I was discussing the State of the New Orleans Gold Coin Market yesterday with a collector and he pointed out something very interesting to me. In the calendar year of 2007, there were probably fewer important high grade New Orleans eagles sold than any other gold denomination from this mint. This got me thinking and the more I looked into this statement, the more I realized that it was true. 2007 began with a bang for New Orleans eagle collectors when Stack’s sold the Morgan collection. Included in this collection were coins such as the only Uncirculated example of the 1879-O (an NGC MS61 that I purchased as an agent for a California collector for a record $52,900) and the third finest known 1880-O (also graded MS61 by NGC; I purchased this for the same collector for $16,100).
After the strength of this sale, I expected the proverbial flood gates to open and a number of important, high grade New Orleans eagles to become available.
Shortly thereafter, I was able to offer the magnificent Pinnacle Collection of New Orleans gold which contained a number of Condition Census pieces in all denominations. With the exception of double eagles which were never a focus of the original owner, the eagles in this collection were probably the weakest denomination, at least from the standpoint of grade. There were some truly lovely eagles in this collection but unlike the quarter eagles and half eagles (which were virtually all MS60 and better and which included numerous coins high in the Condition Census) the eagles were mostly nice, original AU55 and AU58 coins.
After this flurry of activity in January, the New Orleans eagle market was very dry until Heritage offered a small but interesting group of pieces in the ANA sale. Of particular note were the second finest 1882-O (a PCGS MS63) that sold for a record $37,375, one of the finest known 1897-O (a PCGS MS64 that realized $14,950)and the third finest known 1899-O (an NGC MS64 that went for a reasonable $12,663). Another important piece in this sale was a very high end PCGS MS63 1892-O that sold for a record-setting $10,350.
And then...nothing. The year ended with virtually no important New Orleans eagles appearing at auction and this trend appears to be continuing into 2008. Having just reviewed the FUN offerings from Bowers and Merena, Heritage and Stack’s I noticed a virtual absence of any significant New Orleans eagles.
So where are all the coins and why are they not coming up for sale? These are good questions and while I do not have definitive answers, there are a few reasons that I suspect are the root cause.
The first is pretty obvious. Many New Orleans eagles (especially the No Motto issues) are very rare in high grades. When you are talking about a coin like an 1842-O eagle in properly graded Uncirculated, you are looking at an issue with maybe three or four known. Coins that are this rare do not trade with a great degree of frequency.
Especially when we look at reason number two. The New Orleans eagle market is still in its infancy in terms of development and the “players” in this market tend to be buyers at this point as opposed to sellers. This means that many of the really cool pieces that exist are in tightly-held collections and are not likely to be sold at any time soon.
Another not-so-obvious reason is what I call the “spillover effect.” New Orleans eagles have a number of specialized collectors and these individuals are often competing with Liberty Head eagle specialists when important coins come up for sale. I know of at least three collectors who are working on completing high grade sets of Liberty Head eagles. This means that if, for example, a high grade 1846-O eagle were to become available, the New Orleans eagle specialists would be duking it out with the Liberty Head eagle specialists (not to mention the generalists who like interesting coins) creating an unusual amount of competition.
One other reason for the lack of available coins has to do with poor price reporting. I would contend that a coin like the aforementioned high grade 1846-O eagle is worth a lot more today than it was in, say, 2003. But Trends and CDN Bid levels are essentially the same as they were five years ago. Since this very rare coin shows no “paper profit,” what motivation would its owner have to sell it unless he needed money? Until Trends and Bid show accurate values for coins such as high grade 1846-O eagles, the people who own them have no real motivation to sell.
There were a few other interesting New Orleans eagles that sold privately in 2007. I sold Condition Census examples of dates such as 1843-O, 1849-O, 1859-O, 1881-O, 1883-O, 1894-O and 1904-O. I would assume that some other pieces were sold by dealers who specialize in rare gold coins as well.
It will be interesting to see if these market conditions continue for New Orleans eagles in 2008 and beyond. I see a strong new level of demand for this denomination and expect some deep-pocketed new collectors to focus their attention on New Orleans eagles. I just wonder if they will be able to find enough coins to satisfy their hunger.