A modern Chinese rarity became the third Chinese coin to cross the $1 million mark within five months during an Aug. 28 auction in Hong Kong.

The Proof 1992 1-kilogram gold 2,000-yuan coin, serially numbered 06 from a maximum mintage of 10 (and with a reported actual mintage of five pieces), realized $1.298 million U.S. including the 18 percent buyer’s fee.

The coin was sold in an auction conducted by Champion Hong Kong Auctions at the Hyatt Regency Hong Kong in Kowloon, Hong Kong. The sale was the firm’s second auction focused on modern Chinese material.

The price established a new record for modern kilogram gold Chinese coins and helped propel the 186-lot auction of modern Chinese coins to realize $5,170,382 U.S., including the buyer’s fees.

Several lots in the auction reflected the raging market for modern Chinese coins (those pieces dated from 1979 to the present), but the leader was the kilogram .999 fine gold coin, which was graded Proof 69 Ultra Cameo by Numismatic Guaranty Corp.

The 2,000-yuan coin, with its depiction of a compass, is part of a series celebrating Chinese inventions and discoveries. Having a mintage suspected at only five pieces, it is the rarest gold kilo coin of China and maybe the rarest of all authorized coinage of China, according to Michael Chou, CEO of iAsure, parent to Champion Hong Kong Auctions.

The Compass coin eclipsed the previous record holder for a 1-kilogram coin, a 1994 Year of the Unicorn coin, according to Chou. The Unicorn coin realized 3.91 million Chinese yuan renminbi (about $602,326 in U.S. funds at the time) in a June auction by Chou’s firm.

Nicholas Brown, of Chicago-based Majestic Rarities, was one of six people in the room prepared to pay $1 million or more for the coin, according to Chou, noting that all six bidders had to be pre-approved. One bidder was from Singapore, one from Southeast Asia and three from China, with Brown rounding out the bold bidders.

Brown confirmed his participation in the auction with Coin World. “I really wanted that coin in the United States, and it didn’t happen.”

His maximum bid, he said, was $900,000 plus the 18 percent buyer’s fee, or $1,062,000, and he thought he could have acquired it for that price, if the opening bid had been $750,000 or $800,000.

“How many guys are going to pony up at $1 million,” Brown asked rhetorically. “But the first bid was $1 million. It was already higher than my maximum bid. In hindsight maybe I should have prepared to bid more,” he said.

Earlier record set

The new record price for a kilogram coin did not top the overall record price for a modern Chinese coin, established earlier this year by a Proof 1991 10-kilogram .999 fine gold 10,000-yuan coin that Chou purchased for a client for the equivalent of $1,567,190 in U.S. funds (Coin World, June 20 issue).

The Compass 2,000-yuan coin does, however, rank as the second most expensive modern Chinese coin sold at auction.

The abundance of high-visibility rarities in the Champion Hong Kong Auctions sale, which drew a lot of wealthy bidders to the auction, helped all of the lots, according to Chou.

Many people do not want to go home empty handed after a trip to Hong Kong, he said, adding, “It’s an ego thing as many of [their] fellow collectors are there.

“There was still a huge amount of buying power in the room to drive prices for the other coins in the sale,” Chou said.

Coin size is driving much of the marketplace, according to Brown. “Bigger is better. People like the gold kilos. 5-ounce gold used to be the standard, but as they finished their sets, they moved into 12-ounce gold coins. Now they’ve shifted again.”

The room was full of actual buyers and not agents, Chou said. This reflects the money pouring into the market for Chinese coins, Brown said, likening it to the second inning of a nine-inning baseball game. “You have new money coming in to the market every day. When rarities come out people are willing to pony up to get them,” he said.

How strong is the market for modern Chinese coins? Chou noted that the firm’s other auction, some 1,400 lots of material over three days, realized $4,052,155, or 20 percent less than the 186 lots of modern material.

Champion Hong Kong’s Modern China Auction III is scheduled for Dec. 4, in conjunction with the first Hong Kong Invitational Numismatic Convention.

The consignment deadline for that auction is Oct. 7.

For results from Champion Auctions’ other Hong Kong sale, find the story online at  www.coinworld.com/categories/market-updates/. ¦