Impaired Proof gold. What is it and do collectors covet these coins? This article takes a quick look at an interesting, little-understood subject. Proof gold coins were struck in very small quantities for collectors. Mintages figures for most issues produced before 1900 are extremely low; in many cases less than 50 coins per year. The typical survival rate for a pre-1900 Proof gold coin is around 50% of the original mintage figure. Most of the coins that have survived were handled with care and grade PR64 to PR66 by today’s interpretations. But a small percentage of the surviving Proofs were mishandled and now grade lower than this.
There are essentially two ways in which a Proof gold coin can become Impaired. It can either have been spent (accidentally or on purpose) and received wear from circulation or it could have been mishandled through improper storage and/or harsh cleaning(s).
I have heard stories that during the Depression, a number of Proof gold coins were spent by collectors who could no longer afford to have high face value coins. As an example, it is not uncommon to see Proof Liberty Head double eagles from the 1890’s and the 1900’s which are lightly circulated. By the beginning of the Depression, these coins were not worth substantially more over face value and dozens (if not hundreds) of pieces were placed in circulation.
Proof gold coins which are circulated are very easy to spot. They typically show noticeable marks in the fields and signs of friction on the high spots. Because of the fact that proof gold coins have extremely reflective surfaces, these marks tend to be very heavily amplified and appear worse than they might actually be.
How these marks affect the grade of a Proof gold coin is fairly subjective. It is very unusual for a lightly circulated Proof gold coin to be graded less than PR55 or PR58 by PCGS or NGC. If a Proof gold coin saw a considerable amount of circulation, the surfaces may no longer show enough reflectiveness to convince the grading services that the coin was actually struck as a Proof. In the instances when Proof gold coins of a certain year were struck from the same dies as business strikes, identification may prove to be impossible.
Many business strike gold coins with light wear can be quite attractive; especially if they are original and uncleaned. Lightly circulated Proof gold coins tend to be generally unattractive and, as a result, they do not appeal to most collectors. There are certainly exceptions to this rule and I have seen gold coins which grade PR55 or PR58 which have fairly good overall eye appeal.
Proof gold coins with significant hairlines from prior cleanings are another story. These aren’t really “impaired” and the grading services will generally put them in holders as long as the hairlines present on the surfaces are not totally obtrusive. I have seen a decent number of gold coins graded PR60 or PR61 which have clearly been harshly cleaned with an abrasive. If these were common modern issues, they wouldn’t be encapsulated but the fact that they are rare dictates that they tend to be assigned a “net grade.”
I, for one, do not care for harshly cleaned Proof gold coins. Frankly, they are ugly. And if you are going to collect Proof gold coins, the chances are good that you care about the aesthetics of the coin.
But there are circumstances where I think that Impaired Proof gold coins are very interesting. As an example, I recently bought a PCGS PR 1870 quarter eagle. This is an issue with an original mintage of just 35 Proofs. After some research I discovered that this date was rarer than I thought as a Proof. In fact, there are as few as seven or eight Proofs known. I priced the coin at a touch under $5,000 and got a number of inquiries about it the first day it was listed on my website. Here was a coin that was pretty decent to look at, genuinely rare and reasonably priced, considering its rarity.
In conclusion, I don’t think that I would ever make Impaired Proofs a major part of my coin collection but there are clearly instances when selected examples could be pretty intriguing.