The Coin Cabinet
Amid the uncertainty brought about by the pandemic, we’ve seen market highs as well as retreats for modern proofs in the past 18 months. The gold price has been affected by central bank borrowing and the bond and equities markets, in turn impacting the market for semi-collectible and bullion gold coins. This opens up buying opportunities, particularly for low-mintage/high-demand Royal Mint proofs that have come off the parabolic advance seen in the first-half of 2020.
Those percentage returns were a result of collectors and investors seeking showcase coins with liquidity and finite supply, so the question is — where to next? Here we look at the price of five coins over this period, and why we remain bullish on their medium-to long-term value.
On 8 August 2021, the gold price dropped to a four-month low of $1,677.90 per ounce, following the announcement of stronger-than-expected US jobs data and a subsequent rush to USD and away from gold. The price of gold is arguably the biggest driver of the price for modern commemoratives, but not, according founder and CEO of The Coin Cabinet Andreas Afeldt, in the simplest terms.
‘It’s easy to look at gold valuation of semi-collectibles as a straightforward “my coin is worth £600 and £300 is made up of gold value; gold goes up 10% so my £300 worth of gold is now £330 which makes my coin £630,”’ he says. ‘It’s actually much more complex than that,’ he continues. ‘I hired a statistics professor to analyse the correlation between the price of gold and gold coins, based on our sales data.’
It turns out that coins traded at auction don’t work quite like the above example. The analysis suggests something closer to the following: the price of gold rises 10%; the investing world takes notice (‘I need to buy gold!’); the demand for physical gold sees prices of semi-collectable gold coins shoot up as newcomers enter the market. In the real world, the assumed market valuations for semi-collectible coins does not rise in-line with the gold price.
The Great Engravers series is one of the most desirable collections released by the Royal Mint in recent years. A celebration of the mint’s greatest talents, The Three Graces launched in February 2021 (illustrated above, the £500 five-ounce gold proof coin; photo: The Royal Mint, 2021), the second in the series focusing on the designs of William Wyon, RA (1795-1851), following the revival of his ‘Una and the Lion’ in 2019.
First produced in 1817 during the last years of George III’s reign, the original coins were never circulated. Regarded as one of the greatest ever coin designs, the original mintage of the Three Graces Pattern Crown was around 50, of which very few have survived. Recent auction results have demonstrated the coin’s rarity and growing demand — a NGC PR65 sold for $100,000 in 2018, and in 2019 a NGC PR64+ Cameo sold for $170,000.
Many of those lucky enough to purchase the 2020 Three Graces directly from the Royal Mint went on to quickly ‘flip’ the coin for profit, creating a short-term spike in the market. A more realistic valuation and expectation of demand comes with time — and third-party grading. ‘The problem with the exuberance around modern proof releases is that it creates a liquidity squeeze, raising prices and expectations that are unrealistic in the longer-term,’ says Andreas. ‘Since we price coins at 10% below their melt value and don’t charge a buyer’s premium, our platform is a great indicator of the health and temperature of the market — it’s the most transparent reflection of demand.’
Half a millennium after the mintage of the first English sovereigns and 172 years after the introduction of the coin’s modern incarnation, the 1989 commemorative sovereign is a coin that aptly reflects its namesake’s storied history.
Depicting Queen Elizabeth II enthroned in King Edward’s (1239-1307) Coronation Chair, with the Shield of the Royal Arms on a double Tudor Rose on the reverse, it was the first sovereign in a century to carry a reverse design other than St George and the Dragon. The legend reads ‘ANNIVERSARY OF THE GOLD SOVEREIGN 1489-1989’, which is the first and only time in history the word ‘sovereign’ has appeared on a British coin.
Of the £5, £2, £1 and half-sovereign sets, each individual coin has risen in price with relative consistency in the three decades since release, a trend we believe will continue. Coins from the series reached a high around October 2020, with a subsequent weakening towards the middle of 2021. We saw the £5 selling for around £4,900 in October 2019; in October 2020 a £5 realised £8,250. In the same auction, a £2 sold for £2,100, where it had typically sold for £1,200-1,400 in 2019. Although prices have come off those highs, we see the current valuation as a buying opportunity for those who want to acquire a unique design and commemoration of the world’s most collected coin.
Read more about the modern sovereign since 1817, and its predecessor that dates back to the reign of King Henry VII.
Cnut the Great, a Dane who is perhaps best known for rebuking his fawning courtiers by showing that even he couldn’t turn back the tide, became king of England in 1017. He unified the kingdoms of England and Denmark as part of the North Sea Empire and minted coins of equal value across the British Isles and Scandinavia.
Commemorating the 1,000th anniversary of his coronation (mintage of 273 coins, among the smallest mintages of a mainstream British gold coin), the Royal Mint’s coin depicts the titular king on the reverse, with Queen Elizabeth II’s fifth portrait on the obverse.
In April 2020, we sold a PCGS 70 version for £2,500. By October the same year, a graded PCGS 70 example sold for £8,750 — a more than three-fold increase in six months.
Read more about semi-collectible coins.
A 2019 Una and the Lion two-ounce gold proof £200 coin, portrait bust of Elizabeth II by Jody Clark on the obverse (Photo: The Royal Mint, 2019)
The 2019 ‘Una and the Lion’ release from the Great Engravers series included a single £5,000 5kg gold proof alongside £2,000 2kg, £1,000 1kg, £500 5oz and £200 2oz gold proof coins (and a £5 2oz silver proof).
Highly-prized by collectors for its 1839 William Wyon design celebrating Queen Victoria’s coronation, the modern proof’s historical appeal and limited mintage (225 coins) resulted in resale prices immediately tripling after launch — a signal that the coin would emulate the cult-like following and impressive valuations of its predecessor.
The Coin Cabinet sold a NGC PF70 example of the £200 2oz gold proof in January 2020 for £27,000. In our September 2020 auction another example, graded PCGS PF70, reached £59,000. Despite more than doubling in price, Andreas still regards this as a good buy. ‘We see this coin being worth upwards of £70,000 — an extraordinary rise for a coin minted in 2019.’
From the outset, the 007 James Bond Collection from the Royal Mint was a phenomenon. A combination of the Bond brand with a new series of modern proofs saw coin collectors joined by a wider cohort of fans eager to buy into the series. Andreas remembers its March 2020 release and the subsequent excitement well. ‘By January 2021, clients were calling us, happy to pay £3,000 a coin,’ he says. ‘A 1oz graded 70 sold for £3,100, followed by £4,200 in March.’ Since then, the coins have seen lower prices, stabilising at around £2,500. It remains a buy, suggests Andreas…
*All prices listed here are from The Coin Cabinet’s past auctions. To see prices realised for modern proofs across our previous sales, click here.