I hope I’m wrong but I think there is an excellent chance that we will see a major Recession in the US due to the impact of the Covid-19 virus on the economy. It may only last for the second and third quarters of 2020, but it is likely to be painful, and will no doubt have an effect on people’s numismatic spending.

I’ve been a full-time professional coin dealer since 1981 and I’ve been through numerous Recessions and down markets. My experience has proven that there is no such thing as a recession-proof coin. Even the best coins go down during bad markets, and these represent great buying opportunities for contrarians or for collectors who have the means to afford luxury purchases during times when even necessities seem like difficult spending decisions.

I have selected four areas in the rare date gold market which I think will show the least amount of downside during the coming months. With the exception of bullion, nothing is likely to not dip in price through the summer but these areas have enough collector strength to survive reasonably intact.

1. Selected Early Gold

If you called Early Gold (coins struck from 1795 to 1834) the ultimate Blue Chip area of numismatics, you’d get no argument from me. But this is a wide-ranging area and there are clearly issues which are likely to survive a Recession more intact than others.

To me, the most recession-proof early gold ticks all or most of the following boxes:

Graded by PCGS and approved by CAC
Priced at $20,000 or lower, with selected exceptions
Dated in the 1790s
Choice and original with pleasing natural color.

A few weeks ago, I offered a lovely NGC/CAC AU55 1799 half eagle with great color and surfaces as my Coin of the Week. It sold with multiple inquiries within an hour of appearing as a targeted email. Yet two weeks later, I emailed a pair of choice 1803/2 half eagles in NGC/CAC AU58 and PCGS/CAC AU55 and they didn’t register a single order. So, there’s no guarantee that any specific early gold issues are “no-brainers” in this market.

2. Choice Dahlonega Gold

I’d select coins from this mint as the most avidly collected branch mint issues. This is especially true if the coin checks a number of the following boxes:

Priced at $1,500-7,500
CAC approved or at the very least choice for the grade
Scarcer or slightly better date
Attractive color and choice surfaces

I can’t think of many D mint coins that will drop much in value during the coming Recession except for common, overgraded issues priced in excess of $10,000.

I’d also bet that nice, fresh examples of key date Dahlonega issues will do just fine this year; if you can find them. This includes dates such as 1855-D and 1861-D dollars, 1840-D, 1855-D, and 1856-D quarter eagles, 1854-D threes, and 1838-D, 1842-D Large Date, and 1861-D half eagles.

3. Interesting Low-Population Gold Priced at $7,500 and Below

This is a pretty broad category and it includes many of the coins which my firm typically buys and sells, Recession or not.

I’d define “interesting low population” as a coin which causes you to go “hmmm…that’s cool, haven’t seen one of those in a long time,” and one which makes you think “$5,000 is pretty fair for a coin this cool, let’s buy it!”

Being more numerically-specific, I’d suggest these parameters include Philadelphia and San Francisco issues with single figure populations at PCGS (i.e., 9 in EF45 with 9 in all grades finer), and Southern issues with low double digit populations.

Coins which meet these parameters are certainly not risk-free but I’d think that a scarce, interesting half eagle or eagle priced at $5,000 or lower has reasonably limited downside.

4. Really Scarce Coins

Let’s say you are a serious collector of No Motto New Orleans eagles. It’s likely that two of the holes in your set are the 1841-O and the 1859-O.

Now let’s say you see an 1841-O eagle on my website in nice PCGS EF45. You enlarge the images, read my description and your heart starts pounding. It’s more money than you want to spend in a Recession, but you’ve been looking for this coin for three+ years and you know a better one is likely to be too expensive and virtually non-existent. You might have to get creative and do a partial trade or take terms, but you’re going to buy that coin no matter what.

I can think of 50 or more coins which fall into this category. Coins which are demonstrably scarce, avidly collected, and almost never come up for sale.

But not every really scarce coin qualifies. Take a hypothetical coin like a Gem Proof 1878 half eagle. It’s amazingly rare, but unless a type collector or a specialist needs this issue and is feeling flush, it could easily sell for 20 or 30% under current market value.

I’d be curious to know what coins you feel are recession-proof or close to it. Please add your comments below and let’s start a dialogue! You can contact me by phone at (214) 675-9897 or by email at dwn@ont.com.

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