Assuming over the next 10 years, spot silver doesnt move, say $32 an ounce. Looking at Series 1 Lunars for guidance, it would seem to me that there are finite values for these coins. I see the 2010 Tiger and 2009 Ox for example can fetch up to $80 on feebay. I would have thought that assuming silver remains at $32 an ounce, these two coins would not sell any higher than about $80 a coin in 5 years time. If you look at Series 1, they all have much smaller (usually a third) of the mintage of series 2 but most of the coins you can get for around $80 each even though some of these coins were struck 10 years ago. So, my theory being, the risk/reward of holding Series 2 Lunar coins that have the highest premiums (Tiger/Ox) past $80 each isnt worth it. There is very little upside past $80 over the next couple of years and the risk they will fall out of favour and go to like $60 each. Your main hope for these higher priced lunars would be that spot silver rises but if that's your investment view, you'd do better to cash out of your high premium lunars and buy silver bullion. Agreement? Disagreement?
I somewhat disagree. While there is a higher mintage, it is still small in comparison to many of the coins produced today. They are also part of a very popular series, which is why we see the premiums now. But looking at the long term, the longer they float around, the more likely they are to get mishandled and damaged, which will create a demand for high quality coins, and higher prices for those coins. Also, once they are added to permanent collections, there will be less in circulation. Not to mention that each new coin in the series is likely to create a demand for the previous coins for new collectors (take the spike in prices before and shortly after the dragon was released). Also, I've seen many silver investors turning to series like the Lunars and Pandas to minimize the effects of spot price fluctuations since both of these series perform well despite the spot price of silver. If this continues, demand will stay strong and I would suspect prices to have solid support. I would definitely not sell my Lunars to buy generic bullion as generic has little to no premium appreciation potential unlike a collectible series with limited supply.
I believe the assumption above will hold if the metals investor pool stayed the same and that fiat held the same value. Most of us on here believe there will be a lot of change over the next 10 years. 300k mintage is 3 times more then series 1, but at the same time, how many more people (sheeple) convert from non-stackers to stackers? Factor of 3,5,10?? I still believe in buying lunars at issue price or as close to spot as possible. In 2010, premiums on 1oz lunar coins were $5, the dragons were released at $8 premium. I don't know what the premiums are now for lunars, but I feel that its around $10-15. Every September from 2012 -> 2019 will be hell now, stackers just want to complete their sets and multi sets. I think the idea is to buy up as much as you can for reasonable price and trade it up later. Slam
we may see advanced completion on lunar series 2 before 2016. may be by end of 2013 PM can be making 2015 Lunar Goat already... or else we may have incomplete set.
I think we don't understand the demand and supply cycle really well. For example, we usually assumed that the smaller mintage of series 1 means smaller supply, and should command higher premium (than series 2). But there are factors which should explain otherwise. Off my head, I can come up with 3: 1) The entire series 1 (silver) runs from 1999 to 2007, in a period of time where silver investment & awareness were dormant. Majority of silver bugs who has started riding on the silver train emerged later and would have caught on series 2 (and others) instead. (A factor which limits the demand of series 1, given that supply is fixed). 2) Series 1 has run it's full course, it's pure change of hand now, whereas we are not even half-way through series 2. Future silver bugs, given the impression of "they are still early (in series 2)" would further increase the demand, and create a tightening supply of already released series 2s. (A factor determining the demand of series 2 which has yet to be fully unfolded). 3) The third point, based on my personal bias, is that series 1 was released with a wrong "order" (starting from year of the rabbit in 1999). IMHO, I think that series 2s should have a life of it's own. At best, only indirectly influenced by the price discovery of series 1s. My 2 cents, Revlisify
Yeah, tell me about it. I started to collect rolls, good luck to me especially if silver really does go to the moo...
I am getting a roll of each year of S2. The idea is not to sell them as individuals, but sell as full S2 sets when they're complete
I reckon there will be so many complete S2 sets come 2018 that you'd do better to sell off as individual coins. The S1 sets are more difficult to come by as they had lower mintages and less people stacking/hoarding them compared to now.
As for S2 premiums at the time of their release, spot +100% (as per the dragon) is no longer competitive in my view. Thats a lot of premium built in and the risk you run is that if the interest in the series fades (and so goes the premiums) and also that another mint, like PAMP is doing, runs out a yearly lunar coin as well. If others start doing what PAMP is doing then there will be competition for the "lunar dollar" and I'd expect to see prices take a trumble.
As for the next release in September, the Snake, I wonder how the mint will approach allocation for that coin? Will they use this years method which was [what you ordered the year before you get this year] which based on the Dragon allocation will mean apmex & co will get the lions share and so they can gouge prices to 330% of spot and nothing left for Aussie dealers again? Interesting to see.
I think the thing people miss about the premium coins are peoples attitudes when they start learning and wanting exposure to PM's. If i think about my own interest, it started with thinking that gold and silver were a hedge against the uncertainty of fiat etc etc. Initially the idea of paying anything above the spot price repulsed me! It is only as I've learnt more about the various coins, paying various premiums in certain circumstances seems acceptable. However, my view is still is to limit premiums as much as possible. So the question is, if and or when the masses begin taking an interest in PMs, do you think they're going to buy high premium coins which can be 2x spot? If so, then high premium coins are a good idea. If not, i think you want to be levered to spot as much as possible, thus keeping premiums down. I think auspm is spot on to a large extent. Cheers
Less risk in ounces obviously if price rockets, buy who really knows what drives premiums? I think it makes sense to have a small portion in premium coins, but not majority by any means.
I think it is very hard to predict such things , espescially assuming silver will be the same spot price in ten years, i would also be very careful in selling your high quality lunar series coins to buy cheap bullion. EXAMPLE when i first bought the lunar series 1, 2 oz tigers spot was about $12 I paid about $36 for the 2oz tigers , I thought the same way nobody wanted them then so I sold most of them for around $40-$45 using the same logic that I would buy silver eagles and rounds for about $14 per ounce. Well today I see the ser.1 2 oz tigers go for about $275 and the silver eagles for about $35 so the tigers went up about 800% and the eagles went up about 150% ...You never know for sure but that is the way I see it
Depends if you're playing for a shorter term movement in relative values or a longer term view that FIAT will be replaced at some point.
