A new article on Panda coin--"The Coin Analyst: China Strives to Make

Silver Pandas as Popular as American Silver Eagles

March 20, 2012 5:14 PM
http://www.coinweek.com/bullion-rep...-pandas-as-popular-as-american-silver-eagles/

by Louis Golino for CoinWeek

Each year modern world coin collectors eagerly await the release of the latest Panda coins from China, which are made in silver and gold.

Even more than is the case with other world releases, one ounce silver Pandas attract the interest of both bullion buyers and numismatists, including those who are world coin generalists as well as China specialists.

One of the main reasons for the high interest in silver Panda coins is the impressive price track record of past issues. Even coins from the past couple years sell for a substantial premium over silver content.

In fact, premiums over melt value for silver Pandas exceed that for any other world bullion coin except those for Australian Lunar coins.
China and Australia Especially Strong

Jim Orcholski, a Wisconsin coin dealer who runs J&T Coins , said that the track record for Chinese and Australian coins is especially strong compared to other modern world coins.

There is a lot of interest right now among his customers in the 2012 silver Pandas, which were made available to the retail market by distributors several weeks ago.

Mr. Orcholski explained that this year's issue was minted by the end of last year or the beginning of this year, according to what his distributors told him.

But dealers were told to wait for higher silver prices before releasing the coins.

After the coins were released, silver briefly rose to $37 before retreating to the $33 level.

Mr. Orcholski and other dealers found it interesting that China held off so long on releasing the coins, and a possible indication that China does not hedge its silver, as large producers often do to mitigate the effects of swings in bullion values.

Until last year the one ounce silver Pandas had mintages well below one million. Depending on the year past mintages were between 31,000 and 600,000 until 2011, when an initial three million were released but later the total mintage was said to be six million.

The coins were first issued in 1983 as proofs, when only 10,000 were made.
Mintage increased

For 2012 eight million coins are being released. And the market appears to be eagerly snapping up those coins, with several large bullion dealers out of their initial allocation.

Despite the major increase in mintage the coins are not getting any easier to locate in the U.S. Mr. Orcholski said supplies are tight and that he was only able to secure one-third of the quantity he requested. He added that his distributor was unable to say when more coins might be available.

The main reason the mintage of these coins was increased so much starting last year is that it became legal in 2011 for Chinese citizens to own silver coins. This means that a lot of 2011 and 2012-dated coins remain in China.

The Chinese government is also eager to make silver Pandas as popular as American silver eagles, according to Mr. Orcholski.

Pandas are obviously very popular within China, and it is not known how many of the silver Pandas are exported and how many are sold within China. But it is believed that the increase in mintage was related to the legalization of silver ownership in China.

It seems like the higher overall mintages have not lowered prices. In fact, retail prices are actually up substantially on this year's coins.

Mr. Orcholski added that at the wholesale level he had to pay $3.50 more this year per coin than he did last year.

Gold Pandas are also popular with collectors, but unlike silver Pandas, which are collected widely as numismatic items, the gold Pandas are primarily bullion coins and trade at levels comparable to American gold eagles.

2012 American silver eagles sell for about $5 each over spot, whereas 2012 silver Pandas run anywhere from about $12 to $25 over spot.

Silver Pandas are also made in limited numbers in a five-ounce format. Those coins are also very popular, and they sell for much higher premiums over melt value than the America the Beautiful five-ounce silver coins do.

The five-ounce 2012 silver Panda has not yet been released.

Proof one kilogram silver Panda coins were issued for some years between 1998 and 2010. The mintage for these coins is between two and four thousand. Mr. Orcholski said that many of these coins have performed well as collectibles, with some issues selling for several times current melt value.

Mr. Orcholski said that in the past modern world bullion coins were seen mostly as a bullion play, an investment in metal rather than coins. But today, there is growing interest in some of these coins as collectibles with significant numismatic potential.

The market for Chinese coins today is very strong in the U.S. and worldwide, and that is also likely to help sustain strong interest in silver Pandas.

In addition to attending coin shows and selling through his retail shop and web site, Mr. Orcholski also maintains a coin blog . He started the blog four years because he believes it is important for collectors to be educated and to be exposed to a variety of views on coins.

 

China wants to use minimum base price of < US$35 plus premium for the coins.


No one can get them at the current spot + Premium. Also the premium is as high as any coin in the world right now...

 

The scary thing is many people are willing to pay that premium.

As much as I love seeing Pandas being in demand and being hot, I don't think it is wise to buy bulk 2012 Silver Pandas at these crazy prices.

Might be fine if you were a dealer but for a long term collector or investor I'd advise caution.

(By bulk I mean monster box bulk; not 5-10)

 

Agree and disagree.

If China keeps to its base price of $35 at least you know your coin will never be worth less than that. Only someone desperate to sell will sell any lower than $37

 

Strangely doesn't work that way though. We've all seen what happens with Perth Mint or Royal Mint numismatic issues, some end up around spot price but I'm 100% sure nobody, not even dealers could buy them for that cheap from the mints.

It just takes a few dealers or weak hands to say "Ok we don't want to hold these pandas (or coins), might as well sell at a loss and get cash flow" and flood the market and force prices to plummet.

Others seeing the price drop will follow and collapse any floor price.

As a dealer you should know sometimes you'd rather take a small loss & restock than be stuck with thousands of ounces of unmovable silver.

Anyway I'm merely saying that there's probably better stuff to buy than a monster box of pandas if you're looking for numismatic gains in the short-mid term.

 

Im with fishball. But i think the base price is 35/39 uss. If i buy a ms69 for 50 i will add a lot.
Because a lot of chinese people begin collecting pandas and with the jpmorgan scheme supresing the silver price. When the usa ban the monopoly of shorts in silver. (Now the 100 dma is a hard resistence and jpmorgan make it unbreakable for now). WHen jpmorgan need to cover the shorts. The silver price skyrocket to 70/100 and the silver pandas will up in price including the 2012.

 

fishball - let me know when that flood happens.... so i can jump on the monster box train!

 

thor, you might get your chance 2012 ms 69 auctioning on e bay, 60 ish , ms 70 100-105, im waiting myself ,for an opportunity to buy from dealers off ebay for under 50,ms69 ,that is a realistic target ,when you deduct ebay and pay pal fee,s a 60.00 on ebay nets seller apx 5O.00 after fees and postage , my goal is to find an overstocked dealer and offer 47/48 for an NGC box of 20 at a time................ms 69

 

If you find the desired dealer. Please pm me. Im too interested in buy 20 ms69 for this price.

 

At $50 their profit margin would be incredibly low.

 

There have been just as many unknowing people on Ebay paying $75 for 2012 MS69's and $120 to $150 for MS70's and I'm sure there will be plenty more. Maybe someone eventually belly's up and sells 69's less than $50, I'm sure it might happen but I won't be wasting time scanning ebay for 2012's at that price

Too many good coins on the market right now to invest money into ... why waste it on a coin that has too high a premium as a bullion play and too high of a mintage for a numismatic investment?

 

low or none at all ... someone would have to be in a pinch to get that desperate.

Graded 69's between $40 to $45 may peak my interest !

 

you are right.............. comeaux .......what people do not seem to understand an Ngc authorized dealer which you have to be approved for by NGC, who sends in 600 or more coins of the exact variety does not pay the same published grading rate of 16.50 less 10% ,the dealer rate is 6.50 per coin ,someone who sends in 1000,s of coins like modern coin mart gets a rate far less than 6.50 ,Ngc develops specialized labels just for these dealers ie: the re dragon early release, the first 500 struck label on the 2012 high relief dragon etc ,Modern coin mart & folks like paradise mint , are the life blood of NGC, so everyone please pull out you calculators and redo the math,this is an old boys club that supports each other ,which I do not mean resentfully ,if you where grading 1000,s of coins at a time you would expect the same ..............i can tell you I will buy ms 69 2012 at sub 48.00 and put them away thor I will pm you when I find them...............

 

Comeaux i think jc are right. The dealers not pay the same amount to grading 500/1000 coins than the normal mortals.
And i saw a lot of 2011 ms69 for 55/60 in ebay in the year 2011/2012. If you detract the 10%. you have the 50/55 per coin.
I think will we buy the 2012 for 50 in ms69 in the next months. (thanks to jpmorgan and hsbc)


My job is finances and tax. And i think the actual scheme in silver is similar to the Hunt brothers but in inverse relation. They make a bubble. Now they supress the silver price.

 

Thank you very much i will wait your pm.
To may is a good time

 

of course he is right ...