Canada copies its gold coin in platinum
The Royal Canadian Mint did so well with gold that it has decided to go platinum. Canada will produce a platinum coin next year that will be similar to its gold Maple Leaf coin. That coin has surpassed South Africa's Krugerrand as the No. 1 gold coin in the world, with 55 percent of the gold coin market.Skip to next paragraph
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The United States Eagle is No. 2, with a 30 percent share and the bulk of US sales.
The new Canadian coin, to be known as the platinum Maple Leaf, will be sold in sizes of one ounce, half ounce, quarter ounce, and tenth of an ounce, the four sizes in which the gold coin is available. But the platinum coins will be more expensive, since the metal sells for about $543 an ounce, compared with $436 for gold.
``Platinum has actually dropped $100 an ounce over the past six weeks because of reduced tensions in South Africa and a reduction in worries about inflation,'' says Peter Hug, vice-president of Guardian Trust, a precious-metals specialist in Toronto. ``This new platinum coin will be popular in the United States and Japan. It probably won't be a big seller in Canada.''
The gold Maple Leaf coins sell at about a 4 percent premium above the gold price, and the platinum coins are expected to be the same, although the exact premium hasn't been announced.
The biggest market for the platinum coins is expected to be Japan. Last year the Japanese bought 745,000 ounces of platinum in the form of jewelry and coins, according to the Royal Canadian Mint.
Americans, though, are big buyers of the Noble, a platinum coin produced in the Isle of Man. Other platinum coins include the Australian Nugget - yet to be introduced - and Hong Kong's Dragon.
Canada uses its own gold to make the gold coins, but the platinum may have to be imported. Although Canada is the world's third-largest producer of platinum, it produces only 150,000 ounces a year. If Canada needs more, it will buy it from the Soviet Union, the world's second-ranked producer, because of a Canadian government embargo against South Africa, the No. 1 producer.
``We're not allowed to buy from South Africa. We will buy in the market and look for bars made in Canada, the Soviet Union, or maybe Colombia,'' says Murray Church of the Royal Canadian Mint in Ottawa.