Research Article: Explore the Actual Mintage and Restrikes of Precious Metal Coins from the PRC

By Huang Ruiyong
http://bbs.jibi.net/dispbbs.asp?boardid=91&Id=119905

Generally speaking, actual mintage is a number in contrast to planned mintage. Just as the name suggests, actual mintage is the actual number of a coin or medal actually minted. In the case of modern Chinese precious metal coins, actual mintage is highly significant, because it reflects very vividly the release history of modern Chinese precious metal coins. As we all know, the primary function of the early modern Chinese precious metal coins was to bring back foreign exchange, while promoting Chinese politics and culture worldwide. Except for coins for important political events, many coins before Year 2000 were initiated by overseas distributors, who came to the People's Bank of China for approval and announcing the release. Then they would seek out Shanghai Mint, Shenyang Mint or Shenzhen Guobao Mint for production before distributing the coins. For example, the Historical Figures series gold and silver coins were distributed by MDM in Germany; 8 gram lunars and dodecagonal Birds gold and silver coins were distributed by the Hong Kong Peking Coin Company Limited; the Guilin Scenery gold and silver coins were distributed by Ocean Gold Coins in Hong Kong; the Ancient Inventions and Discoveries series were distributed by PandaAmerica; the early Guanyin series gold and silver coins were distributed by Chien Hsiung Liu Co. in the US; the Unicorn series were distributed by Assets Marketing Co; the Silk Road series gold and silver coins were distributed by ING in Belgium… Fortunately, after Year 2000, distribution of Chinese precious metal coins was consolidated. Almost all the products have been distributed by the China Gold Coin Co., to the Kaiyuan Retail Center in Beijing, Shenzhen Retail Center, Hong Kong Great Wall Coins Investments Ltd., as well as MDM in Germany and PandaAmerica.

In the early years, the distributors proposed different product specs and planned mintage for precious metal coins because their capacity and channels varied. Under normal circumstances, the distributor would generally avoid producing the full planned mintage, because 1. They wanted to test market reaction to the coin; 2. They had to put together a large amount of money for the material and manufacturing cost. The distributor would ask for termination or suspension of production of a certain coin if the following occurred:

1.   The market did not react favorably to the coin;
2.   The distributor's business operations and cash flow were disrupted;
3.   Management team change at the People's Bank of China, the China Gold Coin Co. (or China Mint Company) or the distributor.

When this happened, the concept of actual mintage, which is on every collector's mind, would come into the focus.

With this explanation of actual mintage (original actual mintage), we all see that actual mintage has a big impact on the assessment of the rarity of a certain coin, because it is the essence of collection that rarity determines the price. But we may be concerned with two more questions at the same time:

1.   How are the data of actual mintage of various precious metal coins obtained?
2.   How do we treat the rumor widespread on the web of restrikes by Shanghai Mint of some types during 2001 to 2005?

Here are my answers to the two questions above:

1.   The data on actual mintage has to be verified by using materials from many sources. This is a dynamic verification process. So far, no institutions or individuals have been able to come up with accurate actual mintage numbers of all the precious metal coins from the PRC. This problem resulted from the overwhelming power of the distributors before 2000, who could directly influence the entire process of project approval, announcement, production and sales. Moreover, domestic supervisory and production organizations did not maintain complete, systematic records. In this light, in order to obtain a clear understanding of actual mintage, the following needs to be investigated:

Historical distribution records of the these companies: China Mint Company, China Gold Coin Co., China Coins Limited;

Historical production records of these organizations: Shanghai Mint, Shenyang Mint, Guobao Mint, Swiss Faude & Huguenin, Swiss Pamp Mint, Swiss Vacambi Mint, and Perth Mint of Australia;

All the sales records of distributors and retailers, including: Hong Kong Great Wall Coins Investments Ltd., Peking Coin Company Limited, PandaAmerica, MDM of Germany, Japanese Taisei Coins Corporation, ING of Belgium and so on.

This is a very arduous and complex process, which must be treated with absolute seriousness. Through the collaboration of both official and civilian efforts, the issue of actual mintage is expected to be worked out for the most part.

2.   Restrikes of some coins by Shanghai Mint after Year 2000 are described as follows:

According to records in the Yearbook of Shanghai Mint (2002-2003), Yearbook of Shanghai Mint (2004), Yearbook of Shanghai Mint (2005) and Yearbook of Shanghai Mint (2006), all the restrikes of coins before Year 2000 are listed below, in Table 1, 2 and 3:

(The tables are translated, merged and formated in this link: http://china-mint.info/forum/index.php?topic=18.msg15153#msg15153)

OK. Let me explain the restrikes from Tables 1 to 3.

First of all, restrikes are not unique to China. Other countries in the world also make restrikes, but they all exercise extreme caution when doing so. Here is an example. When Hong Kong issued lunar gold coins years ago, wild speculations followed because of the limited mintage, and the price skyrocketed. The British Authority in Hong Kong immediately decided to restrike the balance in the planned mintage, which contributed to the stabilization of the price.

Now let's take a look at the explanations from the currency issuing authorities on the restrikes of precious metal coins. The following quotations are from an administrator of the Gold and Silver Currency Division of the People Bank of China:

A.   For precious metal coins issued in the years of China Mint Company (i.e. before 1987), China Gold Coin Co. cannot apply for restrikes even if the planned mintage was not fulfilled, because these were different projects managed by two organizations, unless the precious metal coins had a theme that carried over from China Mint Company to China Gold Coin Co. (such as Historical Figures gold and silver coins). That is to say, independent themes before 1987, such as the 1983 Marco Polo gold and silver coins, the 1986 Year of Peace gold and silver coins will be excluded from restrike applications from China Gold Coin Co.

B.   For precious metal coins issued by the People's Bank of China and distributed by China Gold Coin Co., sufficient reasons must be provided for restrikes, to be approved by the Gold and Silver Currency Division of the People's Bank of China. Moreover, if the quantity of the requested restrikes is too small (below 5,000 pieces in one application), the proposal for restrikes will most likely be rejected. (Comment: this information will make collectors happy who follow the natural law of collection, because many types with a small mintage will not be restruck. The original actual mintage becomes an excellent reference).

C.   Starting last year, all the newly approved precious metal coins will not be announced by the People's Bank of China if less than 70% of the planned mintage is met, and certainly will not be approved for production. If the newly approved precious metal coins reach 70% of the planned mintage, the balance can be restruck, but the approved restrike window is one year. (Comment: this information will make collectors feel certain about the release mintage of new coins.)

We cannot talk about restrikes without mentioning the other important term: melting. Melting is exactly the opposite to restriking. What are the historical records of melting in official books? 2007 was the 20th anniversary of the founding of China Gold Coin Co. In the book "History of China Gold Coin Co." written by the editorial committee of the book, cases of past handling of precious metal coin and medal inventories by the China Gold Coin Co. are clearly laid out:

The first time occurred on October 20, 1995. China Gold Coin Co. called an official meeting to focus on the inventories of gold and silver commemorative coins. The meeting decided that: the production facilities would check large size panda silver coins (including 5 oz and 12 oz ones) minted before 1993. Twenty specimens would be preserved. Any surplus over that would be melted.

The second time was the 2002 official reply from the Gold and Silver Currency Division of the People's Bank of China on the melting of some of the commemorative gold and silver coin and medal inventories. (Document No. 20 in 2002 by the Division). This official reply required China Gold Coin Co. to melt some of the gold and silver coin inventories, all the gold and silver medals and all the patterns of unreleased gold and silver coins. Shanghai Mint and Shenyang Mint were asked to monitor the melting of the gold and silver coin and medal inventories. Between these two mints, Shenyang Mint was responsible for monitoring the melting of: 111,593 gold coins and medals, 251,564 silver coins and medals, and 3,909 bi-metal coins, which contained 794 kilograms of gold and 7,358 kilograms of silver. Shanghai Mint was responsible for monitoring the melting of: 108,814 gold coins and medals, 188,275 silver coins and medals, and 16 bi-metal coins, which contained 916 kilograms of gold and 6,228 kilograms of silver. (Comment: this happened exactly as China Gold Coin Co. was implementing a policy of quality products with strict control of quantity. The scope of this move was totally unexpected. We may say that with this large scale melting, China Gold Coin Co. depleted most of its inventories.)

Now let's go back to the restrikes in Tables 1 to 3:

A.   In 2003, the kilo gold Tang Dynasty Vault Protector was restruck. The kilo silver Tang Dynasty Vault Protector was restruck in 2003 and 2004. The Tang Dynasty Vault Protector coins were distributed by Hong Kong Peking Coin Company Limited (later on renamed as Hong Kong China Coin Company Limited). When the coins were first marketed in 1998, the coin market was very slow. The distributor later on requested restrikes to make up for their loss. Peking Coin Company Limited was a long-time business partner of China Gold Coin Co. The 8 gram lunars distributed by them were a huge success. Afterwards, the company made their name with lunar coins. The restrikes of the Tang Dynasty Vault Protector coins were a special case of a market compensation contract. If restrikes could be used to make profits, Peking Coin Company Limited would have taken advantage of their strong public relation skills and asked Shenyang Mint to mint 8 gram gold Rat at full speed.

B.   The 1999 Water Spraying Guanyin coins are gold gilt silver coins. According to informed sources at Shanghai Mint, the condition of the coins in the warehouse was horrible because of bad storage environment. When China Gold Coin Co. came to pick up the order, the condition of the coins was considered below the standards of fiat currency. Shanghai Mint melted all the inventory, and then re-minted the same number of coins as melted.

C.   We may notice that the Historical Figures silver coins were continuously restruck. This is why we find brand new complete sets of Historical Figures silver coins at Lugong and Madian markets. There was a big story behind this set, as those were no ordinary restrike orders. The original distributor of this set was MDM in Germany. In the catalog of precious metal coins and medals by Mr. Ge Zukang, the actual mintage was very different from the planned mintage. But later on, MDM got in contact with a Hong Kong businessman by way of a coin dealer at the Lugong Market, and obtained the approval for restrikes through China Gold Coin Co. after many twists and turns. The quantity of the restrikes was very surprising. This restrike plan stirred up a lot of noise (the People's Bank of China was not aware of these restrikes at first). For this reason, managers at China Gold Coin Co. responsible for the project were moved to other positions in order to cool down complaints. This set of coins will have more restrikes as it was an international project with the contract already in place.

D.   The Silk Road silver coins were restruck in 2004 and 2005. The distributor of this set was ING in Belgium. It was another international project, similar to the Historical Figures silver coins. As the contract was already in place, there was no option but to restrike the coins.

E.   Two specimens of the 1987 12 oz gold Panda, the 1991 12 oz gold Panda and the 1996 20 oz Unicorn were restruck in 2004. These were normal restrikes, as they were needed for China Gold Coin Co. to showcase the coins.

With all this knowledge, we now have a better understanding of the actual mintage and restrikes, instead of seeing restrikes as fearful threats. We now know that theoretically, all the precious metal coins are likely to be restruck in the future if the actual mintage falls short of the planned mintage. But in fact the possibility of restrikes will diminish, to the degree of being negligible, because the Banking Law of the People's Republic of China and the Regulations on Renminbi of People's Republic of China will be further refined. As fiat currency, the approval, production and sales of precious metal coins will be further regulated. Restrikes will have a political impact. As collector and researchers, we need to understand the reason for restrikes of some individual coins. Also, after learning about restrikes of these coins, we should know that occasional restrikes of such coins cannot be viewed as the harbinger for restriking all the precious metal coins, just as we do not rush to get rid of all our color coin collections when we occasionally find a lot of color paint peeling off on one color coin.

Finally, precious metal coins from the PRC usually have a smaller actual mintage than the planned mintage. With early coins, the actual mintage was far lower than the planned mintage, such as the 1/2 oz gold Ancient Maritime Ships and the 1 oz gold Sun Yat-Sen. We often see the actual mintage exceeded the planned mintage by a few or a few dozen specimens. Don't panic. The extra specimens were patterns. For example, the 5 oz gold Huangdi Mausoleum had a planned mintage of 99, but the actual mintage was 100. The extra specimen was a pattern. Another example is the 5 oz Longmen, which had a planned mintage of 288. But the actual mintage was 292. Again the extra 4 specimens were patterns. Among the precious metal coins from the PRC, there were a couple of cases where the actual mintage was more than the planned mintage by 10%, but this is very rare.

Conclusions:

Actual mintage is an important parameter in the collection of precious metal coins from the PRC. It reflects their history at the same time. The dynamic change of the actual mintage of a certain type is closely related to restrikes. For new collectors, they can start on their journey of value collection and value investment by getting to know the planned mintage of the precious metal coins. Here is an example. In 1989, China issued a palladium panda coin. This was the only palladium panda coin in the whole world in the 20th century. The planned mintage was 3,000. However, because of the political events of that year, the actually mintage was only 1,367. When the price of palladium shot up a few years ago, the distributor, Mr. Lim Beng Haw, melted a lot from his inventory, leaving the coin all the more rare. Even if the new collector does not know about the actual mintage and melting, he or she can determine that the coin is well worth collecting based merely on the planned mintage and the fact that it was the only palladium panda coin in the 20th century. For each and every coin issued by PRC before the 21st century, the information on their approval, production and distribution is far from complete, which demands great efforts for us to research them carefully and continuously. We all have to pitch in and collect valid information from all channels, before finally establishing a systematic and complete academic theory on precious metal coins from the PRC.

Stories behind the Year of the Child Piedfort Gold Coin

By Huang Ruiyong

http://bbs.jibi.net/dispbbs.asp?boardid=91&Id=129830

The 1979 Year of Child piedfort gold coin (commonly known as "piedfort gold Flower Watering") weighs 34.34 grams, with a fineness of 90%. It contains 30.906 grams of gold. This was the first piedfort gold coin from the PRC, with a planned mintage of 500. In 1976, at the proposal of the Philippines government, the 31^st United Nations General Assembly officially proclaimed 1979 as the Year of the Child, in order to encourage all the countries in the world to promote the causes of child protection, education and welfare. To commemorate the Year of the Child, 12 countries issued commemorative gold coins, including Bolivia, Canada, China, Ethiopia, Tunisia and UAE. Only a handful of these countries, China, Nepal and Thailand, issued piedfort gold coins, which are rare gems.

On May 12, 1979, the Ministry of Foreign Affairs, the Finance Ministry, the People's Bank of China and the All-China Women's Federation submitted a proposal to the State Council for participating in the United Nations’ plan to issue commemorative precious metal coins for the Year of the Child. In the initial proposal, it was specified that the gold coin would have a diameter of 27mm, with a weight of 17.17 grams, a fineness of 90%, and a face value of 450 Yuan, and that the piedfort gold coin would have a diameter of 27mm, with a weight of 34.34 grams, a fineness of 90%, and a face value of 900 Yuan. Upon the approval of the State Council, the People's Bank of China authorized the State-Owned Factory 614 (Shanghai Mint) to take up the work of design and minting of this set of coins. Shanghai Mint appointed their arts and crafts master, Mr. Chen Jian (38 years old then) as the designer of the coin.

The first draft from Mr. Chen Jian had the country name, the national emblem and the year on the obverse. On the reverse was a young girl watering flowers with a watering can, in a squatting position. But when the design was submitted for review, Mrs. Chen Muhua (then Governor of the People's Bank of China – translator) wanted the design on the reverse to be modified: besides the girl, a boy should be added to the design. Following her advice, Mr. Chen Jian changed the design to a young boy with a shovel and a girl watering a flower with a can. When the design was finalized, the People's Bank of China selected March, 1980 to be the release time for the Year of the Child gold and silver coins, which would be distributed by Paramount International Coins Co. The specifications of the finalized Year of the Child piedfort gold coin remained unchanged except for the face value, which was the same as on the ordinary gold coin, at 450 Yuan.

(Year of the Child first draft )

It should be mentioned that New China attached great importance to the first set of commemorative precious metal coins with an international theme. A photo in my collection provides the evidence: the first ambassador of New China to the United States, Mr. Chai Zemin, and the then Secretary of the State of the United States, Dr. Henry Kissinger, were both formally dressed and greeted each other with a hearty handshake when attending the ceremony for the initial release of the Year of the Child gold and silver coins. The release of a set of coins resulted in "Sino-American Friendship". This bears witness to the uniqueness of this set of coins from a different perspective. 

Paramount targeted top collectors in the international numismatic community when distributing the Year of the Child piedfort gold coins. Accordingly the selling price was exorbitant, as high as 4,000 US dollars. (The thin version of the gold coin sold only for 737 US dollars, and the ordinary silver coin sold for 125 US dollars, which highlighted the huge gap in the selling prices of the piedfort and the thin versions of the coin.) To emphasize the rarity of the piedfort gold coin, Paramount solicited the famous American jewelry company Tiffany & Co. for the design of the classic packaging of the coin. But the selling price of the piedfort coin was way beyond expectations, and the distributor and coin dealers in many countries had a hard time selling it. Moreover, the sudden invasion of Afghanistan by the former Soviet Union pushed the international gold price to a peak. The Year of the Child piedfort coins were melted by many dealers and sold as gold bullion. 

There are three key numbers about the Year of the Child piedfort gold coin:

1.       Planned mintage: 500

2.       Actual mintage: I only found the actual mintage numbers for the following Year of the Child gold and silver coins among the original mintage records at Shanghai Mint: the ordinary gold coin, the piedfort silver coin, the ordinary silver coin and the matte silver coin. The actual mintage of the piedfort gold coin was mysteriously missing. From my discussions with top collectors and top dealers both in China and abroad, the mintage should be a lot less than 500. The reason is as follows: Paramount intended to sell the Year of the Child piedfort gold coins to top collectors in the international numismatic community. Many of the Chinese piedfort gold coins were packaged together with the Year of the Child piedfort gold coins from other countries, in a big exquisite custom-made box. As the selling price was unusually high, Paramount certainly would not have placed an order for full production. Instead it would have had some coins minted to see whether collectors would fall for this set of piedfort gold coins. Here is the evidence: according to the official announcement from the Thai government, the actual mintage of the Thai Year of the Child piedfort gold coin is 61. This number should not be very far from the actual mintage of the Year of the Child piedfort gold coin from China.

3.       Surviving mintage: After my extensive interactions with international coin dealers, collectors and numismatists that deal in or collect Chinese gold coins, I learned that this coin had turned up in the following regions: the United States, Germany, Japan, Mainland China, Taiwan, Hong Kong, Russia, Austria and Brazil, with a total surviving mintage of probably less than 50. The Year of the Child piedfort gold coin differs from the many large size gold coins from the PRC in that the large gold coins (5oz and above) have a release mintage of less than 100, which inherently ensures their rarity. On the other hand, the Year of the Child piedfort gold coin went through the complete process of production, sales, absorption and melting. This rarity is a lot harder to achieve than the rarity of the large size gold coins. The Year of the Child piedfort gold coin is the king of all small size precious metal coins from the PRC. Its rarity resulted from historical reasons, which has aroused overwhelming interest from many Chinese and foreign collectors. The last three public transactions were: 1. At the 2007 Munich Coin Expo, an Australian coin dealer sold one specimen; 2. At an Austrian coin auction at the beginning of 2007, a top Russian collector got hold of one specimen; 3. At the first major coin auction by the Shanghai Dongfang International Commodity Auction Company, an entrepreneur from North China won the bid for one specimen.

The following facts also speak to the rarity of this coin. As far as I know, Mr. Robert Mish, who is one of the most authoritative American dealers of gold coins from the PRC, and a consultant to the Krause International Coin Catalogs, handled only 4 specimens of this coin in his more than 20 years of business in precious metal coins from the PRC, while a lot more 1980 piedfort gold coins for the Lake Placid Winter Olympics and for the Chinese Olympics Committee passed through him in the same period of time. King Chan, a top collector, recalled that some piedfort gold coins for the Winter Olympics and for the Chinese Olympics Committee turned up every year at the Hong Kong Coin Expo from 1997 to 2006, but the Year of the Child piedfort gold coin only made one appearance during those ten years. The personal experience of a top collector Mr. Li Guoying is more convincing: he has been collecting gold and silver coins from China for more than 15 years in Germany. During all this time, he saw the Year of the Child piedfort gold coin only two times. (One passed through him; the other was seen at the 2007 Munich Coin Expo.) Mr. Li had the chance of handling many top gems. Even the Seismograph and Compass kilo gold coins from the 1992 Ancient Inventions and Discoveries set were once in his possession (with a release mintage of 10 only, both top rarities). He believes that the Year of the Child piedfort gold coin is one of the toughest coins to collect among the precious metal coins from the PRC.

In foreign countries, coin dealers are closely connected to their business partners. Some top dealers can find all the rarest coins in their insider circle. But even those with extensive networks like Mr. Robert Mish, Mr. King Chan and Mr. Li Guoying had very few chances to run into the Year of the Child piedfort gold coins in 10 to 20 years. The difficulty of collecting this coin is beyond description.

Finally, it should be mentioned that Mr. Chen Jian’s name was listed as the designer for the first time in the international COA of the Flower Watering piedfort gold coin. He was praised as an outstanding Chinese designer and engraver. The profile of the designer in the COA of precious metal coins enriched the culture of the Chinese gold coins, deepening public understanding of the coins.

(Comparison of the coin to a top Chinese stamp is omitted – translator)

The revelations above resulted from my interactions and discussions with many top Chinese and international collectors, coin dealers, numismatists and professionals. When the Year of the Child piedfort gold coin was minted in 1980, I was still a child, missing the chance of experiencing the whole sales process of the coin. I see my post as a teaser, so that experts with precise knowledge of the sales, absorption and melting process of the coin can come out with more detailed historical data. Of course, I myself will spare no efforts in digging out historical stories behind this coin. 

Beginners' Approach to Collection

by Huang Ruiyong
Source: http://bbs.jibi.net/dispbbs.asp?boardid=70&Id=233597&page=2

Good evening everyone. Jibi.net gave me a grand title. I do not feel quite up to it, though.

Honestly, the overall research in the MCC coin field looks weaker than in other coin segments. But just because of this, a historical opportunity presents itself to us. Let’s collect with pleasure, put our hearts to research, and we will have a splendid future.

The three lectures starting from today cover the following topics:

1.   Beginners'  Approach to Collection

2.   Transition to Intermediate Collectors

3.   Top Choices for Advanced Collectors

Let's take a look at the topic today, which is directed at new collectors.

Many new collectors get to know precious metal coins and medals of the PRC, and feel deeply impressed. But they have no reference books, no access to the markets in Beijing and Shanghai, and no teachers to learn from. They grope the way all by themselves, like walking in darkness, with extreme difficulty. So I will provide the many new collectors with some suggestions, from the perspective of collection.

“A job can be completed more easily with sharp tools.”

In coin collection, one will definitely gain success if the DIRECTION and APPROACH are correct.

A new collector must adopt the right methodology from the very beginning, focusing on the following aspects: affinity with the coins, logic reasoning, coin knowledge, awareness of the real gems, making friends, and receiving correct information.

If we manage all these aspects successfully, we can pass the beginner phase with success and no hassle. Now let me expand these aspects in detail.

First let’s talk about coin affinity.

What is coin affinity? It is directly “fall in love at first sight.” You fall in love with a coin at first sight, intoxicated by it, applauding it loudly with admiration. This comes from pure appreciation, without any consideration of material gain.

For example, the first set of Bronze ware gold coins were crafted by Tong Youming and Sun Qiling, two top engravers of Shanghai Mint, who put all their heart and soul into these coins. You set them out in a row under spotlights, and watch them beaming out dazzling lights and colors, simply gorgeous and beautiful. It is hard to imagine anyone resisting their temptation.

Another coin is the 2001 2oz Dunhuang silver coin. The sacred image of the buddha in high relief from the prosperous Tang Dynasty is absolutely stately and life-like. The ingenious use of frosting and anti-frosting on the coin endears it to many collectors.

This is coin affinity. If you are a collector and you can pick out the coin you like at first sight from a pile of coins, congratulations! This comes from your coin affinity. It is absolutely a wonderful thing to feel this affinity to a coin.

Most collectors start from appreciating modern precious metal coins due to coin affinity, and then go out of their way to search for and collect these coins.

We all say that there are no cheap or expensive collections, meaning for an item, if you can appreciate its merits, it is worth collecting. But wait! Although we do not distinguish between cheap and expensive collections, there are degrees of sophistication in collection.

For modern precious metal coins issued by the PRC, nobody has the financial power or market channels to collect them all. A newbie should avoid trying to grab at everything in order to advance their own collection. Do not covet every coin that comes in sight. Otherwise your pocket will always be empty, and you be enslaved by coins. Learning what to go after and when to give up, picking coins that you feel affinity for from your own perspective: these are the basis for a newbie to move up to more advanced levels.    

After the discussion of coin affinity, let’s focus on the importance of logical reasoning.

If we want to achieve high quality in any work, a methodology that employs logical reasoning is a must. An effective methodology cannot be developed in one day, but logical reasoning can help us with objective analysis and judgment on many occasions.

For example, for a beginner, a top issue is whether a coin is worth buying for the price. On this mind racking issue, logical reasoning can come to our help.

Here is an example:
5oz pandas were issued in many years. In general, if the prices are the same, we will pick the one with the smallest mintage. If the mintage is the same, we will pick those issued in earlier years.

Another example:
If the 1/2oz Guandu Battle gold coin and the 1/2oz Chibi Battle gold coin are not very different in price, we will definitely pick the Guandu Battle coin. The reasoning is: 1. Guandu is from the second set, while Chibi is from the third set; 2. Guandu’s mintage is 2000, while Chibi’s mintage is 3000.

Logic reasoning dictates that when we pick coins we have affinity for, we must consider the following factors: mintage, excellence in design, technology, awards received, key date status, packaging, whether made from platinum or palladium, whether priced close to bullion, whether belonging to a special segment (such as piefort, bimetal and coin alignment). Once we developed logical reasoning, we have met the critical requirements for moving up.

The third aspect is coin knowledge. This is a key point, too. In any art collection or investment field, professional expertise will finally transform into physical wealth. This is universal, in China and abroad, in ancient times and in current days, with no exception. With regard to modern precious metal coins, I would like to kindly remind new collectors: gold and silver coins by nature are dual functional, for collection and appreciation, as well as for investment. If we dive deeply into coin knowledge, we will finally harvest both a great collection for appreciation and rewarding investment return. But if one focuses exclusively on investment or speculation, ignoring the essence – accumulation of coin knowledge, he or she will lose out in the long run.

Coin knowledge needs to be accumulated with solid effort: buy coin catalogs/reference materials, visit coin markets, browse online gold and silver coin sites, go to coin shows, communicate with friends constantly, inspect physical coins, and summarize one’s own knowledge from time to time. In this way, you will find yourself transformed into a veteran before you even realized it. 

Of course, it takes great pains to accumulate rich coin knowledge. But if you really like modern precious metal coins, this effort is worth the effort.

Next, we need to establish a sense of gem coins.

What are gems? Gems are like the moon amid the many stars. As time goes by, fashion will fade with wind and rain, but gems will shine forever.

Gems can be divided into high-end gems and gems for the masses. High-end gems, judging from the term, are targets of the top collectors and the super rich. They are like villas in the Xiangshan area in Beijing or those in the Sheshan area in Shanghai. We believe that gold and silver coins generally have three kinds of values: 1. Enjoyment value; 2. Investment value; 3. Show-off value.  For the high-end gems, the show-off value is more dominant. For example the flower-watering (Year of Children) piefort gold coin, 5oz gold coins with a mintage of less than 100, platinum lunars… These are all high-end gems which will only change hands among top collectors or appear on auctions. These are the most expensive coins.

On the other hand, the gems for masses are those affordable by the ordinary people, like the SOHO buildings in the Jianwai area in Beijing, or apartment buildings in the Xujiahui area in Shanghai. Although the gems for masses are a lot cheaper than the high-end gems, their collector base is much larger than that of the high-end gems. These include Year of Children gold and silver coins (normal thickness), 8g lunars, 1989 platinum panda, and the award-winning coins over the years. These are all excellent gems for the masses.

These gems, whether high-end or for the masses, will lead price surges and resist price declines. Their ownership is endorsed by the collector community. In this sense, it is vital to develop a sense for the gems. This is especially important for beginners, because it will save them a lot of wasteful errors.

How can a newbie make sure that the coins he or she collects are gems? Coin affinity, logical reasoning and coin knowledge, which were discussed above, all play an important role.  To those, we can add the following aspects: making friends and information symmetry.

Making friends is key to precious metal coin collection.

The Analects by Confucius said: We have three kinds of friends to benefit from, those with integration, those with tolerance, and those with rich knowledge. We need friends with such qualities. Friends with integration will let us see other perspectives than our own. Tolerant friends will encourage the voicing of different views in the coin collection community. Knowledgeable friends will help us save time and wasteful errors. For most people, coin collection is a hobby after work. Because of this, we do not have enough energy to explore details of everything. So friends are great complements to our personal limitations.

Coin collection has never been an individual experience, something one can keep just to oneself. When we get hold of a piece of treasure, we immediately feel our heart pounding with maddening elation. But this elation has to be shared with some one. So getting together with friends, chatting over a cup of tea, showing one’s own collection, exchanging new learnings, trading coins and expanding one’s coin knowledge, these are extremely pleasant experiences.

There is a club for fans of modern coins and medals in Hangzhou now, who meet regularly. On the bank of the West Lake, in a warm breeze, sipping fragrant tea, watching glittering gold coins, we get together to spend a happy afternoon or evening over the weekend. Like what Sister Sandezi said, if you can enjoy it with others, why keep it to yourself?

For beginners, breaking the information barrier is critical, too. Luckily we have information readily available these days, and the coin market has totally transformed itself in 10 years.

10 years ago, prices of gold and silver coins in major cities like Nanjing and Hangzhou had a time lag from the prices in Shanghai, not to mention in small cities or county seats. But now, with the power of the web, many collectors can make impressive gains even from small cities. For example, although Youxia is located in a remote place in Northern Jiangsu, he can make contacts abroad and find impressive coins for fellow collectors. His timeliness is no less than that of coin dealers in Lugong or Madian.

It is my personal view that collectors have more options in the world of Internet. Before buying a common coin, do price comparison on the web. But for coins with a high price tag, it is imperative to do as much homework as possible in advance. Now the topics discussed above all circle back to us: coin affinity, logical reasoning, coin knowledge, awareness of gem coins, a group of friends. With more thinking and knowledge, we will feel more confident. I believe that the purpose for jibi.net to list honest dealers is to build the reputation for them, and remove the information barrier between dealers and collectors.

In addition, with new releases and common coins, the market is relatively transparent. But due to the extreme scarcity of some early precious metal coin gems, it is absolutely a seller’s market. In addition, because there are few transaction records available, which beginners have a hard time to obtain, they have to take great precautions when buying/trading such coins. It is not that dealers are always trying to trick collectors. To be fair, the price information of some early coins is even beyond the reach of coin dealers.

I have been sorting out transaction price data of modern Chinese gold and silver coins from all over the world. If anyone is interested, we can compare notes sometime and use them as reference. As far as I know, auctions exclusively for modern Chinese gold and silver coins will be held this year. Auction records will be used later on as important guides for early rare coins.

Time is running out. I have covered only a small part of the materials I prepared. Sorry to you all.

To summarize:

Coin affinity will guide our affection to the coin;
Logic reasoning equips us with the ability to maneuver through the market;
Coin knowledge is the requirement for beginners to grow;
Awareness of gem coins enables us to take off;
Good friends make us completely relaxed;
Symmetry in information gives us a sense of security.

If beginners can achieve all these, they will naturally advance to intermediate collectors before long.