In 2019, the Royal Canadian Mint (RCM) produced three official bullion coins engraved with a single orca—or “killer whale”—diving into the sea on the reverse. These coins, attractive as they may be, are proving quite negative to investor portfolios.
Many buyers are paying steep premiums for gold and silver orca coins, unaware these bullion coins are worth only the value of their precious metals content, and no more.
If you’re considering adding gold or silver orca coins to an investment portfolio, our message is to proceed with caution: this is not the first time investors have been misled when purchasing “exclusive Canadian bullion coins.”
What Are Canadian Gold and Silver Orca Coins?
These beautifully designed coins are offerings from the Royal Canadian Mint.
They are recent expressions of the RCM’s decade-long interest in issuing wildlife coins, starting with the 99.99% silver wolf coin, released in September 2010. Collectively, the coins make a poignant conservation statement.
The Royal Canadian Mint’s 2019 orca coins come in 99.99% pure silver and gold in varying weights and Canadian dollar (CAD) amounts:
|Silver Orca||99.99% Silver||2 oz||$10|
|Silver Orca||99.99% Silver||10 oz||$50|
|Gold Orca||99.99% Gold||.25 oz||$10|
Silver Orca Coin Design
Just as it would at Sea World and similar marine mammal parks, the orca whale takes center stage on the reverse of the coin, gliding confidently toward the ocean floor, leaving small waves, otherwise serene waters, and hilly coastline in its wake.
A pattern of radial lines borders the coin, at once enhancing the image and adding a layer of security. Within the lines are inscriptions describing the coin’s country of origin, mint date, and metal content and quality: “CANADA 2019” and “FINE SILVER 2 OZ ARGENT PUR,” respectively. “9999” is engraved below the mammal’s bottom fin and the Canadian maple leaf floats in the sky in the right corner of the coin.
On the obverse of these Canadian bullion coins—as well as all coins minted in the country—is the rendition of the head of Queen Elizabeth II by Vancouver-based sculptor and muralist Susanna Blunt. Shown in profile with short, neatly coiffed hair and a strand of pearls around her neck, the image of the Queen evokes order and tradition, a stark contrast from the depiction of wildlife on the reverse.
“ELIZABETH II,” the Canadian dollar denomination of “10 DOLLARS,” and “D.G. REGINA” are engraved in the radial lines bordering the coin.
Are 2019 Silver Orca Coins Good for IRA Investing?
Historically, investors have bought American Eagle silver coins, as well as American Eagle gold coins and American Eagle platinum coins, for their Individual Retirement Accounts (IRAs). Yet Section 304(a) of the Taxpayer Relief Act of 1997 added coins minted by any national government as IRA-eligible.
Adding legal tender coins comprised of at least 99.9% fine silver to a precious metals IRA is, of course, a legitimate and prudent form of asset protection. It offers a hedge against the potential devaluation of cash. It protects an investor from the constant—sometimes devastating—fluctuations in the value of securities, mutual funds, and bonds.
In short, investing in qualifying silver coins is an excellent way to fortify the security and value of a financial portfolio. Investors are free to compare prices of the available bullion products, select the IRA-qualifying precious metals they’d like to buy, and have them stored in an IRS-approved depository.
Given their precious metal content, the 2019 gold and silver orca coins should technically qualify as eligible precious metals for IRA investing. But here’s the rub.
A coin’s IRA value, and minimum distributions when taken in bullion, are calculated by the precious metal content of the coins actually held—not the premium prices charged by some sellers of the 2019 RCM orca coins. These orca coins are worth only their weight in gold and silver when it comes to reaping the rewards of placing them in a retirement account.
How High Are the Premiums on Gold and Silver Orca Coins?
At issue here is the difference between bullion and numismatic coins: bullion coins can be beautiful, but they are typically worth only their precious metal content. Numismatic coins, on the other hand, may command a premium for the unique value they add to the coin, whether that derives from their history, design, special marks, or rarity.
Coin dealers are charging steep premiums for the gold and silver orca coins, but are they rare or numismatic?
No. These are not rare coins; gold and silver orcas just appear to be rare because of 3 market conditions:
- 2019 was the only year the Royal Canadian Mint issued them.
- Only certain dealers are offering these Canadian wildlife coins and claiming exclusive distribution rights.
- The Royal Canadian Mint’s website does not feature 2019 silver orca coins, so collectors have no official information on the coins to reference, only private dealer claims.
The problem is collectors and investors have been misled to believe gold and silver orca coins are rare. They’re buying these bullion coins at premium prices wherever they might be found in stock. As bullion coins, gold and silver orcas are not worth much more than the spot price for the precious metals in them and should be priced accordingly.
How Much Have Investors Overpaid?
|2019 Silver Orca|
|Price Seen Online*||Dollar Amount|
Over Spot Price (i.e. Markup)*
|2 Ounce Silver Orca Coin||$61.22 Per Coin||$26.86 Over Spot Price (78.17%)|
|10 Ounce Silver Orca Coin||$306.11 Per Coin||$131.81 Over Spot Price (75.62%)|
*Note Spot prices for the precious metals in these coins may vary from the January 28, 2020 valuations in the above chart. Coin prices as seen online on January 28, 2020.
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Should You Include Silver in a Precious Metal IRA?
Diversification is a cardinal rule in investing. As most retirement accounts do not allow for keeping gold and silver, IRAs that do permit this additional form of diversification are in keen demand. They blend the benefits of buying assets, such as gold and silver, with the freedom to make pre-tax contributions and non-taxable investment decisions.
Silver is a particularly attractive addition for several reasons:
- Rising demand from private and institutional investors.
- Growing need for silver in solar panel production, the burgeoning electric car industry, and other industrial sectors.
- Protection against inflation and the decline of the value of the U.S. dollar and assets based on it.
Lastly, the price of silver can be less sensitive than gold to investor selloffs in a strong stock market, asserts technical analyst Fawad Razaqzada of Forex.com.