American Platinum Eagles
Platinum buyers have made Platinum Eagle coins the most popular platinum bullion coins in the U.S. Platinum Eagles were first minted in mid-1997, and Platinum Eagles were an immediate success, with the Mint turning out 53,000 1-oz Platinum Eagles in a shortened minting year. In 1998, 133,002 1-oz Platinum Eagles were minted, and Platinum Eagles were off to a roaring success.
However, when Platinum Eagles were introduced, platinum was trading only a few dollars above the price of gold, and many gold bullion buyers bought Platinum Eagles instead of gold bullion coins. Nowadays, it is a different story.
Platinum's high prices have effectively destroyed investor interest in Platinum Eagles. Through September 2004, less than 5,000 1-oz Platinum Eagles had been sold, and because of the lack of demand distributors sometimes do not stock current year coins. Platinum Eagle buyers usually have a limited selection.
Platinum Eagles are .9995 pure and come in four sizes: 1-ounce, 1/2-ounce, 1/4-ounce, and 1/10-ounce. The face values are symbolic but make Platinum Eagles legal tender coins. Just like their sister Gold Eagle coins, Platinum Eagles sell at prices that reflect the intrinsic value of their content, not their legal tender values.
Platinum Eagle Premiums
The premiums on current year Platinum Eagles are much higher than on backdated Platinum Eagles, for a simple reason. The U.S. Mint sells Platinum Eagles at markups that enable the Mint to sell Platinum Eagles at a profit. If there is significant selling in the secondary market, the Mint does not lower its prices to be competitive.
Further, the Mint sells Platinum Eagles at a percentage markup over spot. This means that the higher the price of platinum goes, the higher the markup in absolute dollars. When platinum was $400, an 8% premium meant a $32 markup. At $800, an 8% premium adds $64 to the price of a 1-oz Platinum Eagle.
As can be seen by looking at the Retail Premiums column in the table below, the smaller coins are marked up even higher. The Mint's pricing policy has caused many investors (and coin collectors) to lose interest in Platinum Eagles.
Finally, platinum's high price has meant significant selling by investors who bought Platinum Eagles years ago. This selling, plus the lack of buying, means a big drop in the premiums on Platinum Eagles. Sellers can expect to receive less than spot; and buyers (The few that there are.) pay much lower premiums than on current date Platinum Eagles.
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