In 1984, despite growing pressures against South Africa, the Krugerrand still held about two-thirds of the gold bullion coin market worldwide. By early 1986, that distinction belonged to the Maple Leaf.
Sales of American Eagle gold bullion coins began in October 1986 and the American Eagle quickly became the world’s leading gold coin. The British Britannia, Australian Nugget and other coins soon followed into the market. Some analysts predicted a 10-million-ounce-per-year market for gold bullion coins. However, they neglected to consider other changes in the financial markets.
By the end of the 1980s, the Canadian Maple Leaf had regained market dominance from the American Eagle, in large part because of demand for the pure gold Maple Leaf in the markets of Hong Kong and Japan. There the price of gold was low because of the extraordinary strength of the local currencies. But at the same time, North American and European demand for gold bullion coins declined because of the lack of inflation in the U.S. economy and the higher returns available from equity investments. As a result, overall sales of gold bullion coins in the latter part of the 1980s declined.
Market makers responded to this decline by repositioning bullion coins as both a bullion coin and a numismatic coin. In 1990, the Australian Nugget was reintroduced as the Kangaroo Nugget and its mintage was limited. The Chinese Panda was similarly marketed with limited mintages. Canada and the United States both began to rely on their Proof issues to supplement their regular marketing programs. The Krugerrand was relaunched in the United States in October 1999 with coins dated 2000. Officials of Rand Refinery Ltd., the company that issues the bullion version of the Krugerrand, said the relaunch of the coin in the United States was due to a surge in demand for gold bullion.
Silver bullion coins enjoy continued success. The American Eagle silver bullion coin, a 1-ounce pure silver dollar, is one of the world’s most popular silver coins. The governments of Australia, Austria, Canada, China and Mexico issue similar coins. Demand for these affordable coins continues unabated, in part because the silver bullion coins are less expensive than gold bullion coins. Silver investment demand is centered in North America, and because of the coins’ low cost in comparison to gold and platinum, a large gift market has developed, though retailers entering the second decade of the 21st century reported some resistance from casual buyers as the price of silver leapt well beyond $20 an ounce, even surpassing $48.
The above is an excerpt from the eighth edition of the Coin World Almanac, published by Amos Media Company in 2011.