the hoard at this time must indicate something about the way they see the gold price going....although right now it seems on the rise.....our govt seems dedicated to the elimination of gold as money....
Ottawa sells off almost all its gold reserves, leaving just 77 ounces — or less ".......Ottawa's gold holdings peaked in the 1960s at more than 1,000 tonnes. But the government has been steadily selling off its gold holdings ever since. By 2003, Ottawa was down to 3.4 tonnes, which it has now almost entirely sold." http://www.cbc.ca/news/business/gol...es-1.3475818
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The Govt of Canada has never been required to disclose the physical form (bars, sovereigns, $5/$10, etc) of the total gold holdings in the Exchange Account. But considering the existence of the 100 year old gold coins being disclosed merely the 11th hour, it's most likely many met the melting pot long before that. Select past and present government employees were obviously aware of the existence gold coins, it's more than likely the last minute disclosure was motivated by fear of bad publicity over destruction of Cdn heritage.
The most recent round of melting/selling of the hoard is insignificant when compared to the long term liquidation of Canada's gold holdings in general.
Perhaps of interest, much of our Reserve Fund to back our currency now consists of US dollars. On a percentage basis the US is #1 in gold holdings supporting their US dollar. https://www.fin.gc.ca/purl/efa-eng.asp
(Considering our lowly loonie, it has become obvious how greatly our dollar is backed by oil.)
Edit: DBM just noticed you posted the same link. It's interesting that recently the media has written quite a few articles on the topic of Cdn's depletion of gold reserves.
Our dollar trades on trust and basically on key economic indicators, the same problem affects every other currency like the Aussies and everyone except the US dollar which just happen or luck out as the measurement stick for all others, gold reserve has very little to do with the strength of our dollar.
So,the gov't has sold it's gold reserves on the basis of that currencies are no longer backed by gold.
Almost unreal to imagine that individuals may be holding more gold than their respective government . . . However, the mint ( a government entity) is still producing gold coins. I wonder how much gold they have to have in stock for doing this.
Kind of odd that a government makes a decision that gold is not worthwhile as an investment for a country yet has a mint selling gold coins to its' citizens because they feel it is a good investment. Strange times . .
Excellent observation Aghawk. Every time I see one of those gold Superman coins is makes me wonder where that gold came from. Buyers of such don't quesion paying a high premium over bullion from a Cdn crown corporation in exchange for NCLT bearing the image of an imaginary character.
Another point from the above noted link, notice the specifics of the remainder of gold coins is not disclosed.
"In fact, Ottawa still has 77 ounces of gold, worth about $130,000 Canadian at current market prices. All of that consists of gold coins, as opposed to large bullion bricks that the government once hoarded."
I just remembered a skit that Rick Mercer did in the Royal Canadian Mint - quite funny - and they mention that their stock of gold is about 600,000 ounces . . . .
Here is the video:
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Posted 03/03/2016 11:51 pm
So,the gov't has sold it's gold reserves on the basis of that currencies are no longer backed by gold.
