There will be a certain nostalgic sadness for us gold business veterans as the gold Panda, darling of the 1980s bullion market, inevitably fades into the sunset. The Panda changed the retail gold bullion market completely, bringing an exciting product of high quality and artistry to compete with the rather humdrum choices minted by less imaginative national mints. The Panda coin program pioneered the idea of a collectible item selling for only a slight premium over its precious metal content, and was a huge factor in the growth of the retail gold bullion trade.

Before 1982, gold bullion was utilitarian and unchanging - strictly a product based on accurate weight and convenience of transaction. Bullion wasn’t collectible. Collectors only sought out the antique numismatic items of our monetary history.

When the Chinese Panda gold bullion coin was introduced in 1982, people really didn’t know what to make of it. It was issued in the standard bullion coin sizes that were pioneered by the South Africans with their Krugerrand, i.e., 1 troy ounce, ½ oz, ¼ ounce, and a tenth. It was priced to sell for the current spot price of gold plus a percentage, much as the other gold bullion products were, but the premiums charged by the Chinese and their distributors were slightly higher than those for the Krugerrands.

And the Pandas were much finer products than standard bullion items. Their surfaces had a high-quality proof-like mirror finish in which the portrait of the Panda (or the Temple of Heaven in Beijing on the reverse) contrasted sharply with the coin’s background, an effect with a lot of eye appeal. Each coin was individually sealed in plastic to protect its pure gold surfaces. And the decorative design featured a different panda, or pandas, every year.

Sales during that first year totaled some 38,000 ounces of gold Pandas. In comparison, over 2.5 million ounces of Krugerands were produced that same year. Gold buyers were reluctant at first to pay the higher premiums charged by the People’s Republic of China. Was it bullion, or a collectible?

Actually, it was both - and a raging success. The various renditions of cute Panda bears appealed to many, including the newer market of female gold buyers. Amidst the gold bullion choices of stolid Krugerrands, old-fashion bars, and the unchanging Maple Leafs, the Pandas were exciting. Each year, collectors eagerly awaited the new design (How many Pandas? Doing what? Are they as cute as last year?). In addition, many of the smaller size Pandas went into necklaces and bracelets, which further increased their visibility and popularity among the general public.

By 1985, annual Panda sales ran to some 207,000 ounces. The Panda was not only a popular collectible, but was taking bullion sales away from the Krugerrand and the Maple Leaf.

By that time, a strong secondary market had developed in the earlier issues, as collectors looked to have complete sets of the cute little Pandas going back to the original 1982 issue. By 1987 that first year 1-ounce gold Panda traded for over $3,000, if you could find one in its original condition, still sealed in plastic as issued by the China Mint.

The Panda gold coin program of the China Mint opened whole new areas of gold bullion investing, by pioneering a coin that was both bullion and, with its annual design change and limited mintage, a collectible. Other countries followed suit, including Singapore, Australia, South Africa, the Isle of Man, and others, including privately contracted production of varieties of collectible bullion coins in the era 1985-1990 (Does anyone remember the “Helvetia Matterhorn” series?). This period in the gold bullion market was the heyday of the “limited edition special issue” in precious metal bullion coins.

And like all popular fads, it was bound to come to a bad end.

The Chinese government took note of this mania, of course, and became the most aggressive promoter of the ‘limited edition’ aspect of these bullion coins. They expanded the Panda program into ‘special issues’ including proof sets issued in a fancy silk-lined rosewood box, plus different varieties of Pandas distinguished only by their mintmarks, and even giant ‘hockey puck’ size (5 and 12 ounce) gold coins.>br>

The peak of Panda popularity was reached in 1988, when 395,516 ounces were produced and sold. But the next year the world saw the Chinese army massacre student dissidents in Tiananmen Square. All of a sudden, the West’s image of China was no longer so warm and fuzzy. In 1990, sales of gold Pandas fell by two-thirds to 120,269 ounces, and went downhill for the rest of the decade.

By 1998, the China Gold Coin Incorporation managed to sell only 31,640 ounces of gold Pandas – fewer than they had sold in the premiere year of 1982.

Today, for some reason, the Chinese have decided that their 20th annual Panda design, which was introduced in 2001, will be good enough for 2002 and, we suppose, years into the future.

But what future does the Panda have if it doesn’t change its face every year?