$20 Gold - Grading Question
Coppercolor
Posts: 1,475 ✭✭✭
I'm trying to learn to grade $20 gold, mainly because i"m interested in holding some gold as investment, but want a coin with numismatic value too. I'm hoping a few thoughts/questions might trigger the right guidance from the boards....
1) Trying to find the sweet spot grade, where I'm still holding mostly bullion but have some numismatic value protection. I am narrowing in on MS64, and mainly in the common dates. Am I off?
2) There are a lot of these pieces around for sale around in old PCGS holders, more than other series I collect. Does this hint at the fact that they were overgraded in the past? Or were a lot graded and what remains tends to be weaker for the grade? Very few sport a bean
3) I can't find a good reference for determining the grading focal points. I assume the knee is important, then eagle breast, fields, what? Not sure how to narrow this down but there is at least one series where I can nail the grade with about three quick checks
4) How much does a dip affect grade and what are the telltale signs of a dip?
Thanks gold bugs
Comments
In my opinion, I would separate bullion stacking from coin 'investment' collecting. However, it is your hobby and money..... That being said, IMO, MS65 may be better for your purposes. High grade gold transcends melt price. I do not see a trend of over graded gold in the past, at least not at the shows I used to attend. I suggest you buy one of the excellent gold reference books for grading issues... there are a couple of good ones. Gold itself does not oxidize (though the older coins can get copper spots), so surface tarnish is due more to the alloy. The greatest effect of a dip would be removing spots and leaving a 'shiny' spot or other indications of alloy oxide removal. More to be watched for, on higher grade MS coins, is putty. Learn about this deceptive practice and get a black light (cheap hand models are available.). Cheers, RickO
Your logic is sound. MS63 $20 Libs and MS64 $20 Saints are probably the best bang for the buck with leverage to the upside. Don't rule out MS64 Libs or MS65 Saints as they not much more money and would command a lot more leverage should/if gold ever rise significantly again. I would also consider 1 oz. Proof AGE's in mint packaging as they qualify for IRA's, are beautiful coins, and have displayed up to 2X melt in the past...currently at 5-7% over spot. And those you don't have grade...just ensure they are spot free without an obvious mark/scuff. For the simplest way to buy gold with potential leverage from future promotions....proof one ounce AGE's with mint papers is the way. Back in 2016 they were carrying nearly 20% premiums to spot.
Try to find fresh coins that show up at your local coin shops or shows. Coins that haven't been on the market for 12-15 years or more. You'd have a chance of finding some very original coins with CAC potential (+10 to +30% premiums for "free"). Avoid the dipped out stuff which is overly bright. Look for the original coppery toning on blasty original specimens. They will almost glow. Copper spots and stains lower the price from $25-$100 per coin depending on how bad...unless they have a CAC sticker. Nothing wrong with buying CAC'd specimens for an extra 0-5% premium when you run across them. Some sellers don't think of asking much of a premium for them. Do learn about puttied coins as Ricko suggested. Best defense against that are coins with superbly original surfaces....and ideally in older holders where the putty has turned and shows up easily (white stains, off color blotches on high points). Once you start looking at enough common Saints and Libs, you'll quickly figure out which ones are ok or even strong for the grade. Steer away from the lower end ones with too many marks, overly bright, and maybe too much stacking friction/rub on the high points (Lib's big cheek, on St. Gaudens Miss Lib's knee-breast and eagle's chest).
Shoot for different dates....like in building a set of commons even if never completed. Start with 1922-1928. Then maybe 1900-1907. It can be called a viable "collection" rather than an accumulation/hoard (an exception for collector coins out of the 1934 gold reserve act). Your downside in buying PCGS/NGC slabbed 63/64 gold is pretty much limited to the gold price. The spreads from the lower grades have been compressed to the point where it's all around 80-95% bullion now. They trade sight/unseen very easily via the major coin brokers (Heritage, Rarcoa, etc.). Saints in grades of 62-65 tend to be graded more by luster and marks than any technical rub/stacking friction. If a 64 has killer luster and eye appeal and few marks, a bit more high point stacking friction is nearly irrelevant. Shoot for the upper 15-25% of the grade range you seek....ignore the also rans. If you can grade MS Morgans decently, Saints and Libs aren't any harder other than they allow for a few more marks on choice gold.
Right now $20 are a great buy. Gold went up and prices dropped. Since you are "investing" in gold stick with MS-63 (or possibly MS-64) as the 63's sell for a little over bullion. Purchase only PCGS or NGC slabs, the older the holder the better as standards were very tight (compared to today) in the 1980's.
Sorry, No time to write about grading. The first points for wear are top of wing and breast on the rev. and breast and knee on the obv. Don't worry about that for MS-64 and lower slabs. If you wish to see what a coin with no rub looks like, examine some graded MS-66.
here something that might help you from the pcgs coin grading and counterfeit detection guide.
good luck!
With gold at this level, I think it's a great time to latch onto some generic saints.
But, don't take my advice. My timing sucks, in the market.
Maybe we are seeing a flight from gold because there is the hope for better ROI (return on investments) elsewhere. And gold loses its' luster: until China and Russia have it all.
Sorry, I went off track. I like the Mexican gold 50 peso....personally. And that new $25 U.S. palladium piece kicks me in the orbs, as it were .
Why do I love coins ? Someone help me.
So many avenues, so little money.
Why do I hate dipping ?
I can't explain. Who is a gold bug ?
Not me. I'm a coin geek
Just FYI, there is lots of messed with and overgraded slabbed gold out there, that's why fewer get beaned. There is very good advice above to help you steer clear of the junk.
Thank you all so far on your advice. There's a lot to go on already.
I'm a crack grader for franklins, washington quarters and lincolns, so I have no reason to believe I won't quickly learn these $20 gold coins too. But gold is so soft and the coins ... so big. Like with the other series I'm going to need to pay some substantial tuition it's just that tuition is higher in this series than any I've collected so far.
I cannot address anything but type one $20. Almost all au coins have been dipped as all but a few have the original skin on them. Some have been dipped many times and they have a washed out monotone that is very shiny.
The early $20 were struck at a time the mints did not have the technology to consistently strike ever coin well. I feel your position on the sweet spot is very good as from this grade up are increasingly rare.
I also a think a coin must have much more than a margin of melt value as a coin that tracts gold is common and a generic piece. not a coin that will appreciate and gold is stuck in a trading range. I remember in 1981 it hit $820/ oz and sold all the way down to $280 around 2001. It is a sure looser over the long haul. If I were bullish on gold I would but the exchange traded unit (GLD) I think as the bid and ask are very narrow and the security liquid.
Steveben showed you what I feel is the best way to grade gold but it is a very tricky endeavor. The book does not say much about bag marks or scratches, making it tough to grade an early Liberty double eagle. I have one that has been in a 55 holder and came back a 53 prior to my buying it, making it easier for me to buy. PCGS is not always consistent.
I have found the best way to get close on a grade is know the areas of the coin that are more critical and compare the coins that have gone through Heritage. Gold is difficult to grade and some of the older PCGS holders may hold a coin that may upgrade a notch. I would not speculate on a coin that you feel will upgrade. Once you seen the coins that have not been dipped you will know one very quickly when you see it. There is an 1856 O and 1855 o up for sale on Heritage, both of witch have been dipped several times and have a look that look you want to avoid at all cost. The 56 O is not at all dirty and lacks the honey gold color a coin that the non dipped coins have. Look at several of the 1904 $20 and you will see that I am referencing as these coins are very high pop and many ever dipped due to their cost.
There is no book that will tell you how one will grade, only the critical spots on the coin to be examined. Bottom line is early DEs are very tough and take lots of time just to get a good idea on what it will PCGS grade and the time IMO is very well spent. One last point - the reverse is almost always the stronger side of the coin but the obverse is the side that gets most of the attention unless the reverse has been cleaned and the obverse not. I have not seen this scenario yet but it no doubt exists.
Good luck with your DES and post all you learn as I always like to read what others have to say about this very difficult coin to grade. Perhaps a PCGS grader offer their comments about bag marks and how bad a dipping job a coin has to have before it is a body bag reject.
I think that's a very small part of the reason. JA is is very fussy on surfaces and marks for gold. The coin doesn't have to be messed with or even close to unappealing. His standards for $20's is something back in the 1990-1998 era. I don't see him doing that for any other series. I suspect the huge quantities of MS $20's in grades of 62-66 require a market size that CAC can comfortably make a market in. I think they do this by only stickering about 3-7% of all the MS65-67 Saints submitted. And that's still a lot of coins and dollar value for CAC to deal in. As the years mount up so will the stickered Saints. He could have chosen a similar standard for MS65 Morgans where only 5% of coins sticker. From the slabbed saints I've seen over the past 15 years, I'd say most have too many marks for the grade. You'll have to look at a lot of unstickered $20's to find a 64-66 coin with choice orig surfaces and minimal marks.
With common choice/gem $20's it's always about luster, orig surfaces, and eye appeal. Marks bring up the rear. If the luster and appeal aren't quite there, having fewer marks makes no difference to CAC....though it certainly does to the TPG's who will grade such coins 65-67. I was involved with a 115 coin submission of MS65 Saints to CAC back in 2008. They were all put away years earlier and probably the upper half or upper third of what was on the market during 2002-2007. Only 6 of the 115 coins stickered. That is the norm as told to me by several major gold wholesalers who submit $20's every month to CAC.
JA seems to be very hard on coins that have had a a harsh or several dippings and he should be. The branch mint material is very rare in many dates and often there will be few CAC coins and sometimes no PCGS unc coins slabbed. NGC will usually slab a few if submitted enough. I know of one large rare coin dealer that uses NGC on all its grading to get a few more points. I doubt they are the only one.
Finding one that has not been ruined by the coin doctors can be tough, especially if the known pop is below 100. That being said you will be surprised by some of the grades old gold coins get, even those that do not have good eye appeal. I pass on these and if you want to see a good example look at the $20 1861 O coins and the grade they receive. This particular coin is the weakest struck O mint and almost all very heavily abraded but several are graded 53 or 55. I suspect the south moved these coins so often and quickly that all got banged up during the process but nobody will ever know for sure.