As recently as a few years ago, collecting Type Two Liberty Head double eagles was very popular. A marketing firm located in the Southwest had actively promoted this series, other firms had jumped on the Type Two bandwagon and the series had caught on with collectors. Then, with little warning, the aforementioned marketing firm shifted their focus onto other series and suddenly the Type Two double eagles were out of favor. This has left the savvy collector with an opportunity that I find very interesting. Before I get specific about the Type Two double eagles that I feel are overlooked and undervalued, let me give you a little bit of background about this series. The Type Two double eagles were produced from 1866 until 1876 and they are so named due to having the second major design of the Liberty Head type; in this case the addition of the motto IN GOD WE TRUST on the reverse. These coins were produced at the Philadelphia, San Francisco and Carson City mints. The CC issues are well-known and avidly collected. The San Francisco issues tend to be condition rarities (i.e., they are obtainable in lower grades but scarce in higher grades). It is the Philadelphia issues that, I believe, offer the best value to collectors.
Many of the Philadelphia issues of this design type are extremely common. Dates that fall into this category include the 1873, 1875 and 1876. But there are a few that are scarce in all grades and are priced within the price parameters of many collectors. With the value levels of even common dates double eagles soaring in the recent months, these Philadelphia issues seem like a particularly good value right now.
My first sleeper date is the 1866. It is a numismatically interesting issue as it is the first year-of-issue for the Type Two design. The 1866 is usually seen in lower grades and I consider it to be moderately scarce in the middle to higher AU grades. It is still possible to purchase a very presentable About Uncirculated 1866 double eagle for less than $3,000. Given the fact that prices for this date jump up two to three times in the lowest Uncirculated grade(s), I think nice original AU55 to AU58 coins are very good values.
For many years, the 1868 was THE sleeper date in the entire Type Two series. It is now well-publicized and no longer an especially affordable coin. That said, it is still quite scarce in even EF45 to AU50 and it is a coin that is especially difficult to find with original color and nice surfaces. Trends has risen appreciably for the 1868 douible eagle in the last three years but nice examples still bring full Trends or above. As an example, Heritage 12/09: 1939, graded AU58 by PCGS and verified by CAC (and extremely choice in my opinion) brought $8,625 against a Trends of $8,500.
The 1869 is an issue that I don't see very often and I think it is very undervalued. Nice mid-range to upper-range AU coins are still priced at the $2,500-3,500 level which seems extremely reasonable for a coin that is scarce and which becomes quite rare in higher grades.
While the 1868 is the rarest Philadelphia Type Two double eagle from the standpoint of overall rarity, the 1870 is not far behind. And the beauty of this issue is that it is currently priced at about half the market rate of the 1868. The 1870 is hard to locate even in the lower AU grades and choice, original AU55 to AU58 pieces are great value at current levels. Expect to spend around $4,000-5,000 for a nice AU55 and $5,000-6,000 for an AU58.
One final undervalued Type Two is the 1871. This date has a slightly different rarity profile than the others mentioned. It is comparable to the 1869 and 1870 in terms of overall rarity (in fact it might even be a bit rarer) but it is slightly more available in Uncirculated due the presence of a small hoard which hit the market many years ago. In AU55, PCGS has graded just twenty pieces (with another twenty higher) but the price level remains affordable. The last few 1871 double eagles I have seen in AU55 have traded in the $3,500-4,500 range while AU58's are worth $5,000-6,000.
As with all double eagles, I'd recommend that buyers be patient when seeking these coins. Look for examples with minimal obtrusive marks, non-processed surfaces, and nice natural color. When the right coin does appear for sale, I'd recommend immediate and decisive action as these pieces are becoming more popular with collectors.
Despite the fact that double eagles are easily the most popular denomination of United States gold coin with collectors and investors, there are definite "pockets of value" that the informed individual can locate with a little basic research. In the Type Two series the five Philadelphia issues that I mentioned above offer the collector alot of rarity for the money; not too mention an attractive large-sized coin with nearly an ounce of gold.