What Killed the New Orleans Quarter Eagle Market?

If you had asked me a decade ago which series of New Orleans gold coin had the most upside potential I would have replied, “quarter eagles.” This was a series which has everything going for it. It is short-lived (a total of 14 issues were struck from 1839 through 1857), affordable (at the present time, nearly every issue can be found in nice AU grades for less than $3,000), interesting from a historic and numismatic perspective, and much easier to complete than the half eagle, eagle, and double eagle series from this mint.

A decade ago, interest was soaring in the New Orleans quarter eagle series and prices appeared to be rising as well. But something went terribly wrong and this series, in many cases, is worth less than it was ten years ago; at the same time when many other New Orleans gold coins have shown excellent price appreciation. What killed the New Orleans quarter eagle market?

To answer this question, I am going to look at some theories of mine. I am also going to randomly choose four different issues in four different grades and compare prices from a decade ago to today.

1. Grading Standards Were Not Upheld by Both Services

A decade ago, standards for New Orleans quarter eagles were fairly tight. As an example, if you were offered an AU55 1852-O quarter eagle in 2003, the chances were good that this was a decent to choice coin with some luster present. Today, many of the 1851-O quarter eagles that I see in AU55 holders are, in my opinion, not much better than EF45 in terms of sharpness and overall quality. While this inflating of grades has occurred in many dated gold series, for some reason it has always seemed more obvious in the New Orleans quarter eagle series. Coupled with the fact that certain New Orleans quarter eagles have strike and manufacturing problems, this gradeflating has made the series fairly unappealing to new collectors and purists alike.

2. Populations Are Hugely Inflated

I don’t have immediate access to population figures from 2003, but it seems to me that both NGC and PCGS have hugely inflated numbers for coins like the 1851-O in AU55 that I mentioned above. A quick look at this month’s online figures show that PCGS has graded 20 in this grade while NGC has graded 102. I can live with the PCGS figure, although I think the actual number of accurately graded coins in this grade is fewer than ten. But the NGC figure of 102? Not only is this grossly inflated, it gives the impression that an AU55 1851-0 quarter eagle is a relatively common coin. Interestingly, CAC has only approved three AU55 examples of this date. One would think that a coin with an NGC/PCGS population of 122 coins would have more than three approved by CAC…unless not many of these “122” coins are CAC quality.

3. Small Coins Lose Popularity

Clearly, small coins like gold dollars and quarter eagles have lost some popularity in the last decade as collectors get older and little coins grow harder and harder to see. Just as New Orleans double eagles have taken on an unprecedented degree of popularity in the last decade, small coins like New Orleans quarter eagles (and gold dollars) have ebbed in demand. Not that this is not true across the board: popularity levels for Dahlonega small-sized coins are at an all-time high, and Charlotte gold is becoming more popular after years of neglect. But in the New Orleans arena, it is clear that the focus is on big coins and small coins, at least for now, are the losers.

4. Quarter Eagles Never Had a Promotion

You can make a strong case that the New Orleans double eagle market got jump-started by a promotion a decade+ ago and has since become a fully functioning, collector-based market. The New Orleans eagle market has been promoted to the extent of the double eagle market but it has found a solid collector base. The same can be said, although to a lesser extent, for the half eagles from this mint. This just hasn’t been the case for the quarter eagles. No one has gone out and bought 50 or 100 nice AU to Mint State quarter eagles, written a compelling script and sold them on TV (don’t snicker; it could and probably should be done…) This lack of promotion, combined with a general market malaise towards quarter eagles has made this the softest single series of gold coins from this mint (with the exception of two dates which we will discuss later in this article).

Now that I’ve dispensed with my theories, let’s take a look at some specific dates/grades in this series and see how they have performed in the last decade. Be aware that the sample size I am using is very small, but the prices are based on average quality coins trading at public auction; all are coins which I have viewed in person.

 1840-O Quarter Eagle, AU55

The 1840-O has some degree of numismatic significance as it is the first Liberty Head issue from this mint. It is relatively scarce in AU55 and this is a popular grade as this date becomes very expensive in Uncirculated.

• NGC AU55: $2,070; Heritage 2/11: 4377

• PCGS AU55: $2,760; Heritage 1/10: 3818

• NGC AU55: $2,588; Heritage 3/04: 6093

• PCGS AU55: $2,875; Heritage 11/03: 7143

The price performance of this date in AU55 has been mediocre at best. An NGC coin is probably not an easy sale at just a touch over $2,000, and part of this has to do with the current population of 20 in this grade with a whopping 41 finer. A PCGS coin at $2,500 would probably be an easier coin to sell as the population in this grade is just eight (with 18 finer). It is interesting to note that CAC has approved just one in AU55, and my guess is that a choice, original piece with a CAC sticker might be worth as much as $2,750-3,000, regardless of whether it was graded by NGC or PCGS.

1843-O Small Date Quarter Eagle, MS62

The 1843-O Small Date is the most common New Orleans quarter eagle, and the second most available in Uncirculated. In MS62, it is fairly scarce and I have always felt it was undervalued. What makes this coin interesting, to me at least, is that it is the only affordable O mint quarter eagle from the 1840’s in MS62, and I’ve always felt that this should expand its desirability beyond specialists.

• NGC MS62: $2,585; Heritage 4/13: 5494

• PCGS MS62: $2,291 and $2,585; Heritage 6/13: 2585, and Heritage 10/12: 5546

• NGC MS62: $2,185; Heritage 1/03: 4667

• PCGS MS62: $2,530; Heritage 1/03: 8447

These auction prices are a bit misleading as they don’t show that for a few years between 2006 and 2009, a nice MS62 example of this variety was worth in the $3,000-3,250 range. Prices have stayed flat over the past decade and I don’t attribute this to gradeflation as the PCGS population has stayed at a reasonably low 14 coins in MS62, while NGC has graded 26. I’ve owned most of the PCGS MS62’s and the quality is usually pretty presentable; certainly nice enough to be appealing to a non-specialist who wants a cool, higher quality branch mint quarter eagle from the 1840’s for not a lot of money. I’m kind of at a loss as to why this isn’t a $3,500-4,000+ coin.

1852-O Quarter Eagle, EF45

To avoid being pegged as an elitist, I thought it would be interesting to take a quick look at prices for an inexpensive yet reasonably interesting coin like an 1852-O quarter eagle in EF45. This is one of the more common quarter eagles from this mint in a lower than normal grade, but at less than $1,000 it provides a good amount of bang for the buck.

• NGC EF45: $446; Heritage 3/12: 8726

• PCGS EF45: $403; Goldberg 2/12: 1202

• NGC EF45: $604; Heritage 7/04: 8026

• PCGS EF45: $633; Heritage 11/03: 7196

I’m not totally surprised by this price drop over the last decade. Even though gold has increased from a range of $363-409 in 2003-2004 to four times this amount today, many gold coins like an EF45 1852-O quarter eagle have performed poorly. It all boils down to supply and demand, and there are a lot more 1852-O quarter eagles in EF45 than there are collectors who wants one; even at the bargain price of $425.

1857-O Quarter Eagle, MS62

As our final example, let’s look at a coin that I think perfectly defines the term “condition rarity.” The 1857-O is the final year of issue for New Orleans quarter eagles. A total of 34,000 were struck and survivors are pretty common in circulated grades. But in Uncirculated, the 1857-O is very scarce with just two dozen or so known; mostly in the MS60 to MS61 range. I believe that there are around six to eight properly graded MS62 to MS63 coins accounted for; PCGS has graded 14(!) in MS62 with four finer while NGC has graded seven in MS62 with nine (!) finer. CAC has approved four coins in MS62, suggesting that the typical quality of at least some of these higher grade 1857-O quarter eagles is above-average.

• NGC MS62: $6,038; Heritage 10/11: 4702

• NGC MS62: $8,338; Heritage 2004 ANA: 7152

The population of this date in MS62 was much lower than its current 21 coins, which makes the 1857-O appear to be a somewhat available date in this grade. I would strongly disagree with this statement, however, as in my experience a properly graded MS62 1857-O quarter eagle is very rare and collectors are being misled by the combined NGC/PCGS figures.

I’ve stated throughout this article that the New Orleans quarter eagle market is “dead.” This isn’t wholly true as there are two issues, the 1839-O and the 1845-O, which have increased in popularity and, I would presume, price. Why is this?

The 1839-O is a first-year-of-issue and a one year type so it has multiple levels of demand. This is clearly why other Classic Head coins like the 1838-C half eagle and the 1838-D half eagle have soared in value in recent years.

The 1845-O is a key issue with a low mintage figure of 4,000. It used to be very undervalued but it has become popular in recent years and it now has demand outside of the specialist community; primarily among collectors who like coins that are “cool.”

Let’s quickly look at price levels on these dates for now and around seven-eight years ago.

1839-O Quarter Eagle, AU55

• NGC AU55: $5,581; Heritage 4/13: 5480

• PCGS AU55: $5,581; Heritage 9/12: 4775

• NGC AU55: $2,530; Heritage 5/05: 8427

• PCGS AU55: $4,370; Heritage 91/05: 8767

I think the price increase for this date in AU55 is actually even more dramatic as a CAC/PCGS AU55 would actually sell for $6,500-7,000 today, and a coin of this quality would have only been worth around $3,000-3,500 in 2004-2005. And the increases in price for this date are even more dramatic in AU58 and the lower Uncirculated grades.

1845-O Quarter Eagle, AU50

• NGC AU50: $6,325; Heritage 4/11: 6317

• NGC AU50: $4,025; Heritage 7/03: 10126

Again, this is a coin whose limited auction records for AU50 examples in the time period which we are exploring is misleading. The 1845-O has shown good price appreciation in grades from VF to AU58 and I believe it will continue to do so as a result of its multiple levels of demand.

And what’s the fate for the typical run-of-the-mill New Orleans quarter eagle? It’s probably not a rosy future. I don’t see collectors caring much about coins like 1851-O quarter eagles in AU55, or 1854-O quarter eagles in AU58. Unless there is a sudden influx of collectors wanting to do complete sets, the price appreciation for this series is likely to be limited to those coins with multiple levels of demand, Finest Known, or high Condition Census examples of not-so-interesting dates or specific individual coins with great eye appeal.

If you’d like to learn more about New Orleans quarter eagles or rare gold coins in general, please contact me at dwn@ont.com.

What Gives a Coin the "Wow" Factor?

At shows or while viewing auctions, I look at a lot of coins. Most leave no impression, some make me pause for a moment before I resume looking at more coins and a small number get me to stop everything else I'm doing (I'm a notorious multitasker), exclaim "wow" and get my thoughts immediately oriented towards "how do I buy this coin and what will I have to pay for it." There are not alot of coins with this "wow" factor but I find that nearly all the coins that excite me have one or more things in common. What are some of the things that make a coin special for me and how do they affect my decision to purchase them?

1.  Great Scarcity.  I deliberately didn't say "great rarity." Obviously, if I'm looking at lots in a Heritage sale and I see an 1854-S quarter eagle which looks like it was run over by a train, I'm still going to stop, look at it carefully and probably figure a bid. But I'm more likely to be impressed by a coin with great relative scarcity within a series. In other words, if I see a real Uncirculated 1870 quarter eagle (a date which is almost never available in true Mint State), I'm likely to be "wowed." This isn't necessarily an expensive coin but I'm more likely to be stopped in my tracks by a CAC-quality MS62 1870 quarter eagle than I am a far more expensive but far more often seen issue.

As you become more familiar with a series, you learn what dates are seen with regularity (even if they are perceived to be "rare") and which just don't turn up very much. As an example, I was at a show recently and was offered a Proof example of a date which I hadn't remembered seeing in some time. I did a quick search through auction records and noted that this date became available at a rate of about once every four or five years. The coin itself wasn't a Gem but it had a decent appearance and it was priced fairly. I was happy to buy it for my inventory.

  2.  Great Eye Appeal.  Eye appeal is best defined as a combination of factors (strike, luster, color, preservation of the surfaces) which combine to make a coin attractive. Most savvy buyers have one or two hot buttons which, if they are pressed, have a greater impact. For me, these tend to be thick, frosty luster and deep, rich even coloration.

Luster is the reflection of light from the surface of a coin. When a coin is worn, dipped, cleaned or processed, the luster is impaired and the eye appeal is impacted. As I look through coins at shows and at auction, few have nice original luster and, as a result, when a coin with "booming" original mint frost is available, it tends to look great.

But part of a weakness for luster is also knowing the series which you collect. As an example, 1847-C quarter eagles are sometimes seen with thick, frosty luster and higher grade pieces can have really good eye appeal as a result. An issue such as an 1848-C quarter eagle is not known for good luster and I can't recall having seen more than two or three coins which had a "wow" factor as a result of good luster.

I can love a coin if it isn't sharply struck or if it shows an average number of non-detracting bagmarks but I have a hard time with coins that have bland, washed-out color. To me a coin with no definable color has no character and this sort of "blah" appearance is hard for me to embrace.

As with what I mentioned above for luster, the same is true with color: as you learn your area of specialization, you learn what color(s) a coin should show. As an example, the proper color for an early date Dahlonega half eagle is much different than that for a date from the mid-1850's. But when coins have been processed, they tend to look alike; meaning an 1841-D half eagle will look virtually the same as an 1858-D. And this is why that when I see an 1841-D with the "right" shade of green-gold color, I get excited and it gives me the wow factor.

3.  Great Pedigrees.  I'll come right out and admit it: I'm a sucker for a great pedigree. A few weeks ago, I started to read the auction descriptions for the Eric P. Newman coins which are going to be sold in a few weeks by Heritage at the 2013 CSNS auction. The coins were impressive, the grades were impressive. What excited me most about this deal, though, was the pedigrees which many of the coins have. As an example, the star in this first group of Newman coins is an 1852 Humbert $10 graded MS68 by NGC. Not only has Mr. Newman owned this coin since the 1920's, it came from the famous Zabreskie sale of 1907 and, even more impressively, has a direct pedigree that goes back to Augustus Humbert's estate. In other words, this coin belonged to the man who struck it. How cool is that?

Not every pedigree means that much to me. There are a few which have personal significance and I will stretch to buy nice coins from these collections even if they are a bit "out of the box" for me.  Amongst sales from my lifetime,  the ones which impact me the most are Bass, Eliasberg, Milas, Norweb, James Stack, Duke's Creek, Green Pond and Dingler.  Just about any coin from a Chapman Brothers sale (with a verifiable pedigree) would have a high wow factor for me as would coins from "name" collections sold prior to 1945.

4.  Great Historical Significance.  As a child, my interest in coins was predicated on my love of history. As an adult, this has, if anything, intensified. A coin with Wild West association is of interest to me and that's why a nice CC double eagle from the 1870's has more of a wow factor for me than a nice CC double eagle from the 1890's. Others historic eras which send a shiver down my numismatic spine? Certainly the Civil War and, a bit less so, World War 1. I'd also give high wow marks to San Francisco gold coins from the 1850's and antebellum New Orleans issues from the 1840's.

Numismatic significance goes hand-in-hand with historic significance. Sure, I'm a coin weenie but I will admit that factors like a coin being a first-year-of-issue or a one-year type excite me.

Another dimension which can increase the wow factor of a coin for me is its age. An eagle dated 1799 just seems Older" (and therefore cooler) than one dated 1800 or 1801 and this tends to get my attention when I'm looking at coins. I think this is the case with most collectors. A nice coin dated in the 1790's has more appeal than just about any other American issue, regardless of denomination.

5.  Great Backstory.  I'm a sucker for a coin with a great backstory. Let me give you an example.

Perhaps you've seen the small red presentation boxes which people used to give gold coins in as Christmas gifts. They were typically for gold dollars and quarter eagles and they were reasonably common from the 1880's until the 1920's. On a few occasions, I've had people email photos of otherwise-common Liberty Head or Indian Head quarter eagles which are housed in these boxes. Sometimes, the boxes are inscribed and sometimes they come with letters which feature ornate notes from a grandmother to her grandson/granddaughter. I like the sentimental value that these have and because of the backstory, I will always buy them and sell the peripherals alongside the coins to add to the wow factor.

A few months ago, Heritage sold a Gem gold dollar from the 1880's (I think it was either an 1885 or an 1887) which came in a lovely little presentation box with a beautiful, ornate inscription inside of it. I didn't buy it but the dealer who did (hint, he's tall, from Oklahoma and his last name rhymes with Barter...) is someone who is as easily swayed by a coin's backstory as I am.

What is it about a coin that gives you the "wow" factor? I'd love for you to share this with me and invite you to add a comment to this blog. Are you interested in acquiring coins for you collecting which have a strong wow factor? if so, please contact me via email at dwn@ont.com.

Are Early Gold Coins Overpriced?

A good client of mine recently asked me the question “are early gold coins overpriced?” As with most intelligent questions, I don’t think that this one has a pat answer. My feeling is that some early gold coins are poor value at current levels while others are good to very good values. Read on for my take on the current early gold market and my suggestions of where the best values are. Appearance and eye appeal are, obviously, critical factors in determining the desirability of any coin. In the area of early gold, I think these factors are especially important. The reasons are fairly obvious: these are hand-made coins that vary in quality literally from year to year, many survivors have been cleaned, abused or damaged and the third-party services tend to be inconsistent (to say the least) when it comes to grading early gold.

A fairly general statement that I think can be made about the early gold market is that only a small handful of the coins that exist have good eye appeal and a pleasing overall appearance. I personally feel that virtually every early gold coin that is choice and original remains a good value while most every good early gold coin that is low end for the grade and unoriginal is poor value. But this observation is fairly simplistic and needs to be expanded.

As with most markets, early gold issues can generally be divided into three categories: common or “generic” dates, better dates and rarities. And in the case of early gold we might even be able to create a fourth category: the “super-rarity.” How are each of these categories doing?

Even if you know very little about early gold, you might guess that the area most prone to showing weakness in a downward market turn would be the common dates. An example of what I would term a “generic” early gold coin would be an 1806 Round 6 Half Eagle. There are as many as 1,000 examples known of this issue and it is fairly readily available in grades up to and including MS63 to MS64.

If you go to a major national coin show you are likely to see a decent number of 1806 Round 6 half eagles. These would generally be available in the AU55 to MS62 grade range. (Lower grade 1806 Round 6 half eagles are difficult to find because the nice, affordable examples tend to be closely held by collectors; the very high end MS63 to MS64 tend to either show up at auction or they are placed in tightly-held, high end collections and do not trade with frequency). The examples available for sale tend to be low end and unattractive. At current price levels, I think they are not especially good values. Why is this?

As recently as five to six years ago you could buy a nice, fresh AU 1806 Round 6 half eagle for $5,500-6,000. At this affordable level, this coin was a good value, despite the fact that it wasn’t really “rare” in the sense of most early gold. Today, a similarly graded coin will cost you at least twice this amount. The problem is that these coins now tend to not be nice for the grade and the new price range of $11,000-13,000 no longer qualifies as “affordable.” Are coins such as this overpriced? If they are typical low to middle quality coins, the answer is a fairly resounding yes. If they are accurately graded and solid, choice pieces I would say that they are really overpriced but that they are relatively marginal values at these levels.

An example of an early gold coin that I regard as a “better date” would be a 1799 half eagle. This issue is not truly rare but it is available with far less frequency that an 1806 Round 6 half eagle. I think the market for an issue like this has held up rather well; even if a 1799 half eagle in, say AU55 is currently valued at least twice as highly as it was five or so years ago. Collectors still expect an AU55 example of this date to have good eye appeal and ugly examples are harder to sell than they might have been a year ago but I think this area of the market is solid. Are coins like this overpriced? I would say, pretty resoundingly, in fact, that they are not; especially in the solid collector grades of EF40 to AU55.

A “rare date” early gold coin would be, as an example, an 1826 half eagle. This popular Fat Head issue has a surviving population of maybe three dozen and it tends to be offered for sale at the rate of one or two coins per year. This is another issue that has seen significant price increases in the last five years but the fact is that the supply of 1826 half eagles in virtually all grades is nowhere near the (current) demand. Yes, coins like the 1826 half eagle are currently expensive. But given their unquestionable rarity I would have to say that coins like this remain fairly priced.

And what about our fourth and final category—the so-called “super-rarity?” An example of this would be an 1815 half eagle; an issue that is extremely rare in all grades and which typically appears for sale at the rate of approximately once per three to five years. My gut feeling is that these major rarities, in all the various early gold series, are still reasonably priced. There is an 1815 half eagle coming up for sale in the 2009 FUN auction (graded MS64 by NGC and pedigreed to the Garrett collection) that is almost certain to shatter all price records for this date and which could be one of the highlights of the 2009 Numismatic Year.

What about issues like the 1796 No Stars quarter eagle or the 1808 quarter eagles; coins that aren’t “rarities” in the classic sense of the word but which are exceptionally popular and numismatically significant? I think, in theory, that these are overpriced given their big-picture rarity. Given their strong level of demand I would still buy them for inventory. However (and this is a BIG however) I think the market has become far more selective on coins like this. If they are not CAC-quality, they have become hard to sell unless discounted in price. And this scenario is likely to continue as long as decent 1796 quarter eagles command prices in excess of $125,000-150,000+.