I am generally not a participant in the generic gold market as I tend to favor scarce and rare dates over more common ones. But I like Indian Head half eagles a lot and a recent experience made me ask the question: “is it time to buy Indian Head half eagles?”

I bought a nice, fresh deal of Indian Head half eagles about six weeks ago. All were in very old holders and I broke them out and sent them off to grading. My results were excellent and nearly every coin graded MS64 or MS65. As I got ready to cash in on my windfall, I did some price research and was shocked. Unless they stickered at CAC (more on this in a few moments) the levels I was going to have to sell them left me breathless…and not in a good way.

1908 Indian Head $5.00 PCGS MS65 CAC

1908 Indian Head $5.00 PCGS MS65 CAC

If you are like me and you don’t really follow the generic market on a day-by-day basis, it can be mystifying to see how cheap most issues have become in the last few years. My non-CAC MS64 Indian head half eagles were worth around $1700 per coin if they were in NGC holders and a bit more in PCGS holders. I was more shocked at how cheap MS65’s have become: around $9,000 for NGC coins and a smidge over $10,000 for PCGS coins. And that’s not to mention the fact that you basically have to twist buyer’s arms to get them to buy any quantity of these even at these cheap, cheap, cheap levels.

Why are Indian Head half eagles so inexpensive in MS64 and MS65? There are a number of answers.

1. Traditional Sellers of Generic Gold Now Sell Other Products

Firms like Blanchard, Swiss America, and Goldline used to sell lots of better quality generic gold coins; items such as MS64 or MS65 Indian Head half eagles. Today, they either sell few generics or if they do, they are focused on those coins with CAC approval. The supply of MS64 and MS65 Indian Head half eagles has stayed consistent as coins are continually found in Europe or upgraded from current holders. The demand has not kept up with the supply, however, and this has resulted in plummeting prices.

1911 $5.00 PCGS MS65 CAC

1911 $5.00 PCGS MS65 CAC

2. Owners of Generic Gold Don’t Want to Cost Average Their Positions

Let’s say you bought a few nice MS65 Indian Head half eagles for $15,000 each back around 2006-2007. You are clearly not a happy with today’s prices so much lower than when you purchased your coins. But why not by a few more and use cost-averaging to lower your overall price point(s)? This logic makes sense to me, but for most coin investors it is exactly what they do not want to do. They feel “burned” by Indian Head half eagles and probably want nothing more to do with them. This lack of continuity in the generic market, due to poor price performance, has clearly not helped this market.

3. The CAC Effect

One of the primary reasons why CAC was created was to identify those generic gold coins, particularly in series such as Indian Head half eagles, where the perception was that many coins in MS64 and MS65 holders were over-graded or not, at the very least, “solid” for the grade. CAC has proven to be very tough on Indian Head half eagles, and only a small percentage of the MS64 and MS65 coins sent in for approval have received a green sticker. As a result, stickered MS64 and MS65 Indian Head half eagles sell for very strong premiums; in most cases 25-50% over non-stickered coins. The market perception of non-stickered MS64 and MS65 Indian Head half eagles is they are not “good” coins and, as a result, the price gap between non-CAC and CAC stickered generic gold coins is widening. My gut feeling is that non-stickered MS65 Indian Head half eagles could ultimately be worth half as much as their CAC’d counterparts.

4. The Plus Grade Effect on MS64

It is a matter of opinion whether coins graded MS64+ are actually “better” than coins graded MS64, but the market perception is such that plus-graded coins have begun to sell for significant premiums, even in the generic market. If you are a new collector and you are offered a “regular” MS64 Indian Head half eagle for $1,750, or an MS64+ example for $2,250, the chances are good that you will spend the extra $500 and get the “better” coin. This has clearly hurt the market for MS64 Indian Head half eagles, and it is likely that we will see further price separation between MS64 and MS64+ coins.

5. Changing Tastes Amongst Gold Coin Buyers

More than anything else, the generic gold coin market has been hampered by a lack of demand. Past generations of new collectors and investors were introduced to numismatics by the assembling of the basic 11 or 13 coin U.S. gold coin type set. Today, new collectors are more inclined to collect something which is rare. For $10,000, an AU 1864 half eagle (slightly over 4,000 struck and under 75 known in all grades) is a more sensible purchase than an MS65 1909-D half eagle (nearly 3.5 million struck and over 100 graded in MS65 at PCGS alone) in the minds of these new collectors. It will take a large marketing promotion and lots of re-education to get new collectors to re-think this.

1912 $5.00 PCGS MS65 CAC

1912 $5.00 PCGS MS65 CAC

So what is my conclusion? Is it time to buy Indian Head half eagles in MS64 and MS65? I’d like to say yes, but I think that prices could easily drop another 20-30% on these coins in the next year or two. In my opinion, if levels get down to $1,500 for nice MS64’s and $7,500 for MS65’s, I would jump in the market, likely in a big way. For now, I’d avoid this coin unless you need one for a gold type set or if you are a contrarian with some tolerance for risk.

What’s your take on the Indian Head half eagle series and generic gold in general? I’d love to hear from you and encourage you to add your comment(s) in the section below.


Do you buy rare gold coins?

Do you have coins to sell?

Would you like to have the world’s leading expert help you assemble a set of coins?

Contact me, Doug Winter, directly at (214) 675-9897 or by email at dwn@ont.com.

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4 Responses to Is it Time to Buy Indian Head Half Eagles?

  1. C. Pierson says:

    Interesting commentary on these $5. coins. I would also offer that the listless market for gold these past 2 years doesn’t help encourage higher bids on the generics; another dealer recently complained that 64 $2.50′s are too cheap.

    Finally – the BL Pratt designs $2.50 and $5.00 are horrendous to grade. Normal coins with upset rims, luster, recessed fields and devices in relief seem easy to grade vs. the Pratt coins. I feel like I just have to take the grade on the holder in faith for these; your 1912 (in this article) looks nicer to me than the like-graded 1908 and 1911.
    Thanks for sharing your expertise with all of your readers!

  2. dtanner says:

    Doug,by your comment: “It will take a large marketing promotion and lots of re-education to get new collectors to re-think this” are you saying that you think the interest in overall rarety is wrong headed? I.e., do you think they should re-think this? I am somewhat new to collecting gold coins and I find coins with overall scarcity a lot more interesting than condition scarcity. But then, I feel the same way about other things I’ve collected (once a collector always a collector I suppose).

  3. Gerry S says:

    In common date $5 Indians the MS65 costs 10X as much as a MS63. Can people really see a big difference? Both are beautiful, uncirculated coins.

    Take a 1854D $5 Lib. The MS63 costs 10X the XF40. That is a difference most people can clearly see.

    Collectors of MS65 $5 Indians probably feel like they were had.

  4. Bill Jones says:

    I have been collecting gold type coins since the mid 1960s, and I can tell you that the $5 Indian is a very difficult coin to find in strict MS-64 and 65. When I was teenager, in the 1960s, I was never able to find one that pleased me completely. They always seemed to have a rub (flat dull spot) in the Indian’s cheekbone and most had, at best, light marks in the fields. This why the design was basically “a failure.”

    The thought was that the incuse letting and devices would last for many years of circulation was correct. I have seen pocket pieces in a low grade like VG that had incredible detail. BUT mint officials did not take into account that the fields were the highest part of the coin and were very susceptible to marks and abrasions. Hence the coin became unattractive, at least to the aesthetic eye very quickly.

    After years of searching I did find a PCGS graded MS-64 that I like very much. I bought it at a wholesale level from Heritage at a Baltimore show years ago. Now I’m “buried in it,” but I don’t care. I know how hard it is to find one of these coins that pleases me.

    As for CAC, all I can say is that it is a mixed bag. Like all grading services, they make mistakes. Anyone who has grading skills and has spent time going though auction house boxes can tell you that. You can’t bid or purchase coins blindly going on their approval alone. I learned that the hard way on an 1825 quarter eagle. Yet a large number of collectors do that. Hence we have the “CAC bid phenomenon.” Will it last? I don’t know. I only know that when the time comes to sell my collection, I might have to pay them to tell me something I already know.

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