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8.5(2)
Details of the specifications of individual coins have been
hard to determine, chiefly because they are frequently changed as a
result of the sharp fluctuations in bullion prices. Although all the
agreements examined refer to the proposed specifications there is no
guarantee that they will be implemented, even for the first issue,
without some amendment. Understandably, responses to our request for
specifications have been somewhat mixed, and in several instances it
has therefore proved impossible to calculate with any accuracy the
relationship between bullion content and face value, particularly
where a territory has been issuing coins for some years and has
sanctioned frequent amendments. Formulae for invoking clauses which
permit such amendments vary in the US-style agreement. Occasionally it
is agreed that specifications may be adjusted to take account of any
movement of free market bullion prices outside a certain range.
common in recent contracts is a clause stating simply that amendments
to specifications may be discussed if there is any (unspecified)
change in bullion prices. As far as the UK companies are concerned
it appears that no provisions for amendments are required since
agreements are for one year only and little time lapses between the agreement and production of the coins.
8.5(3)
More
There appears to be no consistent relationship between
bullion content and face value, even allowing for fluctuations in the
market prices of gold and silver. There is, however, a tendency for the value of precious metal (as a proportion of face value) to be
greater in gold than in silver coins, although this may be a product
of the formula which rules the ultimate colour, hardness, etc. of the
alloy. None of the territories under consideration has, as yet,
experimented with other precious metals. As bullion prices* have
risen sharply over the last five years (Gold: US$65 end-1972, $195
end-1974, $135 end-1976, $165 end-1977; Silver: $1.68 end-1972,
$4.35 end-1976, $4.79 end-1977) those coins issued under early
agreements have, at current market prices, a higher precious metal
content than recent issues. It follows that those coins of similar
denominations produced at a time when gold prices were exceptionally
high (and thus contained correspondingly less gold) will at present
offer a poorer investment, although the investment value of a numismatic
issue may depend as much on its rarity and the attraction of its
design as on the bullion content.
*Bullion prices are quoted in terms of US$ per troy ounce of fine gold
or silver. The percentage fineness of bullion coins varies but is rarely greater than 0.925 and may be as low as 0.500 (see also Annex 2).