First Strike coins are the current hot promotions of telemarketers. Precious metals investors should, in most instances, avoid First Strike coins. This article explains what First Strike are, how they came to be, and the risks they carry.
Most investors seeking information about gold and silver turn to the Internet. There, in a matter of seconds, investors can find numerous websites promoting First Strike coins. Invariably, those websites heap praise on First Strike coins, in efforts to elevating them to genuine numismatic status. However, even a brief investigation into First Strike coins calls them into question.
First Strike Definition
As the U.S. Mint website notes, “Currently, there is no widely-accepted and standardized numismatic industry definition of first strike.” Accordingly, firms promoting First Strike coins use their own definitions and often embellish First Strike with fanciful and sometimes misleading explanations as to what First Strike coins really are.
According to one website, First Strike coins are the first coins struck from a new set of dies and are “often are the most coveted by collectors, having sharper details and even sometimes proof-like qualities.” Yet a reading of the U.S. Mint’s website posting about First Strike coins challenges this definition.
The posting states that the U.S. Mint does not “track the order in which we mint such coins during their production.” In other words, the Mint does not segregate or specifically identify the first coins minted from a set of dies. Further, the Mint does not necessarily ship coins in the order in which they were minted, thereby refuting the assertion that coins labeled First Strike are among the “first coins struck from a new set of dies.”
No U.S. Mint First Strike Program
The coins most often being promoted as First Strike are the American Silver Eagles, the American Gold Eagles, and the new American Gold Buffalo Coins. Here is what the U.S. Mint says about the minting and distribution of those coins:
American Eagle and American Buffalo Coins are not individually numbered and the United States Mint does not keep track of the order or date of minting of individual bullion or proof coins.
If that doesn’t lay waste the notion that First Strike coins are the “first coins struck from a new set of dies,” here’s what else the Mint says:
The United States Mint begins production several weeks before these coins (American Eagles and Gold Buffalos) are scheduled to be released. By the release dates for 2005 and 2006 bullion coins, the United States Mint had already minted approximately 50% of the projected sales numbers for these coins. Any dates on shipping boxes containing uncirculated bullion coins sent to Authorized Purchasers are strictly for quality control and accounting purposes at the United States Mint at West Point. The date on the box represents the date that the box was packed, verified as 500 ounces and sealed, and the date of packaging does not necessarily correlate with the date of manufacture.
Another website defines First Strike coins as “near-perfect specimens produced within the first few hundred strikings in an edition.” However, the U.S. Mint’s postings on its website shows that there is no way for sellers of First Strike coins know that the coins which they are promoting really were among the first coins struck with a set of dies.
Since the U.S. Mint says that there is no widely-accepted and standardized numismatic industry definition of “first strike,” let us move on to what First Strike coins really are.
PCGS and NGC First Strike Coins
PCGS and NGC are the two premier coin grading services, and both have First Strike programs. From the NGC website: For U.S. bullion coinage, NGC designates as first strikes coins that were shipped from the U.S. Mint within the first month of their official release.
Note that NGC does not say that the coins eligible to be labeled First Strike are among the first coins struck but are coins shipped within in the first month of release. Further, here are three sentences on the NGC website that add insight to the First Strike issue:
Collectors have always sought out coins of special significance, and one way that a coin can be distinguished from another is by the date that it was struck. Included in this category are coins of early or first release. A general term for these coins is first strikes.
While the assertion about collectors is probably right, the second sentence illuminates the issue. First Strike coins from the U.S. Mint are really “coins of early or first release.” The final sentence drives the nail home: A general term for these coins is first strikes. The conclusion: First Strike coins are simply “early or first release” coins. First Strike may or may not be the firstcoins from a set of dies.
The PCGS website does not discuss First Strike coins, but does post the U.S. Mint’s position on First Strike coins. However, PCGS, as does NGC, says that for coins to be labeled First Strike, they must be received within thirty days of commencement of shipping (or have documentation that “proves” that the coins were shipped during the first thirty days of a coin’s production.)
First Strike Not Trademarked
Some websites maintain that PCGS trademarked First Strike; however, a search of the U.S. Patent Office’s website does not evidence that, and a search of the PCGS website did not find any claim of having trademarked First Strike. NGC asserts there is no trademark for First Strike and that it is a generic term in the coin industry.
First Strike Coins Not Proven
First Strike Gold Eagles, Silver Eagles, and Gold Buffalos, despite being the most frequently promoted First Strike coins, have not yet proven themselves in the secondary coin market, which is to say there is not a strong resale market. First Strike coins are the present favorites of telemarketers. First Strike coins also are promoted by websites that push any and all “collectibles.” First Strike coins are promoted for one reason: First Strike coins generate greater profits for the sellers.
There are genuine collector markets for items that once were everyday, common items. Old U.S. coins, stamps, and antique dolls are good examples. However, rarely – if ever – have new products been pushed as collectibles and they actually became collectibles. The success – or lack thereof – of Franklin Mint products developing collectible markets is a good example.
The Franklin Mint markets a myriad of “collectible” items, everything from toy cars to Jacqueline Kennedy Onassis jewelry. But, the Franklin Mint’s first products were silver ingots and coins, commemorating U.S. presidents, the fifty states, banks, etc. Today, there is next to no market for Franklin Mint silver coins and bars as collectibles. They liquidate for value of their silver content. First Strike bullion coins may go the same route.
In reality, First Strike is a hyperbolic term intended to cause investors to think that uncirculated bullion coins have greater value than they actually do. It is a marketing ploy, like a laundry detergent being “new and improved.” Investors thinking of buying gold are forewarned. First Strike coins may be only strikeout coins when it comes to gold investing. For more information about investing in gold and silver, visit CMIGS’ website.