What's Up in the Carson City Gold Market?

It’s been far too long since I wrote about the Carson City gold market. Other than an analysis of CC double eagles which I wrote in October 2013, my last effort about this subject was a report on the Battle Born collection which I published in August 2012. In the 1980’s and the 1990’s I was probably the single foremost buyer of high-end, important gold rarities from the CC mint. I bought (and later sold) a number of amazing collections and handled finest known or Condition Census examples of virtually every date in the Carson City half eagle, eagle, and double eagle series. I even wrote a book or two on the subject.

My CC interest is still strong but a few factors have made my interest wane a bit in recent years. The market has become very pricey—especially for double eagles—and coins which I would happily write a check for $15,000 back in 1992 I have trouble with at $30,000 or $40,000 today. Most of the coins I see in the marketplace today are very low-end (not all but most) and when I see pieces in AU53 holders which are not only overgraded but which are processed, I have trouble playing at current numbers. Finally, to be honest, the market has become a little too competitive for me. I was spoiled in the 80’s and the 90’s back when I could be just about assured that I would get first shot at all the cool CC gold. That’s not the case today and like a spoiled little kid, sometimes I just pick up my ball and go play somewhere else.

A few recent transactions have re-kindled my CC flame and I find myself re-liking these coins more than I have since the sale of the Battle Born collection nearly three years ago. Let’s look at each denomination and see what’s happened with the Carson City gold market since 2013.

1. Half Eagles

The number of auction appearances and private treaty sales for many of the scarce and rare dates from the 1870’s has been surprisingly high since the Battle Born auction took place. As an example, there were six 1870-CC half eagles sold at auction in 2014 and I personally handled two other fresh pieces which were not from recent auction sales. Even more dramatically, the 1871-CC had no less than 18 auction appearances in 2014 alone with examples ranging from a low of AG3 (at $764) to a high of AU58 (at $32,313).

  1873-CC $5.00 PCGS VF35

1873-CC $5.00 PCGS VF35

A few things I have always believed about these 1870’s half eagles from Carson City holds even more true in 2015 than it has ever before. The first is that gradeflation has impacted the Carson City half eagle series possibly harder than any other subset of the rare date gold market. Coins that were market graded EF45 back in the 1980’s and 1990’s are clearly at least AU50 today and in many cases they grade AU53 or even AU55. The second is that totally original, choice examples of most of the 1870’s dates are at the very least very scarce and in most cases they are downright rare. The dates which remain hardest to locate with choice, original surfaces and a nice appearance are (in approximate order of rarity) 1873-CC, 1878-CC, 1870-CC, and 1876-CC. The third is that the market has become more sophisticated and many collectors will pay, let’s say, $25,000 for the right 1878-CC half eagle when the auction records for overgraded, processed coins in the same grade range from $15,000 to $20,000.

The CC half eagles from the 1880’s have never been as interesting to me as their counterparts from the 1870’s but this is clearly a well-developed sub-market. The Bentley Effect was great on these coins and a few issues such as the 1883-CC and 1884-CC were majorly impacted.

As an example, Heritage sold an ANACS AU58 example of the 1883-CC for $16,450 as Lot 30341 in their March 2014 auction. As a result of this transaction, the last two 83-CC half eagles in AU58 which I have priced at coin shows have been vastly overvalued and with the same quote: “Well, Heritage just sold a 58 for over $16 grand…” Sigh…

  1881-CC $5.00 NGC EF45

1881-CC $5.00 NGC EF45

In my experience, the 1881-CC remains the toughest later date CC half eagle to locate with good eye appeal and choice natural surfaces followed by the 1883-CC and the 1884-CC.

A few final thoughts. Are CC half eagles good value at current levels? Probably not; with the strong demand for virtually any gold coin from this mint there are few issues left which are truly undervalued. I’d liken nice quality examples of the scarcer 1870’s issues to blue chip stocks: they might not see strong price increases in the coming years but they are likely to hold their value (and more) even if the rare date gold market goes kerplooey.

Can a collector expect to find enough nice CC half eagles to work on a set? That’s a tough call. I’d say the answer is yes but the supply of PCGS/CAC quality rarities such as the 1870-CC, 1873-CC, and 1878-CC is extremely limited and is not likely to show much of an increase in the coming years. To collect CC half eagles, you need to have deep pockets, good connections with specialist dealers, and the ability to make quick decisions.

2. Eagles

The 1870-CC has always been the most interesting CC eagle in my opinion and there were no less than seven APR’s in 2014. This included a record for the date ($135,125 for an NGC AU55 which I didn’t care for in March of that year) and a really amazing $30,550 paid for a nice F12 in the same March 2014 auction. While prices have risen fairly dramatically for this issue in recent years, I still feel it is undervalued when compared to the 1870-CC double eagle.

  1870-CC $10.00 PCGS EF45

1870-CC $10.00 PCGS EF45

All of the 1870’s CC eagles are very scarce to rare in EF40 and above with choice surfaces and original color. If I had to rank them in order of scarcity, I would begin with the 1870-CC, then choose the 1879-CC followed by the 1877-CC, 1873-CC, 1878-CC, and 1875-CC.

The au courant date in the Carson City eagle series is the 1873-CC. Back in the day, this issue was regarded as undervalued and it was almost never seen above EF45. The recent APR of $58,750 for a PCGS AU53 sold in March 2014 (a coin which I didn’t especially like) was the second highest price ever paid for this date and it made me wonder what the gorgeous PCGS/CAC AU55 which I sold back in 2011 would be worth today.

The trendy dates for CC eagle collectors who were active in the 1980’s and 1990’s were the 1877-CC, 1878-CC, and 1879-CC.

  1877-CC $10.00 PCGS EF45 CAC

1877-CC $10.00 PCGS EF45 CAC

I first became aware of the rarity of the 1877-CC through the pioneering research of David Akers who noted, on a number of occasions, that this date was vastly underrated and much rarer than its status would indicate. Thirty years later, we know this to be 100% correct.

The 1878-CC and the 1879-CC are two very low mintage dates in the CC eagle series which were once regarded as keys in the series but which have been eclipsed by issues such as the 1870-CC (deservedly), 1873-CC and 1875-CC (not so deservedly).

Since the Battle Born sale, the only comparably high grade 1878-CC eagle to cross the block was an NGC AU55 (yet again, a coin which didn’t appeal to me) which sold for $28,200 in Heritage’s March 2014 auction. A nice AU55 (and there are a few very pleasing pieces) would likely bring in the $35,000-45,000 range today.

Only one 1879-CC eagle sold at auction in 2013. Five different examples sold in 2014 which seems like a lot until you examine the specific coins which were available. I didn’t care for any of these although a PCGS EF45 which was sold by Stacks Bowers in early 2015 for a strong $30,550 was very pleasing, in my opinion.

The 1880’s dates are much less challenging for the CC eagle specialist. In my experience, the only really tough date is the 1883-CC as this is an issue which tends to be found either poorly struck or processed and almost never with choice surfaces and natural color. The 1881-CC is an anomaly as it has a currently low CAC population but is readily available in nice AU and even the lower Uncirculated grades.

Is it possible to put together a meaningful set of CC eagles in the 2015 coin market? This was a set which was challenging in 1985 and 1995; back when the supply of nice coins was greater and prices were lower. Today, I would think it is almost impossible to form a great set unless a collector is willing to really stretch on the choice coins when they come available and work closely with a well-connected specialist dealer to get a shot at the few available coins which don’t come up at auction.

In my experience many collectors working on CC eagle sets are sloppy buyers. They do not know the difference between a recolored, not-choice example of a certain CC eagle versus a choice, original piece and prices realized at auction for really low-end coins tend to be much higher than they should be. I strongly suggest that if you are going to spend $50,000 on an AU 1873-CC eagle you a) learn to tell the difference between a gradeflated AU and a real AU, and b) learn to tell the difference between a coin with natural color and one with artificial or enhanced color.

3. Double Eagles

No area of the rare date gold market saw better overall price performance in the last few years than Carson City double eagles. My gut tells me that prices for most problem-free coins in the EF40 to MS62 range increased around 20% from 2012 to the present and likely higher for certain issues. As much as I love CC double eagles, I believe that they are now at levels which are unsustainable.

  1877-CC $20.00 PCGS AU58 CAC

1877-CC $20.00 PCGS AU58 CAC

Let me give you a few examples. I was recently quoted $24,000 for a decent but nothing special PCGS AU58 example of the 1877-CC. This is a coin with a PCGS population of 52 (with another 31 finer) not to mention an NGC population of 129 in AU58. Even assuming that these figures are well inflated by resubmissions, it is not impossible that there are between 60 and 80 1877-CC double eagles known. And three years ago, I was buying PCGS AU58 examples of this date for $11,000-13,000.

Another example: I was just offered an 1874-CC double eagle in NGC AU58 for $13,000. Between the two major services this is a date with a population of 253 in AU58 with another 31 finer. And three years ago, I could buy a nice hand-selected 58 for $7,000.

These numbers are great if you are a seller. But as a buyer I have a hard time with the new price levels on relatively common dates in the CC double eagle series. This is why I’m now focusing the majority of my buying on a handful of legitimately scarce dates (1871-CC, 1872-CC, 1878-CC, 1879-CC, 1885-CC, and 1891-CC) in EF and AU grades.

Before I go any further, I have to share some thoughts on the 1870-CC double eagle market. In 2014, a record-setting nine examples of this rare issue were sold at auction. These ranged in price from a low of $58,815 for a repaired XF details in a PCGS genuine holder to a high of $411,250 for a PCGS AU53. I would never have thought the market for 1870-CC double eagles was deep enough to handle a glut of nine coins in a year but I was wrong. Enough new buyers were created during the price run up of 2012-2015 that the market was crashed by the presence of so many coins. Of course, it helped that between 2011 and 2013 only three 1870-CC double eagles were sold at auction and most of the new buyers who wanted an example during this period couldn’t find one. I’m impressed that the market for 1870-CC $20’s survived this onslaught and it makes me a strong believer in the future potential for accurately graded VF and EF examples of this date. AU’s not so much, unless they are really AU and not an EF45 in an AU50 or AU53 holder.

I mentioned above that I’m focused more on rare dates than common dates in the CC $20 series. If I do buy the more common dates, I try and buy very choice AU58’s as they seem like much better value to me than MS61’s (many of which began life as AU coins and were gradeflated to “new.”). The price ratio for an AU58 common date CC double eagle is now around 2.5 to 1 ($15,000 for an MS61 versus $6,000 for an AU58). A few years ago the ratio was less than 2 to 1 ($9,000 for an MS61 versus $5,000 for an AU58). The MS61’s have clearly outperformed the AU58’s but think about this: how many collectors can continue to pay $15,000 for an MS61 example of a relatively meh issue like an 1884-CC? Remember what I said above about this market being unsustainable?

  1871-CC $20.00 NGC AU55

1871-CC $20.00 NGC AU55

The quantity of CC double eagles in the market during the last three years has been nothing short of amazing. Looking through my own records, I see that I handled over 20 1884-CC double eagles. Common date CC double eagles are…common. But a date like the 1871-CC is still hard to find. There were nine pieces sold at auction during the Great CC $20 Flood of 2014 but closer examination shows three of these were no grades and I only liked two of these enough to actually bid on them. At $40,000-50,000 for a presentable example, the 1871-CC isn’t cheap but it seems like much better value to me than a common date CC double eagle in MS62 at $20,000+.

Would I suggest starting a Carson City double eagle set in 2015 with levels still at all-time records across the board? Yes and no. I would buy a nice 1871-CC in AU at $50,000 as a long-term hold. I would likely pass on an 1884-CC in MS62 at $20,000 and either fill that hole in my set with a really nice AU58 at $7,000 or I’d wait for a few years to see if the levels on common date CC double eagles come back down to their pre-2012 levels.

Carson City gold remains extremely popular with collectors and it is clearly understandable why: these coins have a wonderful back-story and are truly history in your hands. With prices at the point where only wealthy collectors can now form sets of choice Carson City gold, I would strongly recommend carefully choosing a specialist dealer to work with and to carefully study the coins and the dynamics of the market before you jump in.

I would be pleased to be your “go to” expert in this area and can be reached by email at dwn@ont.com.