In the last few months I’ve been asked a similar question by at least three collectors: what will it take to jump start the Charlotte gold market? This is an excellent question and I’d like to raise a few points that I think will explain what possible scenarios could affect these coins and the impact that they might have. Before delving into these specific points, I think a little background is in order. Charlotte gold coinage has been in a price and popularity slump for the last five or so years. I attribute this to the following reasons:
There are a lot of really low quality coins in PCGS and NGC holders on the market. When one sells for a low price at auction it tends to drag down the nice examples of this issue along with it.
My book on Charlotte gold coins is out of date and scarce. An updated third edition should be ready by the spring of 2008.
A few of the larger marketing firms who traditionally have sold Charlotte coins (both high end and low end pieces) have shifted their focus to other areas of the rare date gold market.
There haven’t been any really interesting collections of Charlotte coins that have come onto the market for a number of years. Often times, when a neat, fresh collection is offered for sale at auction, this generates new collector interest.
Many of the long-time specialists in this field have completed their sets and are not currently in the process of upgrading. This fact, combined with a relative lack of new collectors, has caused the supply of Charlotte coins to outstrip the demand.
I do not mean to give the impression that the Charlotte market is totally dead because it isn’t. I have personally had a good amount of success selling Charlotte coinage in the past few years but I have become extremely selective with what I buy. I will only purchase choice and original coins and I am probably less willing to make a slight allowance for “off quality” as I am in a more popular area such as Dahlonega gold or New Orleans double eagles. I know for a fact that there are a number of collectors working on VF-EF date sets in all three denominations and I have had a relatively easy time selling any very high quality (MS63 or better) pieces I find which have great color and eye appeal and/or which have a great pedigree.
Now, for some answers.
There is absolutely no question that the Charlotte market is not being helped by the existence of some really piggy coins in holders. I think this problem will be helped by the CAC stickering of nice coins which will generate new interest by collectors and dealers alike. New collectors will be helped by the fact that they can determine which coins are believed to be nice for the grade.
From my experience, a new (or updated) book on any subject generates a lot of interest. I can’t imagine that an improved and easily available Charlotte book won’t get a few new collectors interested. It will probably also motivate a few marketing firms to start selling Charlotte coins as they will have a guide to send collectors and to assist their sales force in making presentations.
The combination of CAC stickers, a new book and available product would certainly be good motivation for said marketing firms to sell Charlotte coins again. This might help remove some of the lower end and very high end pieces from the market which will leave the middle to upper middle end coins for collectors. When the Charlotte market was at its healthiest stage in the 1990’s, strong interest was seen not only in the collecting segment of the market but in the mass marketing segment as well.
In their January 2008 FUN sale, Heritage is going to sell a wonderful, fresh group of Charlotte coins called the Carolina Circle collection. This will be one of the first really important groups of Charlotte coins to be offered at auction since the incomparable run of collections sold at auction between 1995 and 2002 (Pittman, Bass, North Georgia, Miller, etc) and I would not be surprised if this creates a few new collectors.
The economics of any market are very simple. If the demand exceeds the supply, prices go up. Prices for nice EF40 and EF45 Charlotte coins have doubled in the past five or so years because there is a strong collector demand for these. Prices for overgraded, unattractive AU55 and AU58 coins have actually dropped (in some cases considerably) in the past five years because collectors do not want them and demand is—rightfully—very low for said items.
Personally, I think the sweet spot of the Charlotte market right now is nice AU55 and AU58 coins. These are, in most cases, very scarce but premiums are much lower than in the past. As an example, around five years a common date Charlotte half eagle in EF was worth around $800-1,000 while a common date in AU55 was worth $3,000-4,000 (or approximately 4x the price of an EF). Today, the EF is worth around $2,000-2,500 while the AU55 is still worth $3,000-4,000 (or approximately 1.5-2x the price of an EF).