The announcement that the Royal Canadian Mint was selling off the Bank of Canada’s last holdings of gold coins came as a bit of a shock. As is the case with many collectors, I have been hearing rumours of near-mythical gold vaults under the bank building for years. It seems everyone knew someone, who knew someone, who knew someone, who had been given a glimpse of this fabled treasure. The problem for me was that nobody ever seemed to agree what was there. I had heard that there were hundreds of 1916C sovereigns, all in Mint condition. I had also heard that there was nothing spectacular, and even once or twice that there were a few hundred thousand Canadian $5 and $10 gold coins, and even that there was nothing at all.
However, for the most part, the collecting hobby agreed that there were thousands of gold coins sitting around waiting to be sold. The concern was always what would happen if these ever entered the market. Now using the Royal Canadian Mint makes sense; it is a Crown corporation, so there is no way there can be any sort of preferential treatment given to any company. What’s more, the profits, either through retained earnings or dividends, remain in the public pocket. The other thing that makes sense is that the vast majority of these coins, some 90 per cent, are going to be melted. As one collector remarked, it did feel a bit like burning books, but try to imagine the chaos that would ensue if nearly a quarter-million gold coins were poured into the Canadian market, even if it was done over a period of several months.
The entire $5 and $10 gold series would end up little better than bullion. As it sits now, the coins still represent a substantial increase in the number of coins available to collectors. The coins have been sorted into premium and select examples; presumably all the problem and rougher coins made the melting pot. However, the coins were retained in the same proportions as the banks’ holdings, and I personally doubt that every one of those more than 200,000 coins was looked at closely. What this means is that there are probably some select coins that may be as good as some premium coins, and it also means that none of these coins have been given an official grade by a third-party firm. The coins themselves are distinguished by different holograms. Even so, some of the really desirable stuff has already been scooped up by collectors and investors.
What will happen now is that the prettier coins will be broken out and sent to third-party graders, who will presumably offer their opinion while somehow retaining the RCM designation, possibly in the form of a suffix on the grade. While I am confident that the market can absorb all of these coins within a couple of months, I also expect that there will be some significant changes to population reports. I also think that some of our beliefs about condition rarity within this series will need to be adjusted. In this case, as much as I hate the idea of melting collectible coins, I think it will be good for the hobby as a whole. Now if we can just get a breakdown of how many of each date and denomination were melted.