From Launch to Legacy: An Insider's Guide to the Primary and Secondary Markets for Collectible Precious Metal Coins in Australia

If you don't already know this, the value of gold, silver and platinum has risen strongly for the past few years and they don't seem to be stopping any time soon. This change has brought about a renaissance in the market for modern collectible precious metal coins in Australia. Dormant collectors are bringing long-held coins to the market in quantities we haven't seen in decades, while growing numbers of new collectors are actively exploring fresh and rewarding ways of owning precious metals.

I've been active in this market as a dealer for 3 decades now, and I can see that new buyers are often hesitant when they enter the market - they often start out worried they'll get a return of their money, much less a return on their money. That concern can cause them to see only a fraction of the opportunities that are actually available to them.

Sellers coming to the market for the first time can find the process confronting to begin with - the demands asked of them can test muscles they've never had to use before. I see this novel challenge causing an undue amount of stress - it leads some to go around in circles chasing deals that simply don't exist.

For most of us, we became experienced through the school of hard knocks. Experiential learning takes time and can be expensive, yet it doesn't have to be this way. If a foolish collector repeats their mistakes and a smart collector learns from their own mistakes, a wise collector learns from the mistakes of others.

This article aims to explain how the secondary market for modern collectable precious metal coins really works. Once armed with these insights, I've seen many of our clients enter and exit the market with ease. They buy what they want, when they want. When they sell, they get the best deal available with minimal stress.

There Is A Primary Market and There Is A Secondary Market

The first thing buyers and sellers need to be clear about is that there is a primary market, and there is a secondary market for coins like this. They need to know that both of these markets have different dynamics.

A primary market can be where a manufacturer releases a product to market for the first time. One analogy I like to use is an IPO (Initial Public Offering) for shares. In an IPO, the company going public acts as the sole seller, it sets the initial share price through investment banks and determines how many shares to release. Institutional and retail investors either accept the company's predetermined price and terms of they don't - there's no negotiation or alternative source of these newly issued shares. The company controls the timing, quantity, and pricing, while investors face a binary choice: buy at the offering price or miss out.

Now, after the IPO is complete, those shares immediately enter the secondary market and they begin trading on exchanges. This is where the dynamics completely flip - multiple sellers of a share are often active in the market at the same time, while buyers have a much wider range of shares to choose from. Buyers and sellers are therefore competing, which causes prices to rise or fall based on supply and demand. On the secondary market, the company no longer controls their share price - market forces do.

This market dynamic can be seen in a range of product markets, not just in equities. Fine art and fine wine; jewellery and watches; motor vehicles; some consumer technology such as iPhones as well as popular collectables such as Pokemon cards and sneakers - all of these products have primary and secondary markets.

A Mint Enjoys Institutional Legitimacy

When it comes to modern collectible precious metal coins, the issuing mint enjoys a position of institutional legitimacy that goes far beyond typical market power. It controls every important factor related to a coin's initial release - the price, the mintage and the way the coin is allocated to dealers and collectors. 

Unlike a private company that collectors might view with skepticism, mints carry an aura of public trust and institutional integrity. Collectors presume without reservation that the mint operates with fairness and transparency as their sole guiding principles, even when broader commercial considerations are clearly at play. This perceived benevolence means buyers are much less likely to question pricing decisions or to consider that theirs is simply a commercial relationship with a manufacturer.

Government mints are of course guardians of national symbols and cultural heritage, and are not purely commercial entities. This custodian role elevates their products beyond being simple commodities - collectors feel they're preserving history rather than just making purchases. This emotional connection reduces price sensitivity and increases buyer loyalty.

A mint's quasi-governmental status implies a higher standard of regulatory oversight and consumer protection that is not presumed of a pure for-profit enterprise. Buyers assume the institution is watching out for their interests, which in turn reduces their due diligence and critical evaluation.

When the mint makes statements about mintage numbers, metal purity and historical significance, these statements carry the weight of institutional authority. Collectors rarely question the consequences of these assertions the way they might challenge a private dealer's claims.

This combination of market control and moral authority creates an almost unassailable position - the mint can exercise monopolistic pricing power while maintaining customer goodwill, something purely commercial entities struggle to achieve.

Once those same coins start being traded on the secondary market, the dynamics change instantly. In the secondary market, numerous collectors can be actively trying to sell a product at the same time - each one of those sellers can have different objectives, attachments to the product and timeframes.

On the secondary market, collectors can buy from a wide range of fellow collectors, dealers or auctions. They can compare prices, negotiate and pick the product and deal that best suits them. If they aren't focused on acquiring a very specific coin (such as a 1oz gold kangaroo coin dated 2024), they can also choose from a much wider array of coins that can meet the same need. They can buy a 1oz gold kangaroo coin with a different date, they can buy a 2024-dated 1oz gold coin with a different design or they can buy a completely different coin or set altogether. These factors mean the dynamic between buyers and sellers on the secondary market is completely different to the forces at play in the primary market.

Think of a fine dining restaurant that offers a degustation menu, where each course is paired with a carefully matched wine. That restaurant will only offer a very restricted number of seats at a fixed price, so if a diner wants that exact bespoke experience designed by that chef and sommelier, they need to pay the price. If the diner is prepared to put more time and thought into planning their meal, they can select their own dishes and wine, they can dine anywhere else they like to suit their budget and preferences. One is an easy choice that comes at a cost, the other has a higher mental load but may yield more benefits.

When we keep all of the above in mind, we can see that the collector who thinks they'll enjoy the same market power the Mint had when they bought their coin in a primary market is in for a rude shock when it comes time to sell in the secondary market.

New Releases Are Popular Because The Mint Assumes The Role of Market Maker

All of this is not to say that Mints are at fault when they market their products. One of the reasons new coin releases are so popular with collectors is because the mints assume the role of being market maker - they make the decision making process for buyers much easier than it otherwise would be.

Mints make no promises about future value appreciation or secondary market performance. They're selling collectables; their obligation ends with delivering the authentic product as described.

Mints cannot control or predict secondary market dynamics - factors like collector interest, economic conditions, and competing products all influence future demand. Buyers who assume current popularity or limited mintages *guarantee* future value are making speculative judgments that extend far beyond what the mint actually offers.

Mints are extremely transparent about what they're selling - the metal content, mintage numbers, and specifications. If buyers choose to overlay additional assumptions about rarity, future demand, or investment potential, that's on them!

Many buyers enter the primary market as collectors, they first buy on impulse and then out of habit. Very few make a truly considered choice about whether a particular coin or set is going to suit them for the long term.

So, what do the characteristics of the market mean for collectors, both as buyers and sellers? That is two different topics that deserve to be treated separately, you can read them by clicking on the links below.

Buying On The Secondary Market - Deftly Avoiding the Primary Market Premium

Selling on the Secondary Market - From Captivity Into the Wild