The State of the Liberty Head Double Eagle Market: 2011

The level of popularity for the Liberty Head double eagle series, struck between 1850 and 1907, shows no signs of abating. In fact, I think these are the most avidly collected United States gold coins by date. How has the market fared for $20 Libs. in the last three to five years and what does the future portend? Let's take a look at the State of the Market for Liberty Head double eagles. 1. The Impact of Bullion Prices on $20 Libs

At the end of May 2006, the price of gold stood at around $660 per ounce. Five years later, gold hovered near $1,530 and it had reached a high of over $1,600 earlier in the Spring. Obviously, this huge increase has had an impact on the market for twenty dollar gold pieces.

In May 2006, a generic Liberty Head double eagle in MS63 would have cost a collector around $900. Today, the same coin costs around $1800-1900. The first thing that is noticeable from this is that the value of a generic double eagle relative to its gold content has dropped appreciably. In fact, the spread between the spot price and the numismatic value is as low, in May 2011, as I can recall.

While generic prices have dropped, the demand for scarce and rare collector-oriented Liberty Head double eagles has increased considerably. Let's take a look at two examples.

In May 2006, an AU55 example of the popular 1850 double eagle would have cost a collector somewhere in the area of $3,000-3,500. Today, the same coin typically sells for $5,500-6,000. This is interesting as this is one of the few areas in the numismatic market where a rare coin (the 1850) has actually performed as well as the generic issue since 2006.

Let's also look at a common date Carson City issue. In May 2006, an AU58 example of an 1875-CC was likely to sell in the $2,500-2,750 range. Today, the same coin will bring $4,000-4,500. From an investment standpoint, the $20 Liberty Head market has performed well in the past five years. But this is not a blanket statement and certain areas have done better than others. We will explore these later in this article.

2. What's Popular in this Market in 2011?

As someone who buys and sells hundreds of Liberty Head double eagles each month, I have a good feel for what's popular and what's not. In my observation, I can see a strong level of demand in certain areas. These include nearly all Type One issues in the $2,000-5,000 range, most affordable Carson City double eagles, very scarce and rare dates in all three types, shipwreck coins (more on these later), and coins with exceptional eye appeal. If I had to name some of the specific dates that seem to be in particularly strong demand right now, I'd include the following: 1854-S, 1856, 1859, 1862, 1863, 1868, and 1880.

Areas in the market that seem weak include generics, grade rarities (an example of this would be a coin like an 1888-S in MS64 which is a fairly common date in grades up to and including MS63 but a "rare" and expensive one in grades above this), rarities that showed huge price increases in the middle of the last decade, and coins that have poor overall eye appeal.

3. The Market For Rare Date Liberty Head Double Eagles

The top end of the Liberty Head double eagle market showed incredible strength during the 2000's. Let's look at a few examples.

The 1866-S No Motto was an issue that was considered esoteric 10-15 years ago and I can remember literally begging clients of mine to buy nice EF and AU examples as they seemed incredibly undervalued to me at the time. This issue caught fire and prices soared. In the early part of the 2000's, an AU50 1866-S No Motto double eagle could be purchased for $8,000-10,000. By 2007-2008, the same date in this grade would have realized $40,000+ at auction; and probably would have been far less attractive, for the grade, as the example(s) available in 2000. Today, this same coin is worth in the low to mid-30's.

Possibly the most dramatic price swings in the $20 Lib. series have been for the major rarities like the 1854-O, 1856-O, 1861-S Paquet, and the 1870-CC. These coins became very expensive by the 2006-2008 boom years and, quite frankly, they became priced out of range of all but the wealthiest collectors and investors. These four issues have seen drops of 20-30% since their market highs, but I am noticing that they are starting to percolate once again and prices are raising. I think that buyers of these very rare issues are far more particular than they were five years ago and if a coin that is priced at $250,000 and up doesn't have good eye appeal it will prove to be a hard sell.

4. The Strength of the Market in Cool "One of a Kinds"

While the classic rarities in the Liberty Head double eagle series have taken a bit of a hit lately, the upper end of the market is far from weak. In fact, the market for really cool, really nice condition rarities is exceptionally strong and deep. Usually, coins of this sort wind-up at auction. I can think of a number of these; for the sake of brevity let's look at two.

In the recent Heritage Central States sale (April 2011) there was a gorgeous PCGS MS63 CAC 1869 double eagle. The coin had great color and surfaces and was fresh, choice and high end. Its a population four coin with two graded higher at PCGS and it was the second best I'd ever seen. Trends at the time was $28,500 and I expected this coin to bring in the low to mid-30's. It sold for $45,885. A great coin, yes, but a really robust price especially considering that Type Two double eagles are somewhat out-of-favor with collectors right now.

Another interesting "one of a kind" coin was the NGC MS65 1852-O that was sold as lot 5243 in the Heritage 2011 FUN sale in January. While I wasn't absolutely crazy about this coin from a quality standpoint (I graded it MS64 but didn't think it was a Gem) there was no denying it was a special coin for an O mint double eagle. And the fact that it remains the only New Orleans double eagle of any date meant that it was destined to bring a strong price. It sold for $276,000; not "crazy" money but still a heckuva lot for a common date New Orleans double eagle!

What's interesting to note right now is that any double eagle that is either finest known or well up in the Condition Census is destined to sell for a record price while some of the more classic rarities in the Liberty Head series might still be a bit soft.

5. Shipwreck Coins

No denomination of United States gold coinage has been more affected by shipwrecks/hoards than double eagles. The S.S. Brother Jonathan, S.S. Central America, and S.S. Republic hoards have added thousands of interesting Type One double eagles into the market.

For many years the supply of these coins far outstripped the demand. You couldn't wander through a coin show without tripping over a stack of 1857-S double eagles. (OK, a slight exaggeration but...)

As double eagles became more popular, the appeal of the shipwreck coins grew. There are now a number of retailers who actively sell these and the trend appears to be strongest for dates that have low "shipwreck populations."

Here's an example. Let's say you have an 1851 double eagle in AU58 from the S.S. Republic shipwreck. This coin could bring as much as $5,000 if it were put in an auction. The exact same coin without a shipwreck pedigree might bring $3,000 if it were extremely high end; $2,750 or so if it were just "average."

The shipwreck double eagles that seem to be in the greatest demand are the ones that appear infrequently. In other words, if you have a double eagle from the S.S. Central America that isn't a commonly seen issue (i.e., its not an 1857-S) then it is considered "scarce" by shipwreck collectors.

The entire shipwreck double eagle phenomenon is sort of a mixed blessing to me. I like the fact that these coins attract new collectors and I respect their history and pedigree. But I think many are cosmetically unappealing and I have a hard time justifying the premium that some of these coins are getting. Is a $3,000 double eagle worth $5,000 (or more) because its from a shipwreck? To me, no. But to a number of collectors the answer is clearly yes.

6. Tracking the Market by The 1856-O Specimen

Many collectors feel that the single most desirable Liberty Head double eagle is the unique Specimen-63 example of the 1856-O. The coin first surfaced in the late 1970's/early 1980's and it has bounced around quite a bit more than you'd think.

In Heritage 2002 FUN sale, the coin sold for $345,000. The owner held it for two years and then placed it in the Heritage June 2004 sale where it brought $542,800. It was purchased by an investor who, as I recall, had never purchased another Liberty Head double eagle before and he held it for five years, placing it in the Heritage May 2009 sale where it brought a record-smashing $1,437,500.

In just seven years, the price of this special coin has increased by nearly 5x. Given the fact that there are now numerous United States coins that have brought over $1 million at auction or via private treaty, I am not surprised at the value level of the 1856-O. I would have to think that if it appeared for sale again in the near future it would bring over $2 million.

7. Tracking the Middle Market

This article has been more focused on the upper end of the market than the lower and middle end and this is not representative of the $20 Lib market as there are a lot more transactions in the $2,500-5,000 range than in the rarefied air of six figure coins.

I make a strong two way market in Type One and Carson City double eagles in the $2,000-10,000 range and I find this area of the market to be quite strong. I have a few interesting observations to share.

I find the grading of these coins to generally be more consistent than on smaller denomination coins. That said, I still find inconsistencies. I love lustrous, unmarked "sliders" graded AU58, but see coins in 58 holders that range from terrific to terrible. In my experience, really nice AU58 coins with great eye appeal are now bringing at least 10-15% more than average quality coins and I think that this spread will increase in the future.

In the Type One series, there are certain dates that I literally couldn't keep in stock even if I had multiple examples. Collectors love the Civil War dates and the underrated Philadelphia issues from 1854 through 1859 have become very popular as well.

Carson City issues are collected both by date and as type coins. I find that the key issues like the 1878-CC, 1879-CC, 1885-CC, and 1891-CC are very popular in circulated grades and in Uncirculated as well. The more common dates (priced in the $2,500-5,000 range) are extremely easy for me to sell as long as they are attractive, lustrous coins with fewer-than-average bagmarks. Coins with CAC stickers are especially in demand amongst type collectors or collectors who, while not working on date sets, want to buy groups of four, five, or six different pieces to salt away.

8. In Conclusion: What does the Future Hold?

I think the future for collector-quality Liberty Head double eagles is as bright as for any other type of United States gold coin.

As gold continues to go up in value, more investors become aware of gold coins. For various reasons, more wind-up buying double eagles than any other type of numismatic "product" and due to good marketing, more of these will be steered toward Libs than towards Saints.

The beauty of the 20 Lib series is that, marketing aside, the coins themselves are very interesting. They were issued at a tumultuous time in US history and at significant mints such as Carson City, New Orleans, and San Francisco. And they come in a tremendous array of prices; you can buy $2,000 coins or you can buy $200,000 coins.

I think the more affordable $20 Libs have a really bright future; coins in the $2,000-5,000 range that are interesting, reasonably scarce and which contain nearly an ounce of gold are just about irresistible to collectors. The super high end coins will continue to shine as well; coins priced at $50,000 and up that are very rare or that represent the highest available quality for a specific issue.

The real question is what about the middle market? I could sell as many 1859-O double eagles as I could find in choice VF and EF grades and I'm sure I could sell the first, second, and third finest known(s) of this date. But what about the so-so quality AU50 and AU53 coins? How will those fare in the future? Check back in 2014 when I update this article and we'll see!