Bullion vs Numismatic Question

[DrDave]

A random question for a monday morning.....

When does the bullion price of a coin have no bearing on its value?

For instance, a common gold sovereign is around £400, so thats spot plus whatever premium. If its a little less common, then the premium would be larger but still using the bullion value as a starting point.

Even rarer, say a £1000 coin, then is the bullion value relevant? And then a £12,000 sample is obviously a pure numismatic value?

So is the point at which a coin changes from bullion to numismatic a price point or a rarity value?

There's no real reason for asking this question by the way, its a just a curiosity thing.

[Petra]

Probably no bearing what’s so ever. Any coin can be collected by someone, however, modern coins that are collected may be proof etc. and issued in far fewer numbers. The scarcer something is, the higher the price. That’s the same for older coins. Gold ones hold a premium, but the scarcer they are, the more it will cost you.

[dragafem]

Spot is always the starting point.You could have a coin which worth a lot in the book but if you take that coin to a dealer more than likely you will only get spot.

[Happypanda88]

I view them like this:

Bullion coins are those made of gold, silver, or platinum. They are specifically purchased for investments and/or store of value. These coins are normally defined by weight and valued based on the price of metal content.

Numismatic coins are rare collectibles with historical value. Their value is beyond the intrinsic value of the metal content.

Then there are the crossovers, Semi-Numismatics - Proofs, limited editions. They can also be old bullion releases that have become desirable to collectors. For example, the high mintage years of pre-1933 American double eagles. Semi-Numismatics normally have a much higher premium over standard bullion.

[SidS]

To me, and I'm old school - proper old school.

Stuff like Britannias, Queen's Beasts, American Eagles, Maples, Krugerrands etc. are pure bullion coins (or rounds, if you like) - their value is the metal within them. They are not numismatic coins in any way. (Although times are changing, I suspect and some people collect them like regular coins).

Numismatic coins are those issued for circulation (or proof/special versions of them).

So in a nutshell:

Sovereign (ex circulation coin) - Numismatic

Britannia (introduced specifically for people to invest in gold) - Bullion

Bullion value has little importance with most old coins. Certainly none at all with hammered coins! 😁

[Stuntman]

For me, the price of any coin (and indeed perhaps bar) whether bullion or otherwise is governed by perhaps four main factors:

Condition/Grade

Rarity

Desirability

Popularity

So any coin can be numismatic in that sense.  Essentially it's supply and demand where the quality also influences the price.

So to take a bullion example for UK 1 oz gold coins dated 2017:

Britannia - probably spot plus a little bit

30th Anniversary Britannia - a bit more

QB Griffin - quite a lot more

QB Dragon - not quite as much as the Griffin but quite a bit more than the Britannias.

All cost fairly similar amounts to buy at the time.  Basic Britannia coin was the cheapest but only by about 2%-3%.

 

[GoldStatue]

I generally split it into bullion, semi-numismatic and numismatic where the spot price has an effect on the bullion and the semi-numismatic prices and the numismatic end of things is detached from the spot price.

One thing is for sure the higher the spot price the more people are attracted to collecting coins.

 

[sixgun]

Later this week i will get some silver coins from goldsilver.be - the coins are similarly priced but i am considering which will appreciate the most over time.

They are all 1 oz of silver. That 1 oz of silver puts a floor under the price. i consider all of them numismatic. They are all over 30% over spot silver even at GS.be prices.
If you ask people like Lawrence Chard he will say numismatic is a certain age of coin.

From the Commodity Code thread from a few years ago

i posted an email response by a government officer.

"I would class coins as of numismatic interest where they are traded at a value greater than the face-value as legal tender with the price dependant on factors such as condition and year of manufacture amongst others things."

Well this is virtually every single 1 oz silver coin that ever passed through this forum. So according to one HM operative, he thinks / thought nearly everything on TSF is of numismatic interest.
Numismatic means anything relating to coins - what we really mean is of [special] numismatic interest - hence the wording of HMC. 

According to the Royal Mint the silver coins they make, for example the 2022 1 oz Britannia are legal tender.

"The £2 Britannia coin is actually in circulation and therefore can be used in the banks and shops."

Also

"In practice this means that although the silver UK coins we produce in denominations of £5, £20, £50 and £100 are approved as legal tender, they have been designed as limited edition collectables or gifts and will not be entering general circulation. As such, UK shops and banks are unlikely to accept them."

So the £2 Britiannia is a legal tender coin and they say it is in circulation. They are excluding the 1oz Britannia as collector b/c they mention 'silver'. Silver coins with a face value of £5 and over are collector coins = according to Royal Mint numismatic.

This takes me round to the idea you can take £10 000 cash (including coins) across the UK border without declaring it. So that should mean 5 monster boxes of £2 silver Britannias. We are waiting for someone to try this. 

As far a sovereigns, they are all of numismatic interest, well at least to most people. £400 is too much to call it a lump of metal. If i took a lump hammer to someone's 'bullion' sovereigns they are not going to just shrug and say, ah well they are just bullion and i valued them at spot. 

Edited September 12, 2022 by sixgun

[Pete]

Once upon a time people collected stamps and some rarer stamps that were deemed "sought after" or "collectible" rose in price.
I have a cousin that invested many years building up beautiful albums of stamps, had all the annual stamp catalogues etc etc.

Then stamps seemed to fall out of popularity and he reckons his impressive collection ( i.e. back in the days relatively valuable ) is probably little more than fuel for an open fire.

So in answer to the question it really depends on "sought after" and "collectibility" as to whether a coin is likely to fetch a bigger premium and trends can change.

There are many collectors and people with deep pockets that always want to own something rare or very expensive - because they can - so numismatic coins will attract coin collectors for sure and the metal it is made of may be insignificant in its valuation.

What I wonder would someone pay for a US quarter that was carried to the moon and back in an astronaut's pocket ?

[CANV]

Rolexes will be the next ‘stamps’ 

Edited September 12, 2022 by CANV

[Stuntman]

22 hours ago, sixgun said:

(snip)

According to the Royal Mint the silver coins they make, for example the 2022 1 oz Britannia are legal tender.

"The £2 Britannia coin is actually in circulation and therefore can be used in the banks and shops."

Also

"In practice this means that although the silver UK coins we produce in denominations of £5, £20, £50 and £100 are approved as legal tender, they have been designed as limited edition collectables or gifts and will not be entering general circulation. As such, UK shops and banks are unlikely to accept them."

So the £2 Britiannia is a legal tender coin and they say it is in circulation. They are excluding the 1oz Britannia as collector b/c they mention 'silver'. Silver coins with a face value of £5 and over are collector coins = according to Royal Mint numismatic.

(snip)

@sixgun - I think on the first of your above points, the RM is referring to the bimetallic £2 currency coin which has Britannia on its reverse and dated 2015 and 2016, rather than silver 1 oz Britannia coins with a denomination value of £2.

And on the bit in italics, I think the RM is referring to the £20, £50 and £100 silver coins that were BU stirkes (not bullion) that used to be available to buy from then at face value (starting with the 2013 £20 coin with the St George and Dragon reverse).  I don't think they are referring to bullion coins.

For the £5 coins I think they are referring to the cupro-nickel commemorative coins.

All of this makes sense in that context, although I do agree with you on the other points.

Cheers 🙂