Greetings Pandamaniacs (is that the correct term?). I'm looking at getting into Pandas, I sent a PM to yennus about it and got a great reply (I haven't looked into it fully yet though) but another question has come up and I figured I should pose it to all. Recent events show that Pandas are resistant to dips, which demonstrates their investment value but does that mean it would be better to buy something else now and Pandas later? If Pandas don't fall in line with the spot price, should they also not rise in line with the spot price when silver recovers (obviously up until a certain point)? A 1oz Silver Panda seems to be roughly $10 more per coin more than other 1oz Silver Rounds, wouldn't it be better to get the cheaper silver now as better value for money? Yennus' Gold Pandas caught my eye as they were priced only marginally higher than others of the same size, why does the silver get such a higher premium over the gold? Your insight will be greatly appreciated.
Hi Evolution, interesting questions Bullion Glass Ceiling vs Panda Glass Floor a) many other bullion coins suffer from a glass ceiling, where spot price is the ceiling (i.e. they don't exceed a margin above spot...e.g ASEs/Maples/etc). It also means that if spot drops, they also drop in price. b) BUT, Pandas have a glass floor, where their prices usually doesn't drop below their recent highs. E.g. Few collectors and investors are willing to sell their Pandas below the price they paid for them. Hence Pandas older than 2010 have to a good measure retained their prices. c) 2011 Pandas are somewhat different. They are plentiful this year, so they are subject to the bullion glass ceiling effect more than their older brothers. But perhaps as early as next year, they are likely to become slightly more desirable as the 2012 Pandas take their position. d) I think 2011s are still a good investment. The prices for these in Australia (around $45) are still cheaper than the selling prices in China. Come next year, the 2011s should get a free upgrade in premium. e) As silver recovers, the price of 2011s is likely to pickup too... especially as we get nearer to the 2012s Panda Silver Glistens Like Gold a) You are right, Panda silver gets a much better premium than Panda gold (at the moment). b) This is due to many reasons. One is that silver has a 17% tax in China, which makes Silver Pandas expensive in China, and that has a flow on effect on the Panda's floor price. When Silver Pandas become cheap overseas, they naturally find their way back home to China where their price is higher. c) Gold isn't taxed, so this effect isn't as pronounced. d) Another simplistic answer is, silver is more affordable to more people.
I totally understand why you would think that, but it doesn't work out that way. I'll hedge and say "in most cases." When you come down to it, pandas are high value coins because there are a LOT of people buying them. As in, a billion or so potential customers. This high demand keeps prices fairly high, even when the underlying metal prices drop. When the underlying metal prices rise, they want the pandas even more. So that's how you get Peter's charts of panda way outperforming even gold and silver. If you are familiar with trading stock options, pandas act like a call option. If silver is losing, you're flat. If silver is winning, you're up exponentially. As to silver vs. gold pandas, silver have higher melt ratios because they are easier for more people to afford. A rare gold panda might trade at 2-3x melt value, where a rare silver panda might trade at 10-20x melt value. But the dollars (or RMB) involved are still lower for the silver.
That was very informative, yennus. I tip my hat to you sir. The panda world is so much deeper than I would have expected, I think I'll start slowly in the shallow end. I'm still eyeing your gold pandas btw, the silvers are in consideration too now. Another interesting take on it tamo but if demand is so great in China, does that mean you'd have to sell internationally to get the greatest returns? Thanks to you both for your replies.
You don't have to, but it helps. I've sold a few of coins to dealers in Hong Kong. Most of my buyers are people living in America with Chinese last names though. Oh, then there's a whole issue as to how much the value of graded vs. ungraded coins is spreading in the minds of Chinese coin buyers.
Pandas are easy to understand, and easy to profit from. The greatest profits come from the deeper you go... but even shallow investors in Pandas are likely to profit too. Supply vs Demand is probably the easiest way to learn Pandas. Supply of Pandas is very low... Demand for Pandas is very high (and growing fast). Bearing that in mind: I remember complaining to my wife that the 2009 Pandas were crazy expensive at around $20 back in 2009... now they fetch around $100. I remember complaining to my wife that the 2010 Pandas were crazy expensive at around $28 back in 2010... now they fetch around $60. I remember thinking I had a good deal when I bought my Maples back in 2009, but when I sold them I could only buy less than what I had initially bought. A simple motto: Cash - you lose value Bullion - you keep value Pandas - you grow value Hope this helps
Potential for a group buy, register ur interest would make it more likely and you would get a good price ( sorry if this under cutting yennus )
I have registered my interest in the group buy thread, thanks Reeve. Yennus has done such a great job of bestowing the virtues of pandas upon me that I'll almost certainly be buying some from him at some point. His mod status is well deserved.
Without disagreeing with anything tamo42 wrote I would like to add that once a gold Panda catches on it can sell for very high ratios to its melt value. For instance, a half oz. gold Panda recently brought $22,000 (final price) in an auction. That is more than 25X its intrinsic gold value. While it is the exception, so far, this sale does provide support for the thought that among the many scarce yet reasonably priced gold Panda coins there may be some outstanding values. Best wishes, Peter Anthony http://www.pandacollector.com
