Proof-Only Gold Coins

The presence of a number of important Type Three Proof Liberty Head double eagles in the upcoming 2011 FUN auction got me to thinking about Proof-only United States gold coins. What are these coins, why are they important and do they deserve the market premiums they enjoy? A Proof-only coin is an issue that exists only in a Proof-only format where business strikes could have been produced as well. These coins exist in a variety of denominations but for this blog, we'll focus on the ones in various United States gold series.

Some of the most famous Proof-only gold coins are the double eagles from 1883, 1884 and 1887. The mintage figures for these dates are 92, 71 and 121 respectively. I believe that there are around twenty 1883 double eagles known, maybe fifteen 1884's and as many as thirty to thirty five 1887's.

There are two ways to look at these coins. The commonly accepted way is to consider them solely as a date. In other words, even though there are many Proof double eagles that are rarer than these three, there are no other Type Threes that compare to the 1883 and 1884 in terms of the total number known. If a date collector wants to buy an 1883 for his set of Type Three double eagle he has to buy a Proof. This is different than a rare date like the 1881 or the 1882 that exists in dual formats; i.e., as business strikes and Proofs, and thus presents the collector with two options.

Collectors who are new to double eagles might balk at having to pay $150,000-200,000 for a nice 1883 double eagle when they can purchase a Proof of comparable rarity from this era for half as much--or less. Why, they wonder, does a Proof-only issue get such a high premium?

The mistake that they are making is to compare the 1883 to, say, an 1880. They need to look at the rarity of the 1883 on an absolute level. The 1883, from the standpoint of total number known, is even rarer than such celebrated issues as the 1854-O and the 1856-O; two issues that now sell for $300,000-500,000. If the Type Three series were to ever become as popular with date collectors as the Type One series currently is, the current prices for Proof-only issues such as the 1883, 1884 and 1887 could double or triple.

One Proof-only issue that I have always found interesting is the 1863 quarter eagle. Only 30 were made and this is one of the major rarities in the entire quarter eagle series. In the Liberty Head design it is the third rarest issue, trailing only the 1854-S and the 1841. The 1863 is an issue that has alot going for it; most notably its charismatic Civil War issuance. It has been a heralded rarity for well over a century. Values have steadily risen for the 1863 over the last decade and I expect this issue to become more and more sought-after in the future.

Another Proof-only issue is the 1887 half eagle. It has a mintage of 87 and an estimated thirty or so survive. Unlike the 1863 quarter eagle, this is a date that doesn't "feel" like it should be a Proof-only coin; especially given the fact that many of the other Philadelphia half eagles of this era are common in business strike format.

What I think hurts the 1887 most in terms of its appeal is that Liberty Head half eagles are not currently a series that are actively collected by date. The 1887 feels like an overvalued date to me, given that a Gem is worth over $100,000 as compared to less than half this amount for comparable Proofs of this era that aren't Proof-only.

Two of the most interesting Proof-only issues are the 1875 and 1876 three dollars. Both are less rare than their original mintage figures of 20 and 45 would suggest and this is due to the fact that restrikes exist for both issues. I find the 1875 to be a very intruiging issue because of the magic of the date 1875 as a Proof. Every Proof 1875 issue has an exceptionally low original mintage and at least two denominations (the half eagle and eagle) are virtually unobtainable as business strikes.

Back to the Proof-only Type Three issues. When I first became ingterested in US gold coins, these three issues were heralded rarities and they were bringing $25,000 and higher back when 25 grand could buy you some serious rare Liberty Head double eagles. The 1883, 1884 and 1887 have certainly increased in value over the years but not at the pace of the rare Type Ones or, ironically, even at the pace of the formally-overlooked business strike rarities of the Type Three series.

It will be interesting to see how the next appearances of the rare Proof-only gold issues that I've mentioned are met by an increasingly rarfity-driven coin buying audience. My hunch is that we will see very strong prices on most of these coins and that they represent good value for the collector or investor who fancies true blue-chip numismatic items.

How to Become a Good Coin Collector

One of the oldest jokes in the book goes, "How do I get to Carnegie Hall? Practice, practice, practice." Hoary? Yes. Old when your grandpa was a kid? Sure. But oh so true and applicable to the subject of this blog which is, as you no doubt already know, "how to become a good numismatist." Because to become a good collector, you do need to practice. But what exactly do you need to practice most? I think the most important piece of advice I could give a new collector is to look at as many coins as possible. There are self-proclaimed numismatic experts who gain their knowledge from research but the truly savvy collectors that I have met have acquired their knowledge the same way that I have: they've looked at countless coins.

How do you get to look at coins? There are really only two ways that the average collector is going to be able to view significant numbers of important coins: at shows and at auctions. If you specialize in a specific sort of coin, make certain that you spend the limited amount of time you have at shows or at auctions looking at the coins you really need to be viewing; save the numismatic tourism for later.

One trick I suggest that collectors try at auction viewing is to cover the grade of the coin that they are looking at and guess what the grade actually is. Or, establish grade parameters and write if you think the coin is an "A" "B" or "C" quality example. After the sale is over and you analyze prices realized, you can get an idea of how accurate your precision grading really is.

I can't think of a better way to become a good collector than to buy, sell and trade coins. I'm not saying that you have to become a fledgling numismatic empire. But I think one of the best ways to become comfortable with any hobby is to be an active participant in both the buying and selling side.

One of the things that you learn from being a buyer and a seller is how to calculate your "upside/downside rate" with each purchase. It might be easy to justify paying $3,500 for a certain Dahlonega half eagle for your collection but what would it sell for if you placed it in the open market? $2,750? $3,000? $3,500? As they say, you can't play if you don't pay...

You've probably read a hundred times how important it is for a collector to learn how to grade. I haven't met that many collectors who know how to grade; at least outside of their realm of expertise. But the most successful collectors I've met all share at least one trait: they understand the aesthetics of numismatics. In other words, they may not be able to tell the difference between an MS62 and MS63 Charlotte quarter eagle but they know the difference between a below-average coin, an average coin and a high end coin.

The "aesthetics" of coins is probably the most important point I'm making in this blog. To be a good collector you really need to understand what constitutes a "good" coin in your series. If you collect St. Gaudens double eagles, the parameters will be much different than if you collect Type One double eagles.

And this is where having a good relationship with a dealer enters the picture. Behind every great collector there is a great dealer who acts as a conduit, providing information, guidance and coins. In this day of information overload it is tempting to think that the collector can go it alone and build a meaningful collection bidding in on-line auctions. If you are incredibly lucky, you'll only make an occasional mistake going the I-can-do-it-myself route. If you have average luck, you'll make a number of errors and some may prove costly.

One last thing: study and read all that you can about the coins that interest you and the market itself. It never ceases to amaze me when I hear stories about very successful businessmen who spend $1 million on generic gold and overpay by 40%. You would think they would spend thirty minutes on the web to compare prices and get a feel for the absolute basics of the market.

I've said this before and I'll say it again: the time that you put into numismatics will be doubly or triply rewarded as you wade further and further into the coin pool. This can be an infuriatingly complex hobby but there are ways to simplify it and this will only serve to give you more and more enjoyment.

Which Civil War Gold Coins Will Be Promoted in 2011?

I don't consider myself to be a real pro when it comes to rare coin promotion but even I know a no-brainer when I see it. 2011 marks the 150th anniversary of the beginning of the Civil War. As sure as the sun will rise tomorrow, you can bet that rare coin promotion gurus who are far more clever than I have been preparing for this event for some time. So if you are Joe Coin Promoter and you are gearing up for the Civil War Sesquicentennial in 2011, what kind of gold coins can you get enough of to do a promotion? Let's go denomination by denomination and figure this out.

I. Gold Dollars

Only two mints made gold dollars in 1861: Philadelphia and Dahlonega. The 1861-P is common and cheap; the 1861-D is rare and expensive. The 1861-D is unpromotable; it is too rare to accumulate in quantity and is already too expensive. A clever dealer could probably stealthily buy 40-50 1861-P gold dollars in lower Mint State grades over the course of a year and have enough coins to promote. He could probably find as many 1862-P gold dollars and maybe have as many as 100 coins in total. I would have to wonder, though, if the intended audience for this promotion would get excited about gold dollars as they are small, common and not really "sexy." As a collector I'd probably avoid stockpiling any Civil War gold dollars to ride the coattails of a promotion.

II. Quarter Eagles

Two mints made quarter eagles in 1861: Philadelphia and San Francisco. The 1861-S is unheralded but scarce and I doubt if you could put together a group of more than three or four over the course of a year. The 1861-P is common in grades up to MS63 and it might be possible to accumulate enough to promote. I like the promotional possibilities of this issue and it might not be a bad idea for a collector to buy a few MS62 to MS63 pieces and see if prices increase in the next few years. None of the other Civil War Philadelphia issues can be found in enough quanity to promote. The San Francisco issues are all rare but it might be possible to put together a rag-tag group of circulated examples.

III. Three Dollar Gold Pieces You couldn't promote threes in Uncircirculated as all of the Civil War issues are rare enough and expensive enough to preclude this. But you might actually be able to acculate a few dozen nice circulated pieces. This promotion actually makes sense to me as the three dollar denomination is odd and interesting and it would appeal to non-collectors. It is also out of favor right now so the possibility of buying a fair quantity exists. The 1861-64 dates are all moderately scarce but available in the EF-AU range for less than $4,000 per coin. As a promotion bandwagon jumper, these three dollar gold pieces kind of make sense to me.

IV. Half Eagles

The two southern branch mint half eagles (1861-C and 1861-D) would be fantastic issues to promote but they can not be found in quantity. The San Francisco half eagles of this era are also very rare and while not as glamorous as the 1861-C or 1861-D, issues like the 1862-S and 1864-S half eagle are highly unlikely to be used in a promotion. This leaves the Philadelphia coins. The 1861 is the only one that is common although I wonder if a promoter could find, say, fifty to one hundred examples. I imagine that if you were willing to sell cheap pieces, like in EF40 or EF45, it might just be possible. Not "easy," but maybe "possible."

V. Eagles

Civil War era ten dollar gold pieces were made only at the Philadelphia and San Francisco mints. All of the west coast issues are rare in any grade and the possibility of finding more than a few in any grade is unlikely. The Philadelphia issues are even rarer with the exception of the 1861 which can be found in some quantity in circulated grades. But I just don't think you could come up with enough coins to make for a good promotion. Which is actually kind of shame as a group of 1861 eagles in EF and AU grades would make a great Civil War-themed promotion.

VI. Double Eagles

There isn't a better denomination to promote these days than the double eagle. The coin are big and with gold at $1,400 or so per ounce, they interest nearly every investor. Unfortunately, there is just a single Civil War double eagle that might be available in a quantity great enough to promote: the 1861 Philadelphia. This is probably the most common non-shipwreck Type One double eagle and it exists in significant quantity in circulated grades. But....there may be a fly in the proverbial ointment. Type One double eagles are currently as popular as any series of American coin and an issue like the 1861-P, which used to be fairly easy to buy in quantity, is now in demand by legitimate collectors. It still might be possible but its not going to be an easy task.

After thinking about Civil War era gold coins to promote for the Civil War Sesquicentennial in 2011, I've pretty much come to the conclusion that unless someone has been working on this project for at least a year already, it probably can't be done in time. Given the scarcity of these coins and the costs involved, maybe it would make more sense to work on buying 500 circulated 1861 Indian Cents or 750 circulated 1864 and 1865 Two Cent pieces.

The Record-Setting Sale of an 1875 Half Eagle: What Does it Portend?

In the Bowers and Merena November 2010 Baltimore auction, a business strike 1875 half eagle sold without a lot of fanfare for a lot of money. I think this was one of the most significant individual sales in the rare gold coin market in 2010 and I'd like to spend a bit of time analyzing both the coin that was sold and the significance it portends for both the Liberty Head half eagle series and the rare gold market as a whole. The 1875 is the rarest collectible Liberty Head half eagle. (The 1854-S is rarer but with no pieces likely available to collectors in the near future, I regard this issue as "non-collectible.") Only 200 business strikes were produced and the number of pieces known has generally been estimated to be in the area of ten. I think this estimate is reasonably accurate although I think the actual number known could be as low as seven or eight.

The 1875 is unknown in Uncirculated and most of the examples that exist are in the EF40 to AU50 range. PCGS has graded five coins including an EF40 and two each in AU50 and AU53 while NGC has graded four: one in EF45 and three in AU55. I believe that these figures are inflated by resubmissions and the total number of distinct 1875 half eagles in slabs is four or five. There have been 10 auction appearances since 1991. Six have occurred since 2000 but this includes a number of reappearances of the same coin(s).

The coin in the Bowers and Merena auction was graded AU55 by NGC and it appeared to have been the same coin that was offered as DLRC's Richmond I: 1444 back in July 2004 where it brought a record-setting $86,250. There had been no other 1875 business strikes that had been available since the Goldberg 2/07: 2335 coin that brought $74,750.

The Bowers coin was part of an interesting set of 1875 gold coinage called the "Kupersmith Once in a Lifetime" collection. Terrible name but an interesting and impressive set with examples of the rare Philadelphia gold dollar, quarter eagle and three dollar gold piece from this year but, curiously without the very rare 1875 business strike (or Proof) eagle.

The coin in the Bowers sale brought $149,500 which is far and away a record price for a business strike of this date. Considering that this is an esoteric coin and, to be honest, it wasn't a really nice-looking piece, I think this price is very significant.

In the same sale, the coin right before the business strike was an 1875 half eagle graded PR66 Cameo by NGC. With a mintage of just 20, this has long been recognized as a great rarity and it is an issue that has usually brought more than its under-appreciated (but rarer) business strike counterpart. The Proof in the Bowers sale, sold as Lot 5042, brought $143,750. I was really surprised but really pleased to see this happen.

I've been thinking for a year or two that Liberty Head half eagles have a chance to be the "next big thing" in the world of rare date gold. Here's why. The Liberty Head double eagle series is extremely popular right now and there are not many "ground floor" opportunities for the new collector. Same goes for the eagle series although I still think there are some very undervalued issues. But the Liberty Head half eagle series remains under-collected and there are dozens and dozens of individual issues that are extremely undervalued.

So why is a $149,500 Liberty Head half eagle so an important? Because its the rarest collectible issue in the series and you typically see high-end collector activity in a series start with coins like this. In other words, you can buy the C and D mint issues any day but how often can you buy the Big Gun like the 1875?

If the coin had sold for, say, $80,000 or $90,000 I don't think it would have been a big deal. But with a sale at nearly $150,000 the bar has been raised and I think we'll see higher prices for other very rare non-Southern Liberty Head half eagles like the 1863, 1864, 1864-S and 1865.

Of course there is the very real possibility that this coin was not bought by a collector who plans to do a date set of Liberty Head half eagles and this totally blows a hole into my theory. It could have just as easily of been bought by someone doing a set of 1875 business strike gold coinage or someone who likes really rare coins like the 1875 half eagle and thinks that 150k is a great value for an issue with just eight or nine business strikes known. All true but, as I said above, the bar has now been raised for the rarities in this series and the days of being able to buy an 1875 half eagle in AU for less than $100,000 are gone.

Why Don't More People Collect 20th Century U.S. Gold Coins by Date?

Why don't more people collect 20th century gold coins by date? The four major designs (Indian Head quarter eagles, half eagles and eagles and St. Gaudens double eagles) are clearly among the most beautiful United States issues ever released. They are relatively short-lived and none of them are impossible to complete due to fabulously expensive or incredibly rare individual dates. So why, then, do these series lag such non-gold 20th century designs as the Lincoln Cent, Buffalo Nickel, Mercury Dime and Walking Liberty Half Dollar when it comes to numbers of active set collectors? I can think of a number of reasons. Some are pretty obvious while some are pretty far-fetched and I'm throwing them out there only to encourage debate. Here are some of the reasons I came up with:

1. 20th century U.S. gold is typically marketed as type coins and not by date. Traditionally, people have viewed coins like Indian Head half eagles as something you just need one of, not dozens. Simultaneously, higher grade 20th century gold coins are frequently sold more as "investments" than collectible coins. Over the last two decades, I have seen many collectors burst on the scene in a specific 20th century series only to flame out and sell their coins back a year or two later. The Steve Duckors and Austin Fursts of the 20th century gold world are alot rarer than their quick-in quick-out counterparts.

2. "They all look the same." A new collector once told me this when he decided not to continue with the Indian Head eagle set that I was helping him build. Now, I don't agree with this. If you become a student of, say, the Indian Head half eagle series it becomes clear that a 1911-D looks a lot different than a 1916-S. Its struck differently, has a different texture and has different coloration as well. But these subtleties are often lost on novice collectors.

3. There's too much difference in value for barely distinguishable quality. For many key date 20th century U.S. gold coins, the difference in price between an MS64 and an MS65 can be huge. As an example, an MS64 1913 Saint Gaudens double eagle is worth $7,500 or so while a no-question asked MS65 is worth over $50,000. It takes a real leap of faith for a new collector to pay a 7x premium for a difference in quality that he not only doesn't see but probably doesn't understand. The creation of CAC has made it a little less scary for a new collector to pay huge premiums for MS65's but from personal experience I know that the value for Gem coins just isn't always there.

4. There is no up-to-date reference work. David Akers wrote a terrific book on 20th century United States gold but it was published in 1988 and the information is out-of-date (not to mention that the book is out-of-print and fairly scarce). If Akers or a new expert were to take this book and update it with information that was relevant to the current coin market, this would be a huge shot in the arm for 20th century gold.

5. There is no sense of nostalgia inherent with these coins. People buy coins like 1909-S VDB Cents or 1916-D Dimes because they couldn't afford one when they were ten years old and filling holes in their blue Whitman folders. No one is haunted by the 1927-D Saint that they couldn't save enough money from their paper route to afford when they were a kid.

6. High grade 20th century gold coins are very expensive. It is a pretty serious financial commitment to collect Saints in Gem or Indian half eagles in MS64 and up. This obviously limits the number of people who can collect these coins.

7. Affordable grade 20th century gold is ugly. OK, maybe not "ugly." But you'll have a hard time convincing me that an Indian Head gold coin in EF and AU grades is remotely attractive. This is not the case with Liberty Head gold coins which is really attractive with limited wear.

8. Pricing information for many 20th century gold coins is hard to come by. Yes, its easy to figure out what a common date Saint is worth in a PCGS MS64 holder. But its not so easy to determine what a 1913 is worth in an NGC MS65 holder versus a PCGS MS65 holder versus a PCGS MS65 holder with CAC approval. If someone published accurate pricing information on the 20th century series, I believe it would jump-start collector interest.

9. There are few "go to" retail dealers for better date 20th century gold. If you collect 19th century Liberty Head gold, there are some obvious candidates who to buy from (and I'd like to think that DWN is one of them). The person who, in my opinion, is the sharpest dealer for rare date 20th century gold is Kevin Lipton and Kevin is a wholesale dealer who probably is going to be hard for many collectors to deal with as he has no website.

As I mentioned in the beginning of this blog, 20th century gold coins deserve to have more date collectors than they currently do. These are attractive, interesting coins. They are within reasonably short-lived series and unless you attempt a Gem set, they are within the price range of many collectors. I'd be curious to know what your take is on why they are not as popular as Lincoln Cents or Mercury Dimes and invite you to send me an email at dwn@ont.com with your input.

What Gold Coins Do CAC Stickers Add the Most Value to?

After two+ years of being traded on the open market, I think few collectors and dealers would argue the statement that CAC stickering has added considerable value and liquidity to many types of United States gold coinage. But are we now able to determine with a decent degree of accuracy which coins are most affected by a CAC (or the absence of a sticker)? Let's take a look at some areas of the gold coin market and see how CAC is adding value. One of the areas that CAC has added the greatest amount of value is in the St. Gaudens double eagle market. The impact is seen two ways. The first is with common "generic" issues in MS65 and MS66. One of the main reasons why the premium for non-CAC certified MS65 Saints is so low when compared to MS64 coins is that most of the coins in MS65 holders are not significantly better than those graded MS64.

What CAC has done is to identify those coins graded MS65 that are nice quality and which are "real" 65's. Currently, non-CAC Saints in MS65 trade for around $2,300. Those with CAC stickers are worth at least 10-15% more. They are also quite liquid and can be sold even when dealers have extensive numbers of non-CAC coins in stock. Non-CAC MS66 Saints are currently worth around $2,750-2,850 per coin. The premium for MS66 Saints with CAC stickers is at least $750-1,000 per coin. Given the fact that the stickered MS66 coins I have seen are very nice (as compared with the non-stickered coins which range from inferior for the grade to decent) this premium makes sense.

Another area where CAC stickered coins are selling for a significant premium is in the better date Saint market. Let me pick a random issue: the 1927-S in MS64. This coin has a current bid of $70,000 in this grade and a bona-fide Gem is worth double this. The quality of 1927-S double eagles varies greatly and there are coins that are very low end and hard to sell for $55,000 and coins that are very high end and worth over bid. I can't recall having ever seen a 1927-S in MS64 with a CAC sticker but if I had a PCGS/CAC coin that I liked I'd quote $75,000+.

Early gold (i.e. gold coins struck from 1795 to 1834) is area that has shown itself to be influenced by CAC stickers. I don't like every single piece of CAC-stickered early gold that I see but I like at least 90% of the coins. Compare this to non-CAC early gold where probably 50-60% (or more) of the coins offered at auction or through dealer's websites are not, in my opinion, nice for the grade. I find this to be especially true with early gold in the MS63 and MS64 grades. As an example, an 1812 half eagle in MS64 with a CAC sticker is currently worth around $40,000. The same coin in the same grade that is not stickered and which is not a CAC-quality coin, in my opinion, might be hard to sell for $32,500. More and more collectors of coins like this are demanding that they be CAC stickered and the premium for the pieces that have the Green Bean is at least 10-15% and climbing.

Because so many Proof gold coins have been doctored over the years, CAC-stickered pieces are currently garnering high premiums. This is more so with Matte Proofs than Brilliant Proofs. I can't remember seeing more than a few Matte Proof gold coins in the last two years that weren't doctored to the point that they weren't even the right color. When the few remaining fresh pieces come onto the market, they realize strong prices. As an example, Stack's just sold at auction a lovely 1913 Matte Proof gold set. All four coins were CAC stickered and all four brought exceptional prices. I see similarly graded washed-out NGC Matte Proof gold from time to time and it brings Greysheet prices or lower; these superb, vibrant Gems brought numbers that were way over "sheet."

I've found CAC to be very particular when it comes to Brilliant Proof gold as well. Lower grade (PR63 and below) Proofs aren't really impacted by having or not having having CAC stickers unless they are a very rare early date issue. In this case, the premium seems to be around 10%. The real premium is for very high grade pieces. As an example, from time to time, a really remarkable PR68 or PR69 Liberty Head quarter eagle will become available. While these coins tend to be pretty amazing from a visual standpoint, very few are CAC approved. I believe that a PR68 or PR69 gold coin with a CAC would sell for a very significant premium; maybe 20-30%.

There is no doubt in my mind that CAC has greatly improved the value and liquidity of nice NGC coins. As someone who sells a good number of NGC coins, I've noticed that pieces that have CAC stickers are regarded as being just about as "good" to collectors as PCGS coins; unless the collector is working on a PCGS-only Registry Set and will not purchase any coins at all in NGC holders. In the collector marketplace, the current hierarchy for many series of US gold coins is as follows:

1. PCGS coins with CAC stickers 2. NGC coins with CAC stickers 3. PCGS coins without CAC stickers 4. NGC coins without CAC stickers

A major exception to this rule is rarity. If a coin is a very rare date (say an 1883-O eagle or an 1842-C Small Date half eagle), collectors are still concerned first and foremost with the coin itself and not the plastic.

Another exception is the popularity of the series and who the end users are. Certain series, like three dollar gold pieces, are just not popular enough right now that CAC stickers make all that much of a difference from a price standpoint. Other series, like Type Three Liberty Head double eagles and Indian Head quarter eagles, are sold mainly by marketers who do not "preach the gospel" of CAC and, therefore, the current market premium is not as great as in other series.

It has been interesting to view the market acceptance of CAC in the last two years. The market has gone from being initially cynical (and in some cases hostile) to being accepting to, in some cases, fully embracing CAC. This has been most clear in the premiums paid for CAC coins and I think we'll see these premiums continue and, in many cases, increase as demand grows in the coming years for the highest quality rare coins.

Is It Time to Buy an S.S. Central America Double Eagle?

For many years, it's been no secret that I haven't been a big fan of the 1857-S double eagles that trace their origin from the famous S.S. Central America shipwreck. I've written that price levels of these coins haven't made sense to me and I've have had problems with their appearance. More than a decade after they were first released onto the market, has my opinion changed? I believe that this is (finally) a sensible time to purchase an S.S.C.A double eagle. But there are some important parameters for the collector to follow when considering a purchase. Some of these are as follows:

1. Be Selective. There are over 5,000 1857-S double eagles from this shipwreck and they range in grade from Extremely Fine to Mint State-67. With this wide variety of grades, there are a tremendous number of coins to choose from. At any given major auction, there are typically three to five available and it isn't terribly hard to find them in specialist dealer's inventories. I have noticed a huge variation in quality for coins in the same grade. As an example, I've seen some in MS63 holders that I've loved and I've seen some in MS63 holders that I thought were horrible. Spend 10-20% more and buy a coin that is high end and attractive. In some instances, you will be able to buy nice, high end examples for little or no premium.

2. Find the Sweet Spot. In my opinion, the "right" grade range for one of these 1857-S double eagles is MS63 to MS64. There is not much of a premium for these two grades over AU and lower Mint State grades and when you buy a coin that grades MS63 to MS64 you are getting good value. In the current market, AU58 examples can bring as much as $3,500-4,000. An MS63 is worth around $7,000-8,000 while an MS64 is worth $8,000-9,000. It seems to me that an MS63 at around 2x the price of an AU58 is good value. And it also seems to me that an MS64 at around $1,000 more than an MS63 is good value as well.

3. Stick With Coins in Original Holders. It is important to focus on 1857-S double eagles that are in their original gold foil PCGS holders. And having the original box and other packaging is an added benefit. Avoid coins that are not in these holders and stay clear of NGC graded S.S. Central America double eagles. They may be nice coins but they have been cracked from their original holders and probably upgraded.

4. Avoid Coins That Have "Turned" in the Holder: All of the coins in this treasure were conserved after they salvaged. The conservation process has been well-documented and, in some cases, the work was outstanding. But there are other coins that have "turned" in the holder. These can be identified either by very hazy surfaces or unnatural splotchy golden color. Avoid these coins and look for pieces that are bright, lustrous and evenly toned. At this point in time, coins that haven't turned are probably not going to.

5. Disregard The Die Varieties. All 1857-S double eagles from the shipwreck are attributed to a distinct die variety. There are over 20 varieties known. Some are probably rare but it is even rarer to find a collector who cares. I'd suggest not paying a premium for these.

6. If You Are Buying a PL or DMPL Example, Carefully Study the Market. A very small number of 1857-S double eagles were designated as either Prooflike (PL) or Deep Mirror Prooflike (DMPL) by PCGS. These are some of the most visually arresting coins from the shipwreck. I have seen a few pieces in the last few years bring extremely high premiums. These are no doubt very scarce and very flashy coins but I question the premium that they are currently bringing. If you do decide to purchase such a coin, carefully check auction prices for comparable examples and make certain that the price you are paying is in line with the last auction trade.

Now that I've told you the coins to avoid, let me tell you my ideal S.S. Central America double eagle and let me tell you why my opinion about these coins has changed over time. My ideal 1857-S double eagle from this shipwreck would be a choice, high end PCGS MS64 in a gold foil holder with original papers and box. It would be very lustrous and bright with no haze or discoloration. I'd expect to pay $8,000 to $9,000 and I'd expect to be able to find a nice one within a month or two of beginning my search.

What made me change my mind about these coins? For years, I thought they were very overpriced. I don't remember the exact issue price but I do know that whenever I would buy the coins from original investors, they would have to sell them at a loss; often a considerable one. I didn't like it that there was no real secondary market for these coins and that many of the investors who bought them had been told that they would appreciate in value.

What changed about these coins, at least for me, was the creation of a secondary market. A few of the larger firms that sell Liberty Head double eagles have done a great job of creating this market. For many new double eagle collectors, a bright, shiny high grade 1857-S is a great starter coin and this has created a new level of demand that hasn't exited since the coins were being sold (and heavily hyped) over a decade ago.

Another thing that changed my mind about the S.S. Central America coins is their comparative value with other Type One double eagles in higher grades. As an example, compare an MS64 1857-S to an 1861 in this grade. Prior to the discovery of this hoard, the 1861 was the "generic" date of this type and it was certainly the only coin that was seen, from time to time, in MS64. In 2001, an MS64 1857-S in a PCGS gold foil label was a consistent seller at auction for $6,900. At that same point in time, an 1861 would sell for $10,000 to $12,000. Today, the same 1857-S is only worth $8,000 while an MS64 1861 would sell for $18,000-20,000+. Non-1857 S double eagles in high grades have become expensive and hard to locate. This has increased demand for the 1857-S double eagles and I wouldn't be surprised to see them reach $10,000 in the next year or so.

One last observation about my about-face. I've seen thousands of 1857-S double eagles from this shipwreck and I've got to admit, that they've grown on me. Ten years ago, when conservation was not so widespread, these coins appeared funky and I hated the way they looked. Today, with conservation more readily accepted (and way more widespread) they don't look so funky anymore. I love the quality of strike and blazing luster that many of them show and they are certainly an interesting contrast to the dirty, crusty often bagmarked AU Type One double eagles that are a staple of my day-to-day business. Do I love these coins? Not really. But I've become more accepting of the way they look and have always loved their back story. Today, if a collector asks me "should I buy an S.S. Central America double eagle my answer will typically be "yes, but with a few red flags." A few years ago, my answer would have been a quick and curt "no."

AU58 New Orleans Eagles: A Case Study

Take two 1842-O Liberty Head eagles in NGC AU58. One is worth $11,500 and gets multiple orders on my website within hours of being posted. The other sells in an auction for $6,325 and is a marginal value. Why is one coin worth nearly twice as much as the other despite the fact that they are the same date in the "same" grade? The coin(s) in question is, as I stated above, an 1842-O eagle in AU58. A little background information on this issue is appropriate to help better understand the issue at hand. A total of 27,400 examples were produced. This issue saw extensive use in commerce and it is essentially the first available eagle from this mint given the rarity of the 1841-O (only 2,500 were produced). When available, the 1842-O tends to be in VF and EF grades and it is scarce in the lower AU grades. It becomes rare in properly graded AU55 and it is very rare in AU58. This issue is an extreme rarity in Mint State with just two or three known. The second finest of these, graded MS61 by PCGS, just brought $74,750 in the August 2010 Stack's auction.

I bought the NGC AU58 example illustrated below at the recent Philadelphia coin show sponsored by Whitman and it was among my best purchases at the show. I paid a strong price for this coin but was happy to do so (and would do so again).

What makes this a special coin? I was really attracted to this coin by its originality. It has superb deep original coloration on the obverse and reverse which suggests that it has never been cleaned or dipped. Notice the depth of the color and how even it is on both sides. I also like how clean the surfaces are. This is an issue that is typically found with densely abraded surfaces and even the MS61 piece that I mentioned above had considerable marks on the surfaces. This example, however, was immaculate. The luster of this coin, while a bit subdued as a result of the intensity of the color, is undisturbed; a result of its not having been cleaned, dipped or processed. This coin has wonderful overall eye appeal and this sort of "look" is much appreciated by connoisseurs of U.S. gold coins.

Now take a look at what I consider to be a very average "commercial quality" NGC AU58 that was last sold as Heritage 4/10: 3705. This coin brought $6,325. If you were the successful bidder, you might want to cover your eyes and not read this paragraph but...I didn't like this coin. Why didn't I like it? A number of reasons. First, I think the coin was over-graded. I regard it to be little better than AU50 to AU53 and have a problem with it in a 58 holder. Secondly, the coin is almost entirely unoriginal. It has little natural luster and is brighter than I would like to see in a coin graded AU58. Finally, it is very scuffy for the date and grade. There are numerous marks in the fields and the luster is clearly broken on both the obverse and reverse. A detracting elliptical-shaped mark below star six might possibly be mint-made but, to me, it really hurts the overall eye appeal.

Here's an instance where a plus grade would help distinguish the coins a bit or, even better, a designation of "original surfaces" could be placed on the DWN AU58 which might allow potential buyers to know the coin is special.

The difference in values for this issue in this grade is not a one-time occurrence. Heritage 4/06: 3915, a remarkably clean AU58 example in a PCGS holder, brought $15,065. This is more than two and a half times the amount that Heritage 4/10: 3705 brought earlier this year.

The moral of the story is that a grade on a holder is important but coins still sell themselves based on excellent visual appeal.

A Numismatically Significant 1859-D Quarter Eagle

I recently bought and sold a seemingly innocuous 1859-D quarter eagle that had a great degree of numismatic significance. Before I explain why, let me give you a little background on the specific coin and on this issue in general. This 1859-D quarter eagle has been graded as Fine-15 by PCGS. It is the single lowest graded example of this date seen by either service. In looking back through my records, I have seen very few that grade below Extremely Fine and certainly can't recall a non-damaged Fine example.

The example I sold is problem-free and actually quite attractive despite its extensive wear. It shows nice natural coloration and the obverse is a full Very Fine from the standpoint of detail.

This is the final quarter eagle produced at the Dahlonega mint. But, for all intents and purposes, the death knell for this denomination at the Dahlonega mint had been spelled as early as 1854 when mintages figures declined precipitously from the 1840's. In 1856, only 874 were struck; making this the lowest mintage figure of any coin ever produced at this branch mint. In 1857-D, the mintage increased to 2,364 but no quarter eagles were made in 1858. 1859 saw a resumption of the denomination but only to the tune of 2,244 coins. None were struck in 1860 and when the mint closed in 1861, no further plans had been made to coin quarter eagles.

The 1857-D and 1859-D are interesting issues among the quarter eagles from this mint. The grade distribution is different for these issues than for nearly all other coins from Dahlonega. The coins from the 1840's and early 1850's have what I regard as a typical distribution of survivors: most are in the VF-EF range with AU coins being scarce to rare and Uncirculated coins being very rare to extremely rare.

But in 1857 and 1859, the distribution curve looks different. These two dates are almost never seen in grades below EF and are most often seen in About Uncirculated. Both are rare in Uncirculated but not as much so as their very low mintage figures would suggest. There are as many as ten Uncirculated 1859-D quarter eagles known as well as another four or five dozen in About Uncirculated. This doesn't seem like a lot of coins but when you consider that there are only 150 or so known from the original mintage, the fact that nearly half grade AU or better suggests that this issue didn't circulate as freely as the quarter eagles from the 1840's.

I had long believed that the 1859-D was an issue that saw very little circulation. The existence of the coin shown above is proof that at least a few examples did circulate. I don't believe that this Fine-15 example was a pocket piece as it shows all the hallmarks of extensive natural circulation. Ironically, it is more rare in this grade than it is in Uncirculated and, to my way of thinking, this is one of the neater Dahlonega quarter eagles to have come up for sale this year: a highly circulated example of a date that was hitherto believed to have never seen extensive circulation. Considering that this coin cost its new owner well under $2,000 I think it is an amazing piece of Southern gold history.