Options
over-hyped gold coins?
steveben
Posts: 4,666 ✭✭✭✭✭
after a recent thread about "dreck" coins...it made me wonder what gold coins in particular do you think are over-hyped as being rare and/or desirable from a numismatic stand point?
0
Comments
choice/gem $5 Indians
1907 $20 High Reliefs
$3 gold pieces
$1 Type 2 gold pieces in unc
Other than the High Reliefs, all of these coins peaked in price back in 2006. So have been "rewarded" for being "over-hyped."
The $5 Indians in choice and gem grades aren't that much scarcer than $2-1/2 and $5 Libs. In general, gem small gold was over-hyped
for years and has suffered for a while now.
There just aren't that many people building gold type sets or date sets. The $20 high relief got rescued by the gold price going to $1500+.
People like big gold coins when the pog is up.
Many 19th Century issues had mintages less than 3,000.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
March of Time - 27 Centuries in Gold
https://coins.www.collectors-society.com/WCM/CoinCustomSetView.aspx?s=36590
<< <i>1911-D $2.50 - the PCGS population exceeds 3,100. >>
yes, this is one that i was thinking about. also, the 1855-P G$1...I see these listed as "rare" but they see to be readily available. any others?
<< <i>There are an awful lot of mid grade Saints out there, probably over 100,000 coins in 65, and tens of thousands in 66. The 65's have recently sold at auction for over $2,500, way too much for a coin with that population. >>
While those are large quantities compared to say MS65 Barber halves, there is also huge demand for a $20 Saint from collectors, dealers, and gold bugs alike. It's a gold bull market
after all. A $20 Saint in MS65 sells for a piddly 20-30% above it's spot metal price. How many 80 year old gem US coins can you name where you can buy them for 1.3X their
intrinsic metal value? Choice/gem Morgan dollars don't even come close to that ratio. BU wheat pennies don't either. If gold goes high enough I guess we could expect MS65 Saints
to sell for 0-5% above spot. We're not there yet. The MS65 Saints that sell for $2500 tend to be CAC quality specimens. Those often are close to the quality of generic MS66's.
Considering that CAC's stickering rate on MS65 saints is probably only 5-20%, those are certainly worth the extra few hundred dollars they receive. In the same vein, stickered MS66
saints are also quite scarce. Try to find quantities of them. MS65 Saints are now serving the basic role of "pretty and obsolete mint bullion." The extant supply for proof AGE's and
slabbed MS64 Saints are somewhat similar. I don't think anyone considers the proof AGE's to be currently overpriced as "pretty bullion." Even at 100,000 MS65's, it would only take
$200-$300 MILL dollars to wipe the entire high end generic Saint market clean off the map. That's not a whole lot of money when you consider they are close to bullion. And that
demand could come from bullion players as well as collectors. I'm not aware of any other pre-1933 one oz. sovereign Gem BU gold coins that exist in quantity and sell for near bullion.
The Saints are sort of a relic from an earlier time...same as the Morgan and Peace dollars are. Next time you pay 3c for a circ 1958 wheat cent or even more for red uncs, realize
that's a much stiffer premium to spot than the Gem common date Saints carry. Wheat cents exist in the billions. I wouldn't call MS65 Saints "over-hyped." If anything they are
under-hyped considering that today's MS65 quality would have fetched 2X to 4X bullion price back in the late 1980's. During the last MS Saint promotion in the fall of 2009 MS65
Saints reached $2500-$2600 or >2X spot. That was hype for the time. Today's 1.3X spot is far from hype or even overpriced. I'll take all the BU 1928 buffs, mercs, and SLQ's you got
for 1.3X spot.
I disagree somewhat with the statement that most post-Civil War gold coins are common. If you change the statement to read that most post-1891 gold coins are common, I would agree.
If I were asked to name some overrated pre-1933 US gold coins, I would mention the formerly rare branch mint Saints from the 1920's (1924-S, 1926-S, and similar), mid-grade 1874-1876 CC $20's, gem 1901-S $5's and $10's, Type II Philly gold dollars, and Wells Fargo hoard 1908 NM Saints, on an absolute basis.
Within various gold series, 1860-D $5's, Type III Charlotte gold dollars, 1860-O $10's, 1850 $20's, and 1851-O & 1852-O $20's seem to garner more interest and premium than their relative scarcity (or lack thereof) and demand should warrant.
I wrote a blog on this topic a couple years ago for Doug Winter's website. If I find it, I will post a link to this thread.
<< <i>1911-D $2.50 - the PCGS population exceeds 3,100.
Many 19th Century issues had mintages less than 3,000. >>
The supply is only half of the supply/demand equation. The 1911-D is the only key date of the only classic gold series that can be completed by most middle class collectors which is why this coin is extremely popular and in very high demand. Most 19th century rarities are a part of a series that are mostly collected as type coins so the demand for these coins are relatively low compared to their rarity.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>While these may be "scarcer" gold coins, there are enough of them to go around:
choice/gem $5 Indians
1907 $20 High Reliefs
$3 gold pieces
$1 Type 2 gold pieces in unc
Other than the High Reliefs, all of these coins peaked in price back in 2006. So have been "rewarded" for being "over-hyped."
The $5 Indians in choice and gem grades aren't that much scarcer than $2-1/2 and $5 Libs. In general, gem small gold was over-hyped
for years and has suffered for a while now.
There just aren't that many people building gold type sets or date sets. The $20 high relief got rescued by the gold price going to $1500+.
People like big gold coins when the pog is up. >>
Choice/gem $5 Indians - I disagree completely with the statement that the $5 Indian in Choice to Gem Unc. is not "that much scarcer then the $2.50 and $5 Liberties." I've looked for really nice $5 Indian gold pieces since the mid 1960s, and I can tell you that there are not a lot of them out there in MS-64 and better. Even the MS-63 coins, when they are properly graded, are not easy. There are a lot of "sliders" that end up in MS-63 holder IMO. The design with the fields as highest part of the coin, with no protective rims, was very prone to marks, which was one of the reasons why the incuse motif was not successful.
1907 High Relief - Yes it is perhaps the world's most common very expensive coin. But it is also a very desirable coin that many collectors would love to have. A large supply does not make a coin "over rated." Demand is by far the more important factor in the supply - demand equation that sets prices. Demand is huge for the 1907 High Relief $20, and that's why it is expensive.
$3 gold pieces - Yes the survival rates were high relative to the mintage (25% as opposed to 5% or less for other gold coins), but finding a properly graded piece in MS-63 or better can be a chore even if you have the thousands of dollars it takes to buy one. When I wanted to upgrade to an MS-64 for my type set, I saw many disappointing $3 gold coins in MS-64 and even 65 holders. The coins had too many marks and insufficient eye appeal to rate the grades and the prices (over $20,000 in MS-65).
Type II $1 gold - Yes somewhat over rated and over priced in Mint State although well struck coins with strong hair detail and full date are worth a premium.
``https://ebay.us/m/KxolR5
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Blog on overvalued US gold coins that I did with Doug Winter a few years ago >>
Nice read. You know me. I just come to the parade and hope to catch a little candy being tossed from the float. I get lots of it here in the form of "READING". Like Chico says in your blog, 'it's been berry berry good to me", too.
``https://ebay.us/m/KxolR5
<< <i>I suppose referring to 65 Saints as being overhyped or overvalued isn't exactly true. They are however available in mass quantity just about everywhere, rendering them over-represented and over-graded. >>
Being available in quantity or over-represented at times has nothing to do with "over-grading." The same overgrading exists even among classic gem 19th century type coins with
very limited populations. I would add that the standards for gem Saints and gem Bust halves probably slipped the most over the 1998-2008 period. But everything slipped some %.
PCGS MS65 seated dollars are probably the one area that saw the least amount of slippage.
The PCGS and NGC pops clearly show, without a doubt, that the $2-1/2 and $5 Indians in MS63 to MS64 are not that far from the $2-1/2 and $5 Libs. There can be little debate.
The $2-1/2 libs are the scarcer of all of these up to MS63 grade. In MS64 grade the $2-1/2 Libs and $5 Libs are only 20-35% more populous. In MS65 grade the $5 Indian is still
not 2X the pop of the $5 Lib, but is certainly much more than 2X the price. PCGS MS65 $5 Indians currently fetch around $10,000 or 4X the price of the $5 Libs.
The coins are quite plentiful. Sure, we can debate on what are personal standards are and what constitutes a properly graded MS $5 Indian or Saint. I would agree that I've never
owned a MS63/64 $5 Indian that I truly liked. All were too scuffy and showed some cheek/shoulder friction independent of strike/design. But the TPG's have made their standard and
that's what it is, regardless of what you or I think. I can probably look at 20 MS64's and not see one I would buy for a long term hold. Like anyone else, I would buy a generic coin at
the right price to speculate on for the short term. But the fact remains those 20 coins in holders define the market supply/price. It was pretty clear to me 2-3 years ago that
MS64 $5 Indians at $3400 just didn't make sense based on how many were graded. There were a similar quantity of MS64 $5 Libs graded (1.23X as many) but only selling for around
$1300. It made no sense. Consequently, the price of those $5 Indians has fallen to $2600. We can try to find a killer MS64 $5 Indian but the price of the generic coin will always
hold back the decent to solid ones to some extent. The "all there" 64's that I would like often end up in 65 holders long before I ever see them. I can pose the exact same issues
with gem capped bust halves. My standards require no high point cheek/curl/cap/clasp/wing tip/knuckle rub along with no obvious hits, a good strike, fully unbroken field luster, and
original but lustrous surfaces. Maybe 1 in 10-20 MS65's can meet that standard. Such a CBH probably already ended up in a 66 holder. Elcontador knows of what I speak.
If we go just by the data in front of us (ie pop reports) then there are too many MS63-65 $5 Indians...and CBH's as well. The irony of the over-hyped $20 Saints is that they've generally
outperformed the coin market over the past 10 yrs, especially the lower graded ones. Even the MS65's have generally doubled up. Such is the advantage of riding along on gold's
coat tails. Odd, that the most common and doggy of all gold coins (common $20's) have doubled in price the past 6 yrs while those gem $3/$5/$10 Indians got halved....even the all
there ones. There's a case where quality and rarity didn't pay off.
<< <i> I would agree that I've never owned a MS63/64 $5 Indian that I truly liked. >>
I like this one. I found it at the Heritage table at major show some years ago. It is an MS-64.
The incuse Indian gold is a tough coin since most look like AU's to the unexperienced even up to MS64 grade. But I think all there, no rub-full luster MS bust halves give them a good
run for the money. You can meet those conditions in MS66-68 grades. The hard part is finding them in 61-65 grade.