In the fourth installment of my series of State of the Market articles, I take a look at the popular Three Dollar Gold piece series. How has this cult favorite fared in the past few years and what does the future look like for this denomination? After years of neglect, interest in the Three Dollar series spiked dramatically in 2004 and 2005. This can be directly attributed to two reasons: the publication of the first book on Three Dollar gold pieces (written by myself and the legendary Q. David Bowers) and expert marketing and promotion of the series by a few firms which introduced many new collectors to this interesting series.
For a variety of reasons, the promoters who focused on Threes moved on to other series in the middle of 2006 and the last year or so has seen a fairly dramatic drop in prices in the series. I would estimate that high grade common dates Three Dollar gold pieces have dropped between 30 and 50% while rare dates have seen price drops more in the range of 10-30%.
Perhaps the most dramatic price decreases in the entire series have been for common dates in MS64. These can now be bought for $6,000-7,000 but they were priced at $12,000-14,000 around two years ago. MS63 common dates are now $5,000 to $6,000; they used to be $9,000 to $11,000. MS62 common dates now sell for $3,500 to $4,500 and were priced at $6,000 to $7,000 at the height of their popularity.
In my opinion, common date Three Dollar gold pieces are a great value right now if they can be bought at around $6,000. These coins are generally very nice and if you can find a high end example with good color and luster as well as minimal marks at the low end of the current value range, I think this is an excellent coin to put away for a while. I find it a little strange that an MS64 common date is selling for just a $2,000 premium over a common date in MS62. My gut feeling is that an MS62 is not a great deal at this level.
The rarer date mintmark issues in this series are, for the most part, doing rather well. There is strong collector demand for issues such as the 1855-S and the 1857-S and the 1860-S seems to have become extremely hard to locate in grades above AU55.
One issue that is especially interesting to follow is the 1854-D. I have always thought of this as being a coin that, while technically a Three Dollar gold piece, is totally different from the other issues in this series. The reason for this is obvious: its primary source of demand is from Dahlonega collectors, most of who will never aspire to own another Three Dollar gold piece besides this date. Nice AU examples seem to have formed up considerably in the last six months and I would say they are worth between 5 - 15% more than when they hit a comparatively low level last summer.
Another interesting issue is the 1854-O. This date has become the most two-tiered Three Dollar gold piece in terms of value. It is clear to me that NGC tends to be considerably more liberal when it comes to the 1854-O in AU, especially in the upper ranges of this grade. A nice PCGS AU55 or AU58 1854-O is really quite a rare coin and it now commands a strong premium over the typical NGC graded AU55 or AU58. I have also noticed that 1854-O Threes with original color and surfaces and good strikes are commanding strong premiums over bright-n-shiny, processed examples.
So what lies ahead for this denomination?
I think Threes are far too interesting and far too collectible to stay inactive for long. My prediction is that you will see some of the marketing companies that dropped out of the series a few years ago get back in. It’s hard not to like a Three Dollar gold piece that was priced at $10,000 as recently as a few years ago when it is now priced at $7,000.
My guess is that you will see the greatest new interest in the series occur with the most interesting coins. These include the following:
1854-D, all grades
All San Francisco issues (except for the 1856-S) in AU50 and above
Civil War issues, all grades
Rare low mintage dates such as the 1858, 1865 and 1877 in all grades
Issues with mintages of less than 1,000, AU50 and above
When you take a hard look at this series, it’s easy to see what happened in 2005 and 2006. Prices went up too quickly, too many coins came on the market and the speculators who were driving the market bailed. My best guess is that, starting soon, the Three Dollar gold series will go back to being mostly collector-driven and it will regain its spot as a popular, oddball gold denomination that has long been in demand.