Why Are Some Rare Coins Undervalued?

Why are some coins clearly undervalued? I could answer this question existentially and say “because some have to be.” But the answer to this question is worth a little more exploration. Here are some things to consider about the valuations of coins. First and foremost, many of the areas of the rare coin market are thinly traded. In some cases, published prices for coins are speculative due to no examples having ever traded or they represent older price levels that have not been updated in many years. There are times when I am trying to figure what to bid for a very special rare coin at auction and I’m not sure I can scientifically pinpoint the exact price level. This can even be the case with coins that aren’t all that special but which haven’t traded in a long enough period of time to make their current value baffling.

Coin values are predicated by a supply and demand ratio. I have used this scenario enough times that it is now a semi-cliché but consider the following. If there are ten examples known of a certain coin but only three people care, it has an oversupply and its value is probably not very high despite its rarity. But if the same coin has thirty avid collectors than it will probably have a strong level of value.

This supply vs. demand situation is why some truly rare coins remain undervalued. As an example, look at a coin like the 1867 quarter eagle. Only 3,200 were struck and the most recent PCGS population figures show that just twenty-four have been graded. Despite this fact, the current value in AU55 is a whopping $1,500 or so. Shouldn’t this be a $3,000 or even a $5,000 coin? In theory, yes it should. But practical experience dictates that the level of demand for 1867 quarter eagles, which is virtually non-existent, keeps the price low. Advocates of the 1867 quarter eagle will counter with the argument “well, if this were an Indian quarter eagle with a population of twenty-four in all grades, it would be worth 10x in AU55.” In theory, this argument has merit. My counter-argument would be that the Indian Quarter Eagle series is many times more popular with collectors and that this is essentially an apples to oranges comparison.

The coin market is clearly becoming more and more researched-based as time goes by but I think the entire pricing system we have is antiquated. Let’s get back to the point I made in the second paragraph, about the market having thinly traded areas. These infrequently traded series are often compounded by a lack of good pricing information. I am always impressed by collector-dominated series like early Large Cents or Bust half dollars that have databases of pricing information available to collectors. The rare gold coin market doesn’t have this (yet) and I think it would be a real shot in the arm if someone were able to produce a price guide that helped dealers and collectors accurately determine values.

What I’d like to see even more is for an appearance-specific price guide to exist for these coins. Collectors of early Large Cents classify coins by three categories: choice, average and “scudzy.” Let’s say collectors are offered a certain die variety of 1796 Large Cent. A choice coin may be worth $5,000, an average coin $3,500 and a very low-end coin might only be worth $2,000. I’m not certain that these variations would be as extreme for, say, an 1854-C quarter eagle in slabbed AU55 but I do personally think a nice coin for the grade is already worth considerably more than an ugly one.

Getting back to my original point: why are certain coins undervalued? As I stated earlier, the major reason for this is that they are just not that popular. Another reason--one that is harder to give an explanation to--is that in any long series, it is inevitable that a percentage of the coins are “sleepers.” I previously mentioned that the lack of accurate pricing information in the market means that it is always going to be inevitable that a number of coins fall through the cracks. The value of being a specialist is that you will learn what coins are the sleepers before they become more widely known.

The Great RYK/DWN Mashup: Robert Kanterman’s Twelve Undervalued Gold Coins Priced Below $5,000

At the end of my last blog I said that I’d like to hear from collectors about which coins they believe qualify as undervalued sub-$5,000 U.S. gold coins. Robert Kanterman responded with this thoughtful list and I thought I’d publish it along with my comments (which are in italics at the end of each of his paragraphs). Without further ado, take it away RYK... Doug Winter has challenged me to identify 12 gold coins that are under $5,000 that are relatively good values. As a hobbyist, I am not nearly as knowledgeable and up-to-date in pricing, availability, and recent transactions, as Doug is. Most of my information is from sources like Heritage's auction archives, Coin Values, and the PCGS price guide and population reports. Each of these resources has its inherent flaws and weaknesses, yet each represents a sizable block of information, as well. I will also add that as a collector, I am often willing to dip down in grade level to a point that is lower than Doug typically does. This allows me access to some rare coins that I might otherwise not be able to afford. I would also stress that my selections below all are for coins that are original and attractive for the grade. On this website, that goes without saying.

1. 1854-S Gold Dollar in MS-62

I am always attracted to better date coins that have a historic or numismatic significance. The 1854-S dollar is important as it is the first year of operation of the San Francisco Mint, and it is the only SF mint gold coin that can be purchased in MS for under $5,000, with an MS-62 running in the $3,000-4000 range. This is definitely an issue that flies under the radar screen.

DW Comment: Nice choice. I had actually considered this for my list. This is a historically significant issue with a high “neatness” factor. I think a properly MS62 at $3,500-4,000 is a wonderful value. Just as an aside, I think all of the SF gold dollars are exceedingly good values and I have written previous articles on them which detail each issue.

2. 1857-D, 1858-D, or 1859-D Gold Dollar in AU-50 to 55

The combined mintage of these three issues is about 12,000 coins--yes, I said combined--and they can be had in AU-50 for $4,000 or less and a little more for choice AU. These are all charming, scarce, and historic. Within four years of the earliest of the trio, the Dahlonega Mint was overrun by the Confederates, who struck the gold dollars for the last and most famous issue of the series--the 1861-D. Of the three, the 1858-D gold dollar typically comes with the best strike.

DW Comment: Having owned dozens and dozens of each of these three dates I tend to overlook them but I think RYK has raised a good point. All three are scarce in the true meaning of the word. If I were able to choose just one date out of the trio, I would pick the 1857-D as I think it is considerably scarcer than the 1858-D and 1859-D. A caveat: many of the AU50 examples I see in holders are poor quality, so be patient and wait for the right example to come along.

3. 1839-C and 1839-D Quarter Eagles in XF-40+

I do not see much value in the classic head series, in general, but compared to the rest, the branch mint issues from Charlotte and Dahlonega seem to still have some value. Neither is especially rare, but with MS graded coins pushing into the high five figures, a dirty, original mid-circulated grade coin for $5,000, give or take a few, in a very popular series, seems like a pretty fair deal.

DW Comment: Nice choice, RYK. Even though properly graded EF examples of these two dates have probably doubled in price in the last few years, they are still good overall value. I’m not certain I would call them “undervalued” but the important thing to remember is that coins like this are in great demand and many collectors can’t afford the higher grade pieces that seem so readily available. I would personally choose the 1839-D over the 1839-C if I had to buy just one.

4. 1881 Quarter Eagle in AU-55

I hope I do not get bounced for saying this here, but after 1865 or so and with the exception of the 1875, the Liberty coronet $2.50 series becomes a long, boring series with few coins of interest to all but the diehards of the series. 641. What's that number? That's the original mintage of the 1881 quarter eagle for circulation strikes. If I were going to own one late date coronet quarter eagle, this would be the one.

DW Comment: At first I was going to heartily disagree with this choice but the more I got to thinking about it, the more I realized that at $3,500-4,000 for an AU50, this date is pretty good value after all. I do disagree with RYK that the post-1865 quarter eagles are a “long, boring series...” but you don’t expect me to agree with everything he says, do you?

5. 1864 Three Dollar in AU-55 or 58

The Civil War dates in many series are becoming the focus of collectors, and this is no exception for the $3 gold series. The 1865 $3 gets all of the credit for being low mintage (1,140), low pop, and one of the handful or so better dates of the entire series. The 1864 $3, however, has a mintage of 2,630, with a survivorship of a little under twice that of the 1865 and a price tag less than half of the 1865. Additionally, there is no apparent premium when compared to the higher mintage and more common 1861 through 1863 $3's. By all metrics, it is the best value among Civil war date $3's.

DW Comment: This is a really good choice. I probably see three 1861, 1862 or 1863 three dollar gold pieces for every 1864 despite the fact that the latter gets very little price premium in circulated grades. You have to like the history of any gold coin dated 1864 and most Philadelphia coins from this year were extensively melted.

6. Bust Right (or Bust Left) Early Half Eagles in XF-40

This is a personal favorite and may not be right for all collectors, but there is recent auction data to back this selection up. When AU coins are regularly selling for nearly $10,000, a nice original, piece with a bit more circulation in the $5,000-6,000 range seems like a better buy.

DW Comment: I love this choice except for one problem. Finding a crusty, original EF bust right or bust left half eagle is going to be a real chore as most of the real EF45 coins are now in AU50 or AU53 holders. When I do see EF examples they tend to be net graded AU’s—in other words, they have the details of an AU50 but have been cleaned at one time. That said, I agree with RYK that a crusty, attractive EF45 at $6,000 makes more sense for most collectors than a marginal, bright AU55 at $10,000.

7. Dahlonega Half Eagle Varieties in XF or AU

There are a number of scarce, easily recognizable varieties of Dahlonega half eagles (1840-D Small D, 1843-D Small D, 1848-D D/D, etc.) which can be purchased for little and often no premium to the more common variety. The grading services and astute collectors are only starting to recognize them, but they are well-documented and described in Doug's book, “Gold Coins of the Dahlonega Mint.” Instead of buying the common example for the date in which 150 pieces are known, it makes sense to seek the one in which only 15 or so are known.

DW Comment: On this choice, I believe that RYK was “overthinking.” While I love the concept of buying a very rare die variety for little or no premium over a common one, the problem with these is that only a handful of collectors care. The 1840-D Small D half eagle is, as an example, a truly rare coin but I doubt if more than half a dozen collectors would pay a premium for it. My feeling is that the collector should learn these varieties and try to cherrypick them if possible but that there are just a small handful of Dahlonega half eagle varieties (most notably the 1848-D/D) that (currently) merit a premium.

8. Pedigreed Coins Better Date Gold Coins Under $5,000

I am a big fan of pedigreed coins, and I know that Doug is, as well. When I talk about pedigreed coins, I am generally speaking of the Big Three (Eliasberg, Garrett, and Norweb), but for rare date gold, there are others of significance, including Bass, Milas, Dallas Bank, to name a few. I am not talking about hoards like Wells Fargo, shipwreck coins (because they tend to be overpriced), or dubious pedigrees like Rainy Day. Often, the best way to buy pedigreed coins is to rediscover them yourself. Failing this, dealers like Doug Winter will often sell these with little or no price premium. I have found that while I enjoy owning them, selling them is usually painless as there seems to be quite a few collectors out there who also desire these. I make sure that I do not compromise my standards for quality for the grade and still seek good value.

DW Comment: I love this choice but would change the Big Three to the Big Four as I consider the Bass pedigree to be every bit as important as Eliasberg, Garrett or Norweb. RYK makes a great point when he suggests that the best way to find coins from these sales is to do some leg work. If you collect quarter eagles, make sure you own all of the major quarter eagle sales. If a coin has a distinguishing mark it may be reasonably easy to pedigree it.

9. 1870-CC Half Eagle Up To VF-20

Here is a coin that Doug Winter would not typically purchase for inventory, but I think is good value for the money. 1870 was the first year of the Carson City Mint and the 1870 gold issues are all the rarest in their respective series. The 1870-CC $5 is the most common of the three gold denominations and the only one that can be purchased in any form that resembles a coin for under $10,000. VF-25's have recently sold publicly for $6,000 or so, so it might require a drop in grade to F-15 or VF-20 to acquire this popular, historic, and legitimately scarce coin.

DW Comment: Actually RYK is wrong about me not typically buying a nice VF 1870-CC half eagle (or eagle or double eagle, for that matter...) for my inventory. I have actually owned three or four 1870-CC half eagles in lower grades and have always found them to be popular and readily liquid. On a rare, historically significant issue like the 1870-CC, I know I am willing to compromise my standards a bit. This would be a great addition to any collection.

10. 1838 Eagle in VF

Here's another coin that might be a bit lower in grade than what Doug might purchase for inventory, but when you consider that these coins actually did circulate (like the 1870-CC $5), it make sense to buy one that did circulate. This is a legitimately scarce, first year of issue, with a somewhat different design from the rest of the long series, and the first eagle struck for circulation in 35 years. A crusty, older holder example sold earlier this year in VF-25 for $4,000, which seems like a pretty good deal to me.

DW Comment: I wasn’t planning on including this issue in Part Two of my article but I like this choice. I am generally a big fan of first-year-of-issue coins, especially if they are genuinely scarce like the 1838 eagle. I would warn the potential buyer of this issue that Trends and CDN Bid tend to be unrealistically low in all grades and there are not many that can be bought in the sub-$5,000 range.

11. Any With Motto 1860's Eagles (except 1868-P) in XF-40 Through AU-50

The Liberty $10 series is chock full of scarce dates that fall below the radar screen of most collectors, even those who are active in rare date gold. From 1866 through 1869, there are multiple legitimately scarce dates that can be had in XF to low AU for under $5,000, but they do not come available very often. Omit the 1868 Philadelphia issue, as it is the most common of the group.

DW Comment: I couldn’t agree more with this choice although I might not necessarily single out the 1868 as the one “do not buy” coin from this era. These dates all have low mintages and low survival rates. They tend to be extremely expensive in AU and higher grades bit are surprisingly affordable in VF and EF.

12. 1850 Double Eagle in AU

I generally have difficulty finding good value in the $20 gold series (Liberty and Saints). I chose the 1850 $20 among the 1850's Philadelphia issues because it is the first year of issue, and it often comes nice. If you like the value in this one, you would probably like the some of the other 1850's Philadelphia $20's because they are even less expensive. Big pieces of 150+ year old gold are impressive now and will remain so for the foreseeable future.

DW Comment: I’m going to disagree with RYK on this one. At one time, I was a huge advocate of this date and I even included it in an article I wrote about “A Dozen Cool U.S. Coins” a number of years ago. But that was before prices shot up and population figures in AU soared. While this date has the cachet of being the first collectible double eagle, I think dates like the 1855, 1856, 1857 and 1858 in nice AU55 to AU58 are much better values than the 1850.

I’d like to give a shout-out to Robert Kanterman for his exceptional list of undervalued coins and I hope I haven’t embarrassed him to the point that he’ll never participate in the new interactive raregoldcoins.com blog again. So, who is next??

12 Great Values in the Rare Date Gold Market Priced Below $5,000 Part One: Gold Dollars Through Half Eagles

In this economy, everyone likes a good value. If you don’t have the discretionary funds for coins now that you had a year ago, every last dollar counts. This brings us to the question at hand. Are there good values in the rare gold market in the $5,000 and under price range? And if so, what are they? This article is focused on twelve of the better values that come to mind in the gold dollar through half eagle denominations. I think there are dozens of other pieces that could be added to this list. Part Two of this article, which will appear on my website in January 2009, will cover the eagle and double eagle denominations and will focus on another dozen undervalued issues in the $5,000 and under range.


1. 1865 Gold Dollar

For many years my favorite “sleeper” date in the Gold Dollar series was the 1863. After a long period of neglect, the 1863 has been discovered and it now sells for levels well in excess of current Trends. But there are other Civil War era gold dollars that remain in the budget of the typical collector. My personal favorite is the 1865 which has an original mintage figure of just 3,700 business strikes. Unlike the low mintage gold dollars from the 1880’s, the 1865 was not hoarded and it is unlikely that more than 100-125 are known. Interestingly, the 1865 is almost never seen in lower grades so the range that the collector with a moderate budget should be searching for is MS61 to MS62. In the Bowers and Merena 9/08 auction, an attractive PCGS MS62 1865 gold dollar brought a very reasonable $2,760 and I know of a small number of others in this grade that have sold privately in the $2,500-3,000 range.

To me, this coin is desirable on a number of levels. It is a Civil War issue which gives it historic significance and it is better produced than some of the other gold dollars of this date. It has a low original mintage as well as a modest survival rate. As of December 2008, PCGS has still recorded just forty-four in all grades.

2. 1884 Gold Dollar (MS 64 and above)

I have always thought that with some creative marketing, the gold dollars produced from 1876 through 1889 could be sold as a “short set” akin to the similarly-themed Walking Liberty half dollars of 1941-1947. In this fourteen coin run, the 1884 has always been an issue that I have found to be much undervalued. It is traditionally regarded to be a common date and it seldom gets any sort of premium over the readily available issues such as the 1881, 1883 and 1887-1889. However, it is considerably scarcer and Gems are actually quite rare. The most recent PCGS population figures show forty graded in MS64, twenty-five in MS65 and another thirty-four higher but I believe these figures are inflated by resubmissions.

At current price levels, I like most all gold dollars in MS64 and above but the 1884 seems really reasonable. The patient collector should be able to buy an MS64 in the $1,100-1,300 range and a very nice MS65 for $2,250-2,500.

3. Accurately Graded PR63 Gold Dollars

Most Proof gold is priced well beyond the collector of average means. Generally speaking, if you have a budget of $5,000 or so, you don’t get to play in this market. But there is one exception. Many of the Type Three gold dollars have CDN Bids in PR63 in the $3,900-4,700 range. These are coins that have mintage figures that are often below 100 and even the “common” Proofs struck from 1884 to 1889 have fewer than 100-150 survivors despite comparatively high original mintages in the 1,000-1,700 range.

There are a few caveats that must be thrown in before you run out and try to buy up all the PR63 Type Three gold dollars you can find at CDN Bid. The very low mintage dates from the 1860’s and 1870’s with Bids in the $4,000-5,000 range are basically impossible to find at these prices. It is more likely that the collector with $4,000-5,000 to spend will have to focus on a more available date from the 1883-1889 range. Still, these coins offer a lot of bang for your coin buying buck; especially if you can locate a PR63 with reasonably good overall eye appeal.

4. 1837 Classic Head Quarter Eagle

Classic Head quarter eagles have grown immensely in popularity in the last few years. And with good reason. They are a short-lived, completable set that includes a number of interesting branch mint issues and they form an interesting bridge between “old gold” and the more modern Liberty Head design that was employed all the way up to 1907. Among the Philadelphia issues, I have always had a soft spot for the 1839 but the rarity of this date has become fairly well-known. But the 1837 remains undervalued.

A quick perusal of the PCGS population figures will show that the 1837 is about three times as scarce as the 1834 and 1836 Script 8. If I were going to purchase a single Classic Head quarter eagle for type purposes, I would strongly consider an 1837 and pay the 25%+ premium that this date carries. I would personally be looking for an MS62 as a type coin and if I were specializing in the Classic Head series I’d probably look for a nice AU58.

5. 1842 Quarter Eagle

I wanted to avoid the “needle in the haystack” sort of coins that always drive me crazy when I read other articles of this sort. But I love this date and am still amazed that it is possible that the collector with a budget of less than $5,000 can purchase a very presentable example. In September 2008, I wrote an article about the ten rarest Liberty Head quarter eagles and the 1842 made it onto the list at #10. There isn’t another Top Ten date in this series that is as affordable as the 1842.

Only 2,823 examples were struck and I estimate that between four and five dozen are known. For the collector on a $5,000 or lower budget, I would suggest either an EF40 or an EF45. The former is currently valued at $3,500-4,000 while the latter is worth $5,000-6,000. The only example to sell in recent memory was Heritage 1/08: 3826 (graded EF45 by PCGS) that sold for $4,888; a remarkable value, in my opinion.

6. Uncirculated 1870 Quarter Eagle

There is probably no other 19th century gold series that offers as much value for the collector with a $5,000 or lower budget than Liberty Head quarter eagles. An especially fertile era in the quarter eagle series is the Reconstruction period of 1866-1874. Mintages during this era tend to be very low (in the case of Philadelphia issues, often less than 5,000) and survival rates for higher grade pieces tend to be even lower.

The 1870 is a vastly overlooked issue with an original mintage of just 4,520. There are an estimated 150-200 known but this date is generally seen in EF40 to AU50 and it becomes very scarce in the higher AU grades. In Uncirculated, the 1870 is genuinely rare with an estimated six or seven known. PCGS has only graded three in Uncirculated (MS61, MS62 and MS65). Despite the obvious rarity of this coin, I have sold two Uncirculated pieces in the last year (an NGC MS62 and a PCGS MS61) for less than $7,000 and even though this is a bit of a budget buster for the collector with $5,000 per coin to spend, I believe that this is an issue worth stretching on.

7. 1914 Quarter Eagle, MS63

When it comes to value, I’m not generally a big fan of the Indian Head quarter eagle series. However, I have always liked the 1914 as a date and I think that a solid, high end example in MS63 is a comparatively good value in this series. Here’s my logic. The key date of the series is the 1911-D. The current PCGS population of this date is 321 in MS63 with 331 graded higher. The 1914 has a population of 432 in MS63 with 320 higher. In my experience, the 1914 is not all that different in rarity from the 1911-D until you get up to the MS65 level. The big difference is price. The current CDN Bid for an MS63 1914 is $4,100 while the 1911-D is Bid at $17,500. When it comes to these two dates, I’m of the belief that the 1914 is undervalued and the 1911-D is overvalued. At current levels, I like the 1914 quite a bit.

Assuming that the Indian Head quarter eagle series stays popular with date collectors, there will be a decent level of demand for the 1914. It is, after all, the second scarcest date in the series and it does have recognition as a semi-key. In my experience it can be harder to find an MS63 1914 than a 1911-D (sometimes it seems that there are 1911-D quarter eagles around everywhere you look!).

8. 1884 Three Dollar Gold Piece

This is another date that I’ve touted for many years. It tends not to get the recognition that the 1881 or 1885 get because those two issues have mintages below 1,000 but the 1884 is comparable to the 1881 in terms of overall rarity and it is far rarer than the 1885 in all grades. There were exactly 1,000 business strike 1884 Three Dollar gold pieces produced and an estimated 150-200 are known, mostly in the lower to medium Uncirculated grades.

This is an issue that did not freely circulate and there are just a few dozen extant in circulated grades. Despite this fact, Trends is just $5,000 in AU55 and I have sold very presentable examples in this grade in the $4,000-4,500 range and AU58’s for $5,000-5,500.

9. 1838-C Half Eagle, Choice XF

I wasn’t going to include any Charlotte coins on this list because, quite honestly, I wasn’t sure how many sub-$5,000 pieces I truly consider to be good value. But the more I thought about it, the more I realized that the 1838-C is an issue that really has everything going for it. Numismatic significance? Check—it’s a first-year-of-issue and a one-year type. Collector demand? Certainly—every time I list one on my website, it sells within a few days. Scarcity? While I wouldn’t call this issue rare from the standpoint of total known, it is very hard to find a nice Extremely Fine with good eye appeal.

While prices have climbed quite a bit for nice EF 1838-C half eagles, I think this is another issue that merits a stretch by our hypothetical $5,000 per coin collector. A properly graded, attractive EF40 can still be had for $5,000 or so although such coins are becoming more and more difficult to find.

10. 1847-O Half Eagle, Choice XF

I’ve been raving about the value of this date for years and still the 1847-O half eagle doesn’t command the respect it deserves. Even though it is part of a relatively popular series (No Motto New Orleans half eagles) and it is clearly the key issue in this set, it is still priced at a fraction of the less rare key date branch mint issues from Charlotte and Dahlonega. As an example, let’s compare the 1847-O to the 1842-C Small Date and the 1842-D; the keys from the Charlotte and Dahlonega mints, respectively. The 1847-O has a PCGS population of thirty-two in all grades and a Trends value of $7,000 in EF40. The 1842-C Small Date has a PCGS population of thirty-eight in all grades and an EF40 Trends value of $25,000. The 1842-D Large Date has a PCGS population of sixty-nine in all grades and it Trends for $7,000 in EF40.

It is still possible to buy a nice EF40 example of this date in the $4,500-5,500 range and if the collector is willing to stretch a bit (a well-deserved stretch, in my opinion...) he may be able to find an EF45 for $6,000-7,000. Given the rarity, popularity and upside potential of such a coin, I would give it my strongest recommendation.

11. 1892-O Half Eagle

Here’s another date that I’ve been foaming at the mouth about for years. People have finally caught on to the fact that the 1892-O is a really scarce half eagle but I think it still ranks as one of the neater mintmarked coins of this denomination that you can purchase for less than $5,000. And for $3,000-4,000 you can still buy a really respectable example that is not far removed from Condition Census quality.

There were only 10,000 examples produced and I believe that there are fewer than 100 known; mostly in the AU50-AU55 grades. In Uncirculated, the 1892-O is rare with 15-20 known; mostly in the MS60 to MS61 grades. If you are offered an 1892-O half eagle it is likely to be heavily abraded and probably not really attractive but unless it has really horrible eye appeal, you want to buy this coin. Maybe even two...

12. 1910 Half Eagle, MS64

I’ll let you in on a little Indian Head half eagle secret: in MS64, the 1910 is much scarcer than many of the common issues in this series but unless this series is hot or being actively promoted, you can generally buy it for little or no premium over a date like a 1908, 1911 or 1912.

In truth, no properly graded MS64 Indian Head half eagle is “common.” And I really like the fact that there is a huge price jump to the next grade. With Gems currently bringing close to $20,000, you have to love a nice MS64 1910 half eagle at $4,500-5,000.

As I mentioned at the beginning of this article, there are literally dozens of great values in the rare date gold market. If you have a budget of around $5,000 per coin, there are some exceptional pieces that are available for purchase. In these trying economic times, good value is exceptionally important.

I’d love to hear from you regarding the gold coins in this price range that you feel are great values.

What Should I Collect?

Every few days I get asked the question “what should I collect?” I’d like to make some suggestions based on three different budget levels. A quick word on coin budgets before we delve into specifics. As a collector you should not overspend on coins. Buy within the parameters that make you comfortable. Spending $750 on a gold coin doesn’t make you any less of a collector than spending $75,000. I find that many collectors, as they grow more comfortable with their comprehension of the market, find it easier to shift from one budget level up to the next. As always, learn about what interests you as specialized knowledge in numismatics is invaluable. I. Low Budget ($1,000 per coin and below)

Gold coin collecting was not really designed for lower budget collectors. That said, there are plenty of interesting areas to collect in this price range. Here are three suggestions that I find interesting.

a) Common to Slightly Scarcer Date St. Gaudens Double Eagles in MS63 to MS64

This is a perfect area for the individual who is more of an investor than a collector and who would like to put together a nice “position” in the semi-numismatic market. There is something like 25 different dates of St. Gaudens double eagles available in grades up to and including MS64 for less than $1,000. None of these are rare and this is a collection that can be assembled reasonably quickly. This is also a collection that is perfect for the collector or investor who does not want to interact with coin dealers. I would have no problem telling a new collector that he would be perfectly safe buying these coins from a reputable Ebay seller or at auction. The only suggestions I would make is that all of the coins should be PCGS or NGC graded and either the Greysheet or recent auction price records should be consulted when deciding how much to spend on each coin.

b) Philadelphia Type Three Gold Dollars

With the exception of the 1863 and the rare 1875, nearly all of the 34 Type Three gold dollars produced at the Philadelphia mint can be obtained in Uncirculated grades for under $1,000. In the case of the common dates from the 1880’s, the collector can buy coins in grades as high in MS63 well within his allotted budget. The scarcer Civil War dates will probably have to be purchased in the AU55 to MS62 range and the 1873 Closed 3 will either require a stretching of the budget or a lower grade example. Some people will not be attracted to Gold Dollars because of their relatively small size. But I think this is an interesting series for a number of reasons. I like the design, the mintages are comparatively low and the level of production on most of the Philadelphia issues of this type is quite high. In my opinion, these coins seem like great value.

c) No Motto Philadelphia Gold

I recently wrote a blog about how I had “seen the light” regarding No Motto half eagles and eagles struck at the Philadelphia mint. There are numerous dates from the 1840’s and the 1850’s that are available to collectors with a budget of $1,000 or less per coin. In the half eagle series, virtually every date struck between 1843 and 1861 can be found in nice AU for under $1,000. Eagles from this era are rarer but there are still a number of dates that can be purchased in the EF45 to AU55 for less than $1,000. I haven’t mentioned the Philadelphia quarter eagles from this era but they are also extremely affordable.

Something that might make for an interesting challenge would be to select a specific date and to assemble a denomination set. As an example, a collector might decide to put together a set of 1855 Philadelphia coinage. There were a total of six denominations produced in this year and none of these are especially rare in circulated grades—or expensive.

I can, off the top of my head, think of a few other interesting areas in this price range. Examples include lower grade New Orleans quarter eagles, Indian Head quarter eagles (discounting the key 1911-D), lower grade Classic Head quarter eagles and half eagles and nearly all of the With Motto half eagles and eagles struck at the Philadelphia and San Francisco mints between 1880 and 1907.

II. Medium Budget ($1,000-5,000 per coin)

If you are able to afford coins in the medium budget range, your selection becomes considerable larger and more interesting. Here are some suggestions:

a) Charlotte and Dahlonega Quarter Eagles and Half Eagles with Original Color and Surfaces

This collection is a little more “conceptual” than the others listed in this section. It wouldn’t be a complete set and it might have three examples of, say, an 1846-D quarter eagle and none of another common date such as an 1843-D. It would focus on coins in the EF40 to AU55 grade range with most of the coins costing between $2,000 and $5,000.

As I have mentioned in many other articles, even the most common Charlotte and Dahlonega quarter eagles and half eagles are very scarce to rare with natural deep coloration and no signs of recent cleaning or processing. There may be 200-300 examples known of a certain issue but probably no more than 5-10% would be what I referred to as “original” in appearance. That’s what makes this set challenging and interesting.

To work on a set like this, the collector will need to learn what an original Charlotte or Dahlonega coin looks like; which may not be an easy feat, considering how few examples are available at auctions or coin shows these days.

b) Year Set of Liberty Head Eagles

Despite the fact that it contains many rarities, the long-lived Liberty Head eagle series has many affordable issues as well. It is possible to assemble a virtually complete year set of Liberty Head eagles if you have a budget of $1,000-5,000 per coin.

Here’s the catch: certain years in which this series was produced contain major rarities. As an example, the 1875 Philadelphia eagle is an incredibly rare coin with fewer than ten business strikes known. But the 1875-CC is more affordable and with some patience, a presentable VF can be obtained for $4,000-5,000. There are some years that are going to prove to be very hard for the Liberty Head eagle collector on a medium budget. These include the 1838 and the1863-1865. But if the collector is willing to accept a VF example of a few dates (or to stretch his budget for a few pieces) he should be able to put together a very nice set.

This is probably the most numismatic and most formidable project discussed in this price range. Given the fact that Liberty Head eagles were produced from 1838 to 1907 you are looking at a set with 70 coins; including a number which, in spite of relatively low catalog values, do not trade with regularity. I would expect that this project would take a number of years to complete and a commitment of at least $150,000-250,000+ to do it properly.

c) Scarce and Undervalued New Orleans Gold Coinage

The gist of this collecting strategy is to obtain a number of different undervalued New Orleans gold coins in the $1,000-5,000 range. It would not mean assembling any sort of complete set. I look at this strategy as something akin to an NFL team deciding to “draft the best available athlete,” even if they are already stocked at that player’s position.

My personal belief is that the best values in New Orleans gold coinage are in the half eagle and eagle denomination. If you have a budget in the $1,000-5,000 area, you are not going to be able to buy Finest Known or Condition Census coins but you will be able to obtain very presentable examples of some truly scarce and undervalued issues.

Some of the issues which fall under these parameters are as follows:

Half Eagles: 1843-O Small Letters, 1846-O, 1851-O, 1855-O, 1856-O, 1857-O and 1892-O.

Eagles: 1846-O, 1848-O, 1849-O, 1850-O, 1852-O, 1855-O, 1856-O, 1857-O, 1880-O, 1881-O, 1882-O, 1897-O and 1899-O.

There are certainly a number of other areas that collectors with a medium budget can explore. I would suggest New Orleans quarter eagles, Three Dollar gold pieces and Philadelphia Type One double eagles for starters and I can think of many more interesting possibilities.

III. High Budget ($5,000 and up per coin)

When a collector is able to afford $5,000 or more per coin, he has an almost unlimited number of potential collections. It is difficult to limit my list to three suggestions.

a) Bust Right Half Eagles, 1798-1807

This type actually dates back to 1795 but the first three (1795, 1796 and 1797) are expensive pieces that many collectors might not feel comfortable including in this set. The remaining nine issues (no half eagles were produced in 1801) are all relatively obtainable in grades ranging from Extremely Fine to MS62.

There are some variations that could make this set more challenging than just running out to a few big auctions and buying as many of these coins as possible. The first would be to use eye appeal and originality as a factor. In my experience, many of the early half eagles from this era have been cleaned or dipped and locating choice, original examples of many of the dates is extremely difficult. Secondly, this set could be expanded to include the different varieties listed in the Redbook. As an example, there is an 1804 half eagle with a Small 8 as well as the unusual Small 8 over Large 8 variety. The only year which this would really pinch the pocketbook would be for the 1798 where there are at least three major varieties known including the Large 8 14 Stars which is rare and fairly expensive.

b) Carson City Half Eagles or Eagles

I have always thought that Carson City half eagles and eagles are excellent sets for the collector with a higher coin budget. Both of these denominations were produced for just 19 years between 1870 and 1893. Neither denomination contains an impossibly rare or expensive issue or significant varieties which add to the complexity or cost of the core set.

Both denominations can be neatly categorized by the three decades in which they were produced. The issues from the 1870’s are generally seen well worn and even the more available dates are rare in properly graded AU and extremely rare in Uncirculated. The 1880’s issues are more readily available in circulated grades but tend to be very rare in Uncirculated. The 1890’s issues are, for the most part, fairly common in lower grades, sometimes available in the lower Uncirculated grades and rare to very rare in MS63 or better.

Nicely matched Carson City half eagle and eagle sets are very popular with collectors and I believe that these are two of the few sets that might actually be worth more as a well-matched unit than as an amalgamation of miscellaneous coins.

c) Bust Left Quarter Eagles, 1821-1834

This third and final suggestion is a personal favorite of mine. After a thirteen year hiatus, the quarter eagle denomination was resurrected in 1821, employing the John Reich Capped Head Left design. These coins were struck in 1821 and 1824-1827. In 1829, the design was modified and the diameter was reduced. The modified early quarter eagles were then struck from 1829-1834. In all, there are a total of eleven coins that form the complete series. Only one (the 1834) is very rare but even that issue is affordable when compared to the major rarities in the half eagle series of this era.

The 1821-1827 issues are generally seen in the AU50 to MS62 grade range while the 1829-1834 tend to be found in the AU55 to MS63 range. These coins did not see as much circulation as the quarter eagles produced prior to 1808 and many were melted.

For someone with a coin budget that can handle $15,000 or more per purchase, this is a great area to specialize in. The coins are rare but they are not so impossible that the set is essentially incompletable. They are also very good value when compared to the larger-sized early gold denominations.

There are innumerable other areas that collectors with a high budget can focus on. If you like large coins, focus on Type Two Liberty Head double eagles. If you prefer smaller coins, the Liberty Head quarter eagle series is very challenging but it contains a host of overlooked and undervalued issues.

"Cornering the Market" on Specific Gold Issues

Does it ever make sense to attempt to “corner the market” on a specific gold coin issue? I have seen a number of collectors and dealers do this over the years. Some of these attempts were spectacular successes while others failed miserably. Anyone who collects coins is probably a little eccentric in the first place. Deciding to focus on one or two specific dates and to hoard these isn’t necessarily more eccentric…just a bit, how should I say this, more “compulsive.”

Collectors decide to hoard a specific date for a number of reasons. A student of varieties like Harry Bass owned multiple examples of certain dates because each represented a specific variety or die state that he was researching. A speculator might find a date that he feels is undervalued, buy up all the pieces he is able and have price levels rise due to continually paying more at auction. An example of this was recently accomplished with 1843 quarter eagles in which a clever dealer accumulated a few dozen of these, made prices rise significantly and then sold into a stronger market. Other collectors just fall in love with a specific date, for whatever reason. I remember helping a collector assemble a hoard of 1888-O eagles in Uncirculated that grew to over 100 pieces before he passed away.

If I were going to hoard a specific issue, I would choose one that does not have an unlimited supply. The gentleman who decided to hoard 1888-O eagles eventually came to realize that he was going to have to buy hundreds of pieces to have an impact on the supply. His decision was made more difficult by the fact the fact that this wasn’t a hugely interesting issue.

I would also look to hoard an issue that was relatively cheap. The decision to hoard 1843 quarter eagles made sense because most of these were available in the $500-$2,500 range.

Most importantly, I would choose an issue that had numismatic significance. Back in my collecting days, I was attracted to 1822 Dimes. I thought this date was much undervalued given its rarity and price structure. It was a key date in a reasonably popular series; another important factor to consider. I eventually owned fifteen or so examples but my relatively small budget meant that most of these were in the Good to Fine grade range.

If I were going to focus on a specific issue today, I might look at something like the 1845-O quarter eagle, a coin with a very low mintage figure, a relatively high level of collector demand and its marketability as the key issue in the short, highly collectible New Orleans quarter eagle series. Or, I might focus on the 1841-O eagle, a date with a very small mintage figure and the numismatic significance of being the first Liberty Head eagle produced at the New Orleans mint.

You can also own a couple of examples of one of your favorite issues without being a hoarder in the classic sense of the word. If I owned a nice 1861-D gold dollar and I had the chance to buy another that was equally nice, I might consider salting it away. This coin could be used as an interesting piece of trade bait at some point in the future.

One final suggestion. If you are hoarding a specific issue (or issues) have an intelligent exit strategy. An investor who put together a very large position of circulated 1893-S dollars recently decided to sell them. The good news was that he ran prices up considerably and that, at least on paper, he made a lot of money. The bad news is that he basically decided to dump them all at once and there are now dozens and dozens of examples on the market. This will probably erode a good portion of his profits.

Are Three Dollar Gold Pieces Overpriced?

Few areas in the rare gold coin market have seen as much price appreciation in the past two years as Three Dollar gold pieces. I am asked on an almost daily basis “are Three Dollar gold pieces overpriced?” My answer is for the most part, no they are not. Let’s look at the series in a bit of detail and I’ll make a case for them being fairly priced and also point out the issues that I think are now fully priced.

First, let’s look at the bread and butter issues in the series: the common dates in the AU55 to AU58 range. For $1,750-2,500 you can still purchase a coin that is relatively scarce. While I am not especially excited about the common dates of this type in this grade range, I think that slightly better dates such as the 1857, 1859, 1860 and 1868 are good values. These were selling for $1,500 or so a few years ago and given the rise in gold prices in the past few years and the increased popularity of this series, I have absolutely no problem telling people to purchase these slightly better dates at what is just a tiny premium over common date price.

Are there still dates that are undervalued in this series? You bet there are. I think the San Francisco issues, with the exception of the 1856-S, are all very undervalued and attractive, properly graded pieces in EF40 and better are very sensibly priced. Want to know some other underpriced dates? The 1858 is a fantastic value at current levels and all of the Civil War dates in AU are exceedingly cheap relative to common date prices. And I continue to love the very low mintage dates from the 1880’s, most notably the 1881, 1883, 1884 and 1886.

Want to know another area in this series that is extremely underpriced? Proofs. Ironically, Coin World Trends for most dates in MS64 is now higher than for comparable Proofs. I hardly ever see PR63 and PR64 Three Dollar gold pieces and Proofs struck prior to 1885 are nearly impossible to find. If you can locate decent looking pieces in PR63 and PR64 grades at anything near published Trends and CDN Bid prices, I’d say you can laugh all the way to the bank.

What Three Dollar gold pieces are overvalued? There are a number of dates that I am struggling with buying for my inventory at current levels. I have sold some common dates in MS63 recently for close to $10,000 and this seems like a lot of money to me for these. If you have some extra 1854, 1874 or 1878 Three Dollar gold pieces in MS63 and you bought them a few years ago, take your profits.

The 1854-D and 1854-O issues, while both very popular and both numismatically significant as one-year types, have risen substantially in the past two years. Three years ago, I had a group of four 1854-D Three Dollar gold pieces in NGC AU58 and had troubling selling them at $35,000 per coin. Today, each one of these coins would sell for $60,000-70,000. The 1854-O in AU55 and AU58 also seems overvalued, especially considering how many of them are around and how overgraded most of these are.

Would I encourage a new collector to begin a set of Three Dollar gold pieces today? I would, but not with as much enthusiasm as I might have a year or two ago. I still believe that there are good values in this series but the new collector will have to be far more selective than in the recent past when nearly any Three Dollar gold piece he purchased would have been considered undervalued and desirable by me.