Which Rare Gold Coins Will Be Demand in 2014?

A few years ago, when my blog was more of a newsletter, I used to write an annual piece entitled “What’s Hot, What’s Not.” I’ve never had the heart to go back and look at these; analyzing my analysis has never had appeal. But these were popular features and I thought I would bring them back - but with a twist. Instead of pondering about what will be “hot” in 2014 and what won’t, I thought it would be more interesting to speculate on what are some potentially in-demand areas.

1. Coins Priced Below $2,500

As I write this, the market for interesting gold coins priced at $2,500 and below is extremely strong. Case(s) in point: I used to run a weekly e-mail based sale of coins I called E-Specials which were two or three interesting gold coins priced in the $750-1,250 range. I used to be able to go to a major show and buy a dozen coins like this so the E-Specials would be pre-set for a month or more. Now, I can’t find many coins like this anymore, and I’ve punted the E-Specials.

So, what qualifies as an “interesting” gold coin in this price range? From my selling experience with E-Specials, I found that the parameters that always met with selling success were: PCGS graded, CAC approved, and dated prior to 1880. The interest factor for coins in this price range was greatly improved when I offered large sized issues; i.e., eagles and double eagles.

If I had to list a few specific coins in the $1,000-2,500 price range that I feel will be in demand in 2014 and may show some appreciation as a result, I’d include the following:

• Dahlonega half eagles in EF40 and EF45. The level of demand for nice D mint half eagles is very strong now, especially if they are choice, original coins. In the last few years values have crept up from around $1,600-1,800 to around $2,200-2,500+, and I see no price resistance to even higher numbers for the right coins.

• With Motto New Orleans eagles in MS61 and MS62. I’ve written this before but if some clever marketer would quietly assemble a position in common and slightly better date With Motto (1888-1906) eagles from New Orleans, prices could go up 20-40% without anyone batting an eyelash. The possibility exists that set collecting could drive this series as no dates are rare and many are available even in MS63 and MS64.

• Low grade scarce/rare date issues.  One of the major changes in the rare date gold market in the last three to five years has been the sudden surge in demand for affordable examples of tough dates. As an example, a coin like an 1861-S eagle is too expensive in higher grades for most collectors. But a nice Fine or Very Fine can be bought for a few thousand dollars and if the coin is worn but cosmetically appealing, it has a strong level of demand that didn’t necessarily exist a few years back.

2. Coins Priced in the $5,000-10,000 Range

Coins in the price range are my “bread and butter” but I would say this middle range (“middle” at least in the sense of rare gold coins) is the weakest part of the coin market going into 2014. Collectors who buy coins in this range are far more selective now than they were a few years ago, and a coin has to have an “it” factor to sell for $5,000, $7,500, or $10,000. I’ve invented a term called Multiple Levels of Demand to define what I regard as coins that have “it.”

As with coins priced below $2,500, coins priced at around $10,000 have to be interesting, and they have to have good visual appeal. Here are a few areas that I think will be in strong demand in 2014.

• Properly grade AU58 branch mint quarter eagles and half eagles. Nice slider examples if southern branch mint gold coins remain one of the best values in all of 19^th century numismatics. As I’ve explained before, a properly graded AU58 (not a coin that “looks like an MS64;” these don’t exist) is a coin that is being rewarded for positive eye appeal while a typical MS60, MS61 and even an MS62 is a coin with faults which are being punished. Most collectors would rather have a nice, natural AU58 Dahlonega half eagle at $5,000-6,000 than a “rubby” MS61 at $9,000-$11,000 and it is hard to blame them.

• Better date Three Dollar gold pieces. This is a series that has been out of demand for too long and with a little bit of promoting, I could see some improved level of collector demand in 2014 and beyond. There are some great values in this series right now and, interestingly, there are more nice coins available in the $5,000-7,500 range than in many other comparably priced types.

• MS64+CAC Indian Head gold.  From what I’ve seen, the quality of MS64+ Indian Head quarter eagles, half eagles and eagles is pretty nice and the typical example is visually better than MS64. As long as premium aren’t excessive over an average quality MS64, I can see the market expanding even further for these coins in 2014; especially when the price jump to MS65 is at least double or triple.

3. Coins Priced at $20,000 and Over

At this level, the air gets a lot thinner, but the market for nice quality expensive (notice I said “expensive” and not “trophy”) coins is as strong now as I can recall at any time since 2006-2007. Buyers of expensive coins are very discriminating (as they should be), but in my experience, the “right” coins in the $20,000-50,000 range are selling very well and will continue to do so in 2014.

There are a number of areas which fit into this category which I think have good upside in 2014. Here are a few of them.

• Really exceptional branch mint gold coins in MS63 and MS64. If you look at auction prices from 1999-2001 and compare the values of a coin like an 1847-C quarter eagle in PCGS MS64 then versus now, you will typically see a slight overall decline. There are a number of reasons for this, not the least of which is that many coins have been graded MS63 or MS64 which are not nice. But in my opinion, a choice, original CAC-quality Dahlonega half eagle in MS63 or a beautiful, naturally toned Charlotte quarter eagle in MS64 is truly rare. These coins may not have date collector demand in these high grades but there are numerous type collectors looking for one or two great coins in all of these series. Watch for demand to increase in 2014 and beyond.

• Rare date Proof gold in PR64 and PR65. Many of the Proof gold coins from the 1860’s, 1870’s and early 1880’s have tiny original mintages and fewer than half are known. Despite the rarity of a coin like an 1874 quarter eagle in Proof, the focus has been more on large denomination coins (eagles and double eagles) or super-grade pieces in the PR66 to PR68 range. While they are not often available, comparably “affordable” Proof gold dollars, quarter eagles, three dollar gold pieces and even half eagles seem to be increasing in demand and I see no reason that this will not continue through 2014 and beyond.

• Truly rare business strikes in Condition Census grades. The level of demand for formerly obscure business strike rarities will increase in 2014 as well. One thing I noticed in 2013 was that when I listed a choice, higher grade example of a truly rare coin on my website, I got multiple inquiries and not just from the “usual suspects.” As an example, I listed two very nice 1863 half eagles on my site in 2013 and I heard from numerous collectors for each of them, including two silver dollar collectors who wanted to buy an 1863 “just because it was cool” and a few dealers who I’ve literally never sold a coin to before.

4. Trophy Coins

In virtually all collectibles areas, the truly great “trophy” items are in huge demand and this will continue in 2014. The NGC MS63 Brasher Doubloon that will be sold by Heritage in a few weeks at the 2014 FUN auction could very well set a record for any coin - and there will be a number of million dollar+ coins in this sale and other auctions immediately afterwards.

A decade ago, the sale of a million dollar United States coin was front-page news; today it is relatively commonplace. As more “big money” discovers the coin market, I look for many exceptional prices realized in 2014, both at auction and via private treaty.

Do you buy rare gold coins?

Do you have coins to sell?

Would you like to have the world's leading expert with you assembling a set of coins?

Contact Doug Winter at (214) 675-9897 or by email at dwn@ont.com.

Pricing "Difficult" Coins: A Real World Model

I have written a number of blogs in the past few years about how I price rare coins. Despite this, I still get many questions from new and experienced collectors about pricing. I'd like to share a specific coin that I recently handled and explain how I came up with buy/sell prices. As I have written, I find many of the published price guides to be of little or no use when it comes to complex, infrequently traded coins. When I make decisions at shows, in my office, or in the auction room on what to pay for a coin, I tend to put a lot more credence in auction records. So, if you'd like to play at home, I suggest that you follow along with the PCGS auction archives on pcgs.com as this is a major source of information for me when I make pricing decisions. Here is a "real world" model and the thought process(es) that went along with my pricing decision.

1863 Half Eagle, Graded MS60 by NGC and CAC approved

This is a coin I handled earlier this year and it is one of the first pieces in a while that, as soon as I saw it, I said "I have to own this." Before I discuss my thoughts about how to price it, let me discuss a little about the issue and about the coin itself.

Only 2,442 business strikes of this year were made and my experience is that the 1863 half eagle is rare in all grades, especially in AU50 or better. I jogged my memory and couldn't recall having seen an example I thought was better than AU53 to AU55 in more than a decade. And, I remembered that this was an issue that typically comes with zero in the way of eye appeal. A quick look online showed me that the PCGS population was none for Uncirculated coins and five for AU58; NGC had graded two in Uncirculated (an MS60 and an MS61) and five in AU58. At the time, CAC hadn't approved a single 1863 in any grade; a good indication that the eye appeal of the typical example was not good.

(How can you, even without my experience, make the same conclusions? Look at the pictures of the 1863 half eagles sold at auction during the last ten years. Are the coin fresh and original or are they bright, abraded and processed? Then, look at the number of auction records. A quick scan of the PCGS archives showed a total of 30 records since 1941. What was immediately impressive to me about this figure was that the highly-regarded 1864-S half eagle had 32 auction records in that time period!)

Of course, all these statistics are just gobbledygook if the coin itself isn't "all there." As you can see from the photo above, this coin had really good eye appeal. In fact, my first question was "why is this only in a 60 holder?" (I recently overheard heard a wholesale dealer, who I regard as one of the top three graders in the world, refer to the MS60 grade as "dumb" and that he "hated it." I tend to agree with him but, in this case, I was smitten with the coin; even it was in the funkiest of all Mint State grades.)

So, at this point I was sold. What would I pay?

With no auction records for an Uncirculated coin, I looked at AU58's. The two most recent sales were $14,950 by Stacks Bowers in August 2012 and $14,375 by Heritage in May 2010. A quick look at images for both coins showed two pieces that were no better, in my opinion, than AU53 to AU55. So, after digesting this, I decided that I would pay at least $17,500-20,000 for a coin that was a real, CAC-quality AU58 (the last "real 58" I had seen was the Bass II coin which sold for $13,800 back in 1999...).

Having concluded that a "real" AU58 was worth as much as $20,000, I figured it would be OK to pay at least $30,000 for a really nice MS60. I wanted confirmation and then decided to see if there were comparable coins that had recent auction records in this grade. Back to the archives I went.

I didn't really find any good comparables for the 1864-P and 1865-P, two dates that I regard as somewhat similar to the 1863; at least in terms of overall desirability. I then looked at the 1863-S; an issue with 17,000 struck but a low survival rate. I believe that this date is about twice as available as its Philadelphia counterpart but, like the 1863-S, it is extremely rare in AU58 and above.

In their June 2011 auction, Stacks Bowers sold a nice NGC AU58+ 1863-S for a remarkable $25,875. This was the single best example of the date that I had seen in years and I thought the price realized would be strong but I was clearly not expecting a winning bid of over $25,000. But this was as good a comparable as I could find and it made me think that if a "gem slider" 1863-S half eagle was worth nearly $26,000 then a somewhat nicer example of a decidedly rarer date (the 1863-P) had to be worth at least $30,000-32,500.

After negotiations, I was able to purchase the 1863 half eagle in this price range. I sent it to CAC where it was approved, thus becoming the first and only stickered example of this date. I listed it for sale in the mid-30's and within a few hours I sold it to a specialist who had been looking for a high grade 1863 half eagle for many years.

And what exactly does this all prove? Here are a few thoughts that I gleamed:

1. With CDN Monthly Summary showing a "bid" of $20,000 for this date in MS60, I knew that I wasn't going to get any help from published price sheets. But that's not a surprise, given that no MS60 coin had ever traded.

2. A few things convinced me to stretch on this coin: its true rarity in all grades, its Civil War date of issue and its great eye appeal. But if I had been offered an 1863-P half eagle in MS60 that was ugly and processed, I might not have figured it for much more than the $20,000 or so that I decided a properly graded, attractive AU58 was worth; maybe even less, in fact.

3. When you are contemplating a purchase of a coin such as this 1863 half eagle, you have to be prepared to stretch. My quick analysis made me think it was a great deal at $25,000 and probably too much of a stretch at $40,000. So, at $30,000 I was still all in and at $35,000 I probably would have been as well but not without some complaining to the seller.

4. How effective is the comparable method I mentioned above for determining value? It can be very effective but it is fraught with potential landmines. Let's say there was just one comparable and it was from over a decade ago--would that be effective? Or what if there were three records and one was 100% higher for a comparable coin) than the other two--would you, as an informed buyer, know the circumstances behind this sale? Is it effective to compare a coin like an 1863 half eagle to, say, an 1863 eagle? Or is this too much of an "apples to oranges" scenario.

5. The bottom line is that no matter how pseudo-scientific we as dealers or collectors try to make pricing, a lot of the numbers that get placed on really rare coins are instinctual. If you are knowledgeable, you'll have a gut feeling that the price is "right" or its "wrong."

Would you like to read more about my thoughts on coin pricing? If so, feel free to email me at dwn@ont.com and fire away with some off your questions.

Assembling a Date Set of Civil War Gold Coins: Part Two, 1863

The first installment of this three-part article discussed the various Civil War gold issues struck in 1861 and 1862. The second part looks at the very interesting gold issues from 1863; a pivotal year in the history of the brutal war and a very significant year in the annals of American numismatic history.

1863 Gold Dollar: While 6,200 business strikes were made, this is a rarer date than most casual collectors know. I regard it as the single rarest gold dollar from the Philadelphia mint; rarer even than the 1875 with a mintage of just 400 pieces. The odd thing about the 1863 is that when available, it is likely to be found in the lower Uncirculated grades. As an example, there are a total of forty graded by PCGS but over half of these (twenty one to be exact) are in Uncirculated. There are a few Gems known. The finest is an incredible PCGS MS68 owned by a California specialist that, I believe, is from the Brand collection. There is also a PCGS MS66 that is owned by a collector.

This is an issue that is well made but one which tends to have problems with original surfaces and luster. I have seen a few really nice 1863 gold dollars but most have been cleaned or dipped and have poor eye appeal as a result. Any nice example of this issue is very desirable. For the advanced Civil War collector, the opportunity to acquire a piece grading MS64 or above would be quite special and should be looked at as important.

1863 Quarter Eagle: As you might recall from the first part of this series, the mintage for the 1861 quarter eagle was an absurdly high 1,283,878. Thus, there was no real need for business strike quarter eagles in 1863. The 1863 is a proof-only issue with just thirty struck. This makes it a key rarity in the Civil War gold set and, of course, the single rarest (and most expensive) issue from 1863.

There are around twenty 1863 quarter eagles known. Most are in the PR63 to PR64 range but there are a few gems remaining including some with lovely Deep Cameo contrast between the devices and the fields. I know of at least four or five PR65's and there may be a few more. The current auction record for this date is $149,500 for Heritage 1/07: 3107, graded PR66UC by NGC.

I have mixed feelings towards the 1863 quarter eagle. In some ways, I think it is a very undervalued issue as it is the third rarest Liberty Head quarter eagle (after the 1854-S and the 1841) in terms of total known. But if you look at it merely as a Proof issue from this era, it sells for a huge premium over dates like the 1864 and 1865 which are actually as rare--if not rarer--in terms of the total known as Proofs. What needs to be remembered is that if collecting Liberty Head quarter eagles by date ever becomes fashionable, the demand for this date is likely to exceed its supply and today's price levels are inevitably going to seem cheap.

1863-S Quarter Eagle: As you might expect, the 1863-S quarter eagle tends to be overlooked due to the rarity of its Proof-only Philadelphia counterpart. With just 10,800 struck, it is scarce in its own right. There are an estimated 100-125 extent with most in ther VF-EF range. An accurately graded AU50 to AU55 1863-S quarter eagle with nice color and surfaces is scarce and a properly graded AU58 is very rare. There are three or four in Uncirculated including two Gems: ANR 3/06: 1457 that sold for $50,600 (it is ex Eliasberg: 198) and the Dodson: 41 example that brought $18,700 all the way back in May 1992 when it was sold by Mid-American.

There are a few examples known of this date that are very weakly struck at the centers; this seems to be the result of an improper alignment of the dies. Most are well detailed but have unoriginal surfaces. The natural coloration for this issue is a medium to deep rose-gold to reddish hue which can be very appealing. For most Civil War date collections, a nice AU example of the 1863-S quarter eagle will suffice but I think Uncirculated pieces, if available, are good value.

1863 Three Dollars: This is one of the odder issues from the entire Civil War era. With just 5,000 business strikes made, you would expect the 1863 three dollar to be a rarity. While it is reasonably scarce from an overall standpoint, it is the most available Civil War issue of this denomination in Uncirculated and there are actually as many as a dozen to fifteen Gem to Superb Uncirculated pieces known. I have seen 1863 Threes that grade as high as MS67 to MS68 and I know of an example in a well-known dealer's collection (graded MS67 by PCGS) that is probably the single best business strike Three Dollar gold from the Civil War era of any date.

Nearly all 1863 Threes have prominent clashmarks at the centers and numerous mint-made die striations in the fields. The quality of strike is usually sharp and the luster tends to be excellent. There are a number of outstanding examples known and the collector should be able to find a great piece for his Civil War set. I'd suggest at least an MS64, if not a Gem.

1863 Half Eagle: There were 2,442 business strike half eagles made at the Philadelphia mint in 1863. There are around three dozen known today and while a number have been graded AU50 and better by NGC and PCGS, this is an extremely rare coin in higher grades. It is unknown in Uncirculated and I have seen maybe six to eight that I thought were truly About Uncirculated. The best I can recall was the PCGS AU58 Bass II: 1143 coin which went cheaply at $13,800 and it has been years since I've seen an AU example with even the slightest amount of eye appeal.

This is a date that saw quite a bit of circulation and the few that survived the melting pot tend to have excessive abrasions on the surfaces. In addition, nearly every 1863 half eagle that I have seen has been cleaned or dipped. As a result, examples with even decent eye appeal are exceedingly rare and the collector who only wants nice, original coins for his Civil War date set is going to find the 1863 half eagle to be a very frustrating issue. That said, I'd suggest waiting for the best available piece which is likely to be around AU55 or so.

1863-S Half Eagle: Demand for gold coins remained high in the western states during the Civil War and the mintage figure for the 1863-S half eagle was 17,000; nearly seven times more than for the 1863 Philadelphia half eagle. The 1863-S is certainly not seven times more available than the 1863-P; it saw heavy use in commerce and was later melted extensively. I have seen estimates that as many as sixty to seventy-five are known but this seems high; the likely number is more like fifty to sixty-five with most of these in very low grades. There is a single 1863-S half eagle known in Uncirculated (it is graded MS61 by PCGS) and there are maybe as many as seven to ten in AU. The current record for the date is $25,875 set by the NGC 58 sold as Lot 9489 in Stack's 6/11 auction.

When available, this date is found with better eye appeal than the 1863-P but not by much. The luster tends to be decent but most 1863-S half eagles are abraded (often heavily) and show evidence of cleaning or dipping. Any coin with original color and surfaces is rare and desirable. The Civil War collector should look for a nice AU53 to AU55 for his set.

1863 Eagle: And now we get to my favorite 1863 gold issue: the 1863-P eagle. The mintage of this issue is a tiny 1,218 business strikes and by most accounts, there are around thirty or so known. The 1863 is the second rarest Liberty Head eagle from this mint after the 1875 and it is one of the hardest issues of the entire design to locate in all grades despite not being all that well known. This date is unique in Uncirculated (a PCGS MS63) that is ex Bass IV: 683 (at $52,900) and earlier ex MARCA 9/91: 755 (sold to Harry Bass for a then-remarkable $104,500). There are around six to nine known in About Uncirculated and I can't recall having seen more than two or three that I felt were AU55 or AU58.

My comments for this issue are very similar to the 1863-P half eagle. It is a coin that saw rough use in commerce and the few that survive tend to show numerous abrasions, often in obtrusive locations. You can almost forget about eye appeal when it comes to this date, but I'd say that if you ever have the chance to obtain an 1863 eagle with an even remotely decent appearance, I'd suggest you approach it aggressively.

1863-S Eagle: There were 10,000 eagles struck at the San Francisco mint in 1863. This is a rare issue although not as much so as the 1863-P. I believe that there are around fifty or so known with most in the EF40 to AU50 range. As surprising as it seems, there may be as many as three 1863-S eagles known. The best is a PCGS MS61 that is ex Heritage 10/95: 6330 and before this was in the Norweb collection. The Bass IV: 684 coin was also a PCGS MS61. NGC has graded an MS61 that was last sold as Goldberg 2/09:1535. There are also a few reasonably nice AU's known including at least one from the S.S. Republic graded AU58 by NGC.

As with nearly all SF Civil War era gold, the 1863-S eagle is seldom found with natural color and surfaces. It is an issuee that is somewhat better made than in its half eagle counterpart and the few higher grade pieces known have better than average quality luster. This will not rove to be as challenging an issue to find as the 1863-P eagle but it is a rarity in its own right and any collection that has a nice AU55 or better example will probably never need to improve upon this.

1863 Double Eagle: After the 1862, the 1863 is the hardest Philadelphia double eagle from the Civil War to locate. There are a few hundred known in all grades with EF40 to AU50 examples being the most often seen. This date becomes scarce in the higher AU grades although it is far more available than, say, the 1863-P half eagle or eagle. In Uncirculated there are around two dozen known with most in the MS60 to MS61 range. The finest known is a single MS64 graded by PCGS; I believe this was once sold as Akers 8/90: 1960 and it brought $41,800 long before the Type One double eagle market was as active as it is today.

This is a well made issue that is better struck than the 1863-S double eagle and generally less abraded as well. The patient Civil War gold coin collector should be able to locate a nice AU example without much of a problem. An Uncirculated coin, at least in the MS60 to MS61 range, will be available from time to time as well. Anything that grades MS62 or finer will prove extremely hard to locate.

1863-S Double Eagle: The mintage for this one issue (966,570) is considerably more than all the other San Francisco gold denominations combined. Much of the newly discovered gold from California and Nevada was being used to produce double eagles and these coins saw active use in commerce.

The 1863-S double eagle is the most common gold coin of this year in circulated grades. It is possible to procure a presentable example in the $2,000-3,000 range and a nice Choice AU for around $5,000. In Uncirculated, the rarity of this date takes on a different profile. The 1863-S is scarce in MS60 to MS61 and very rare in properly graded MS62 with maybe five or six known. In MS63 there are probably another three or four. The finest known is currently an NGC MS64* that recently sold for $43,125 as Lot 5041 in the Heritage 1/12 auction.

As a year, the 1863 is one of the most interesting of the Civil War era. It is a year that has some really scarce coins but unlike the 1861, it has nothing that is impossible to find at any price (the 1861-P Paquet) or expensive due to its rarity and/or popularity. 1863 is a year that will prove extremely challenging to locate in higher grades and there are no "slam dunk" issues like the 1861 and 1862 gold dollars that will be easy to locate even in Gem grades.

In the upcoming third and final installment of this series, we will look at the 1864 and 1865 gold coinage. If you have questions or comments about these--or any--coins, please feel free to contact me via email at dwn@ont.com