Key Date Coins

I had an interesting conversation with another coin dealer the other day. We were discussing what we are buying (and not buying) right now and he mentioned to me that, for the last few years, he has been primarily focused on buying only the key date coins in all series, even in such esoteric areas as Charlotte and Dahlonega gold. Focusing on keys has been a great strategy in mainstream series such as Barber coins or Morgan dollars. Issues like the 1901-S quarter and the 1893-S dollar have clearly outperformed the rest of the market during the last six to nine years. This got me to thinking: is this performance also the same in the market areas in which I specialize? To determine this I decided to select a small group of key dates from each series and to then compare them with a “generic” date as a baseline. The results are interesting.

The first item I chose was the ever-popular 1861-D gold dollar. As a generic comparison, I selected an 1859-D gold dollar. The former is the key Type Three issue from this mint while the latter is one of the more common dates.

In June 2000 Heritage auctioned a PCGS AU55 example of the 1861-D gold dollar for $12,075. Today, a similarly graded 1861-D would probably fetch over $30,000. I think it’s a safe bet to say that this issue has at least doubled—if not tripled—in value since the beginning of the decade.

In comparison, an AU55 example of the 1859-D gold dollar in AU55 would bring around $3,750-4,000 at auction today. In looking back at auction records from the 2000-2002 era, I noted at least three AU55 coins selling for $3,000-3,300. The price growth of the 1859-D gold dollar has been marginal at best. This does not totally surprise me, given that the Dahlonega market is very collector-oriented and that this sort of market is generally skewed towards rare dates or “neat” specific coins.

(NOTE: An important factor that I am not going to delve deeply into here is gradeflation. Even though the 1859-D gold dollar in AU55 appears to have experienced little price growth in the last decade, it is likely that coins sold as AU55 in 2002 are, by today’s standards, at least AU58; if not better. Gradeflation is, for many more common coins, what has caused the greatest amount of price increases).

The second item I chose was the 1842-C Small Date half eagle. This is the rarest collectible gold coin from Charlotte. As a generic comparison I selected an 1849-C half eagle. It is one of the more common issues from this mint.

Heritage sold a pair of comparatively high grade 1842-C Small Date half eagles in their June 2008 auction. A PCGS AU58 brought $43,125 while an NGC AU55 realized $31,050. Looking back, I noted that Heritage sold a PCGS AU58 in April 2002 for $55,200 and a PCGS AU55 in January 2003 for $35,650. The price performance of this key issue has been poor in the last five years and the 1842-C Small Date in AU is clearly worth less today than it was in the past.

In AU55, an 1849-C half eagle is currently worth $3,500-4,000. Looking back at auction records from around 2002, the same coin was worth basically the same.

What I think this shows is that in an area like Charlotte gold that hasn’t been very popular during recent years, even though a coin is a key issue (like the 1842-C Small Date half eagle) this doesn’t mean it will rise in value. It seems obvious to say this but, no matter how rare a coin is, if it isn’t part of a popular series then it is unlikely to increase in price.

How about Carson City double eagles; an area of the market that was popular in 2002 and is even more popular today? I chose the 1871-CC as my key date and the 1892-CC as its generic counterpart.

Current values for About Uncirculated 1871-CC double eagles are as follows: AU50= $32,500-35,000; AU53= $40,000-45,000 and AU55= $50,000-55,000+. Looking back to early 2003, Heritage sold a PCGS AU50 example for $14,950 in their January 2003 auction and an NGC AU55 in the same auction for $17,250. Clearly, levels for this date in AU have almost tripled in the last five years.

How about the common 1892-CC in AU grades? Heritage recently sold an NGC AU55 in their June 2008 auction for $3,450. Going back to June 2004, they sold a PCGS AU55 in the same grade for $1,840. A more detailed examination of auction records from this era shows that the typical AU 1892-CC double eagle in AU has doubled in value in the last five years.

This is a fairly interesting case study. CC double eagles have performed really well in the last few years due to their popularity and just about every coin has doubled in value. But the key issues in the series (1870-CC, 1871-CC, 1873-CC, 1878-CC, 1879-CC, 1885-CC and 1891-CC) have outperformed their more common counterparts. The one exception to this rule tends to be in the area of high grade coins. Even the common CC double eagles in high grades (in this case MS62 and better) have performed exceptionally well in the last few years due to strong demand.

The one problem with the strategy of buying only key dates is that in most gold series, these issues are very expensive. With entry level undamaged 1861-D gold dollars now exceeding $20,000, only elite collectors can realistically look to purchase such coins. And maybe this amount would be more rewarding if spent on three or four nice common date Dahlonega coins in AU instead of one very-rare-but-not-so-aesthetically appealing 1861-D.