When Is Deep Cameo/Ultra Cameo Proof Gold Worth a Premium?

Having recently handled a considerable number of impressive Proof gold coins, I've been thinking about when a specific coin is worth a premium because of is status as a Deep Cameo (PCGS' modifier) or Ultra Cameo (NGC's modifier). After a brief explanation of these terms, I'd like to use a few examples of the coins I've sold to illustrate scenarios in which I feel a premium is merited. Proof gold coins are struck specially for collectors in very limited numbers. They are made with care using specially prepared planchets and typically struck with multiple blows of the dies. One of the features of most pre-1900 American gold coins in Proof is that they show cameo-like contrast between the devices (which are frosted) and the fields (which are watery and reflective). Collectors appreciate this appearance; as well they should, as a gold coin with deep, strong cameo contrast can have wonderful eye appeal.

The question most collectors ask about cameo proof gold coins is when are such pieces worth a price premium.

Given the fact that most pre-1900 proof gold coins have very low mintage figures, we can assume that nearly every piece is going to show some degree of cameo. But there are a few coins for each year that have extreme cameo contrast. We can assume that these are either the very first pieces produced or they were coins that were made with extra care for their visual appeal.

Let's look at a proof gold coin with an original mintage figure of 30 coins as an example. The typical survival rate for a proof gold coin struck between 1860 and 1880 is around 50% (for large denominations such as eagles and double eagles this figure is probably more like 25-33%). Given this figure, let's say that fifteen or so are known.

Of these fifteen, there are probably at least a few that are either impaired or they have been cleaned and/or processed to the point that they do not have an original appearance. So let's say the number of pertinent coins is around ten. There might be seven or eight that have been graded by PCGS and/or NGC and given the designation "cameo." Then let's say that the other two or three coins have been designated as "ultra cameo" or "deep cameo." How much more are these coins worth?

In my opinion, if these coins have great eye appeal and are not overgraded, they are probably worth a 10-20% premium over a regular cameo example. This is making the assumption that they are significantly rarer than their regular cameo counterparts. In the case or large denominations, where eye appeal is so critical, this premium might even be a bit higher.

I'd like to use two specific coins to illustrate my theory about ultra cameo/deep cameo premiums. These are a pair of gold dollars that I recently sold.

The first coin is an 1862 gold dollar graded PR66 Deep Cameo by PCGS and awarded a sticker by CAC.

This Civil War issue has an original mintage figure of 35 coins of which slightly fewer than half survive. In my experience, the mint did an excellent job of producing proof gold coins in 1862 and the overall quality of most of the gold dollars I've seen has been above average. In other words, Proofs of this year are supposed to come with good contrast and there should be no premium whatsoever for a coin that is a regular cameo.

But if you take even a casual look at this specific coin, you'll see that it has incredible eye appeal. The appearance is "black and white" with the type of contrast that can literally be seen across the room. I felt that this was one of the best looking Proof gold dollars that I had ever viewed and this was a reason that I purchased the coin at the 2012 FUN show.

As I was figuring a value for this coin, I had to decide on what sort of a premium its beauty would compel me to pay. I certainly wouldn't have paid a 50% premium (although in certain silver series, a premium of this sort isn't uncommon) but I felt a 10-20% premium was certainly in keeping with its stunning appearance.

This was an instance where I wasn't so much paying a premium for an ultra cameo coin's rarity (there are a few other 1862 gold dollars known with a deep cameo/ultra cameo appearance) as I was for its beauty. What was even more appealing to me was the fact that this coin has a "natural" deep cameo appearance.

You almost never seen proof gold coins anymore with the old-time, deep, hazy look that you used to see when collections like Norweb, Pittman, Eliasberg or Childs were sold. In fact, I would venture to say that most collectors and dealers who have entered the hobby after 1990 have seen virtually no truly original Proof gold coins (a welcome exception to this was the amazing Henry Miller collection of Proof gold that Heritage sold at their FUN auction in January 2011. While not every coin in this group was original, some were just amazing and it was refreshing to see Proof gold coins that looked like this after so many years of character-free pieces being offered...).

What's even harder to find these days are "old time gem" proof gold coins that aren't so hazy or richly colored that they don't show deep cameo contrast. That's why a coin like this 1862 dollar is special, in my opinion, and it merits a strong premium. It was original yet it was commercially viable for those collectors who don't "get" originality.

The next coin I'd like to discuss is a PCGS PR65 Deep Cameo 1871 gold dollar also awarded approval by CAC. While this coin has a mintage which is close to the 1862 (a total of 30 versus 35 for the 1862) it is rarer due to the fact that it appears that a portion were melted after they went unsold in 1871. It is possible that as few as eight to ten are known and this is actually one of the single rarest Type Three dollars in proof.

One interesting fact about this date is that it is not a year that tends to come as well made as the 1862. In 1871, the amount of contrast wasn't as great and many survivors in all gold denominations show lintmarks or slight planchet irregularities. It is also a date that, as a Proof, tends to be a little rarer than the 1862 in higher grades. I believe that this 1871 is the second finest known, trailing just a single PR68 at NGC.

This coin has nice cameo contrast although not as much so as on the 1862. In the case of this coin, I think its premium is predicated more on rarity than on extreme eye appeal. It is the only PCGS example in PR65 or better to have been designated as a Deep Cameo and this fact, I believe, gives it at least a 10-15% premium over a regular cameo example in the same grade.

In summary, I feel that the two reasons to ascribe a strong premium to any proof gold coin due to its status as a deep cameo/ultra cameo are either extreme eye appeal (or beauty) and extreme rarity (status as the only example of an issue with this designation or else the single highest graded with this designation). Obviously, the best scenario is a proof gold coin that is both extremely rare and extremely beautiful. In this case, the premium could be very high; maybe as much as 25-50%.

Some Thoughts on Proof Gold Survival Rates

As someone who handles a decent amount of rare and interesting Proof gold coinage, I've been thinking about survival rates. I'd like to share some thoughts about typical survival rates and why certain issues don't comply with the "basic laws." First, a little background. The United States mint struck proof gold coins as far back as the 1820's, but production became more established by the 1858-1860 era; which neatly coincides with the beginning of coin collecting as a hobby in this country. Production of most proofs remained small until the early to mid-1880's, when collectors and dealers became more interested and a decent-sized mania for Proofs began to take hold.

For most United States Proof gold coins, I believe that the following survival rates are pretty consistent:

*Pre-1870 gold issues, with exceptions, appear to have a survival rate of around one-third of the original mintage.

*Issues from around 1870 to around 1890, with exceptions, appear to have survival rates of around half of the original mintage.

*Issues from 1890 until the end of the Liberty Head design (1907) typically have survival rates that range from one half to two-thirds of the original mintage.

Let's now take a look at some of the factors that influence survival rates of Proof gold coins. Please note that these are not listed in order of importance.

1. Original Mintage Figures. This seems pretty obvious but it is an important factor that needs to be discussed. A gold issue with a low mintage (say 25-50 coins) tends to be rarer than an issues with a relatively high mintage (100 or more).

However, there are some notable exceptions to this rule.

There are some years that mintage figures are incorrect. An example of this is the 1861 gold dollar with a reported mintage of 349. This figure has never made sense to me and given the small number of survivors (two to three dozen) and the unlikely scenario that nearly all of the supposed "349" struck were melted.

The opposite situation exists with Proof Three Dollar gold pieces dated 1875 and 1876. These are Proof-only issues; i.e, they were made only in a Proof format with none made for business strike purposes. The reported mintage figures for these two dates are 20 and 45, respectively.

But there are probably more than 20 and 45 known of these dates. As an example, looking at the PCGS and NGC population data for the 1876 three dollar, we see that eighty examples have been graded. Even if we discount, say, 30 of these as resubmissions, this still means that 50 examples may have been graded.

It is my belief that both the 1875 and 1876 three dollar gold pieces were restruck, in order to fill a demand among collectors, either later in the year(s) or, perhaps, a year or two later.

2. The Size of the Coin. Small sized Proof gold (i.e., gold dollars and quarter eagles) tends to have a higher survival rare than larger sized coins.

The reasons for this are fairly obvious. The face value of a small gold coin means that it was more likely to survive the Depression era where a number of larger Proofs were spent or melted by collectors because of their high face value and low numismatic value.

3. The Era in Which it Was Struck. I mentioned above that proof gold from the 1890's was saved with greater regularity than those issues from the 1860's.

In the 1890's, coin collecting was a well-developed hobby. But in the 1860's, there were far fewer collectors. It is a known fact that many Proofs struck in the 1860's and 1870's went unsold to collectors and were later melted by the mint. Even if the number melted was not great (say five or ten coins) with issues that mintages of just 25-50 coins, this small number becomes significant.

As far as we know, proofs were still melted up to the early 1900's but not as often as with earlier issues.

4. Economic Issues I mentioned meltings during the Depression in the second bullet point above. This is an important factor, worth repeating.

As remarkable as it seems today, a Proof double eagle in the early 1930's had very little numismatic premium. For some collectors, it made more sense to spend a Proof double eagle from the 1880's then it did to try and sell them to a coin dealer or place them in an auction. Many higher denomination proofs (specifically eagles and double eagles) were lost in this fashion. Some were melted while others circulated so much that they are barely recognizable as Proofs today.

There are other issues that were produced during years in which the economy suffered. The Panic of 1893, while not as well known as the Depression, was a short-lived but highly significant downturn in the economy. It is likely that proof gold coins from 1892-1894 were unsold and melted due to collectors suddenly not being able to afford luxuries such as coins.

5. Contemporary Hoarding Not unlike with today's modern coins, dealers and collectors speculated with smaller denomination proof gold in the 1880's and early 1890's. If you look at mintages for gold dollars, they increased dramatically in the 1880's: from a low of 36 in 1880 to a high of 1,779 in 1889. This was due to significant demand from hoarders and speculators; a situation not all that much different than what we see in 2011 with the hoarding of the 25th anniversary ASE sets!

These issues that were hoarded tend to have higher survival rates than earlier issues, due to the fact that they went into numismatic channels.

How exactly does a collector determine the survival rate of a proof gold issue he is contemplating buying? I think the best way is to study auction appearances over the years. A close study will often reveal interesting anomalies. An example: I recently bought an 1870 gold dollar in PR65. I did a little research and realized that I had only handled one example in twenty+ years and not an especially nice one at that. A study of auction records showed that only a few Gems have ever been sold and nothing better than PR65. My sort-of-cool coin suddenly seemed very cool, not to mention exceedingly rare.

Why is Proof Gold Suddenly a Hot Commodity?

Without a lot of fanfare, Proof gold coins have become a strong area of the market. In this blog, I'd like to postulate as to why Proof gold coins have become so avidly desired, which Proof coins are currently in greatest demand and what the short-term outlook is for Proof gold. To understand the current Proof gold market, it is important to understand the market over the past decade. The years from 1995 to 2000 represented the greatest period of availability for rare Proof gold in modern numismatic history. The sale of the Childs, Bass, Pittman and other collections made very rare issues seem almost common. I can remember there being multiple examples of issues from the 1860's and 1870's available simultaneously. This availability was coupled with a lack of demand for expensive coins once the Bass sale(s) were finished in 2001.

I think dealers who were around for this period (including myself) got a little spooked by expensive Proof gold coins. We remembered owning great, great pieces in 2000-2003 and not being able to sell them. Even when the coin market started getting very strong around 2004 and expensive coins were suddenly in vogue, I can remember that Proof gold seemed to lag the market. Everyone suddenly wanted great business strikes but formerly in-demand Proof gold just seemed harder to sell.

(Side note: Proof gold had been actively marketed in the 1980's and early 1990's. During the go-go investment years of the late 1980's I can remember Coin World ads touting Proof gold as "real coins for real men." But the coin market goes through cycles of demand and it seemed that many of the biggest dealer advocates of Proof gold in 1988 were no longer buyers of such coins in 1998).

This seems to have changed.

What are the major reasons for the sudden surge in demand (and increased prices) in Proof gold? The first answer has to do with supply. In the last year or so, there have been some really interesting Proof gold coins available. The Miller collection, which was featured in the Heritage 2011 FUN Platinum night sale in January, contained many coins that I think will be looked at in the future as truly significant. The quality of these coins was amazing and it was one of the few "time capsule" groups of Proof gold that still exist(ed). By this, I mean the coins hadn't for the most part been conserved. Proof gold with original surfaces is exceedingly hard to find in 2011, and the Miller sale had coins that were not only rare, they were magnificent.

The second reason has to do, obviously, with demand. There was a low level of demand for Proof gold as recently as a few years ago. Oh sure; there were a few people collecting Proof gold by date and when something really rare and really cool appeared at auction it would sell for a strong price. But since late 2007/early 2008 there has been a new breed of collector-investor that has suddenly made a beeline towards Proof gold.

These individuals are wealthy, sophisticated, and generally operate well under-the-radar. They tend to like U.S. gold coins that are very rare, very beautiful and historically significant. For a number of reasons, Proof gold is especially well-suited to them.

But not all Proof gold.

In the coin run-up of 2004-2007, super-grade Proof gold coins were in demand. Investors liked coins like PR68 Liberty Head quarter eagles and PR67 Type Three gold dollars. Now don't get me wrong; these are great coins and they are certainly rare in the grand scheme of things. But their value is derived more from grade than absolute rarity.

Case in point: a perfectly wonderful common date PR65 Deep Cameo quarter eagle from the early 1900's is worth around $17,500. The same coin in PR69 Deep Cameo is worth around $90,000. The quarter eagles from the turn of the 20th century are comparatively available (by the standards of Proof gold) and these sophisticated collectors, many of who have made a lot of money in the stock market by value investing, just don't see the need to own a $90,000 common date Proof 69 Liberty Head quarter eagle.

What does appeal them are Proofs that are very old (in this case, pre-1880) or very rare. And if the coin is large-size (ten dollar or twenty dollar) so much the better.

There are a few other parameters that seem to be important with this new breed of collectors. Off-quality coins won't fly so the baseline for grade seems to be at least PR64. Coins with great eye appeal are in demand and this means that Ultra Cameo or Deep Cameo pieces are commanding more significant premiums than in the past.

With the exception of the Miller coins, originality doesn't appear to be as much of a factor as I would have thought. My unscientific reasoning for this is that there are so few original Proof gold coins left that a premium is hard to place on them. And, most of these collectors really don't like the deep, cloudy natural toning that might be found on an unmessed-with proof double eagle. Big and bright is better and this is the market reality, for better or worse.

The quality of the coins in the Miller sale were an anomaly and you can't necessarily use them as a barometer of the market. There were a number of very rare Proof gold coins in the recent Heritage that sold for very strong prices and were apt metaphors for the entire thesis of this blog. Let's peek at a few.

Lot 5435 was a PCGS PR64 DCAM example of the 1860 eagle. Despite a seemingly high mintage of 50, this is a very rare coin with an estimated ten or so known. The example in the Heritage sale was decent for the grade with a nice naked-eye appearance. It sold for $161,000. The exact same coin sold for $69,000 back in June 2004; its last appearance at auction. More tellingly, a similarly graded but different coin brought $83,375 in January 2009.

An even more interesting coin was Lot 5492; an 1860 double eagle graded PR64 Cameo by NGC. This exact coin had last sold for $94,875 (as a PCGS PR63) back in September 2004. It brought $230,000; exactly the same amount as a similarly graded example (but much nicer, in my opinion) just sold for in the Miller auction.

I was certain that the next lot (5493) was going to be a big-ticket item as it had all the Big Bright and Rare factors going for it. The 1870 double eagle, one of around ten or so known from an original mintage of 35. Another factor was that the coin was actually nice; it was stickered by CAC and I thought it was solid for the grade. In the Miller sale, graded PR64 DCAM, this exact coin brought $189,000. Despite being freshly upgraded (kudos to Heritage for pedigreeing it...) this coin brought a solid $345,000.

Just to let you know that not everything that was big, bright and rare sold for a ton in the Heritage sale, Lot 5496 was an interesting study. Graded PR64 Cameo by NGC, the 1878 double eagle sold for $69,000. This is a very rare coin with no more than ten known from the original mintage of only twenty. Why did it sell for "just" $69,000? Probably because it really wasn't very nice. Also, this is an overlooked date that doesn't have great auction records despite its great rarity. Heritage 1/09: 4135, graded PR64 DCAM by PCGS and nicer than the coin referenced above brought $74,750 in a weaker market.

My guess is that we'll see some more big-ticket Proof gold coins on the market this summer during the ANA sales. Anyone who bought very rare Proof double eagles around 2004 to 2006 has seen them double or even triple in price and this will motivate some collectors to sell. I'm not certain that the market can sustain this price movement but a coin like an 1870 double eagle in Gem Proof at $500,000 or even $600,000 might not seem as impossible as it sounds as you are reading this right now.

What's Hot/What's Not: The Coin Market As of May 2009

It’s been a longstanding tradition of mine to write a What’s Hot/What’s Not blog a few times a year. The last time I did this was, I believe, around the beginning of 2009. A lot has changed since then and, as we head into the summer, I’d like to share my thoughts about the coin market in general and United States gold coins to be more specific. In the past, it was always very easy to discuss those areas of the market that were “hot.” But with the current economic situation, it probably makes more sense to discuss what’s “not in meltdown mode” instead of what’s doing well.

I’ve been pretty surprised at, all things considered, how well the market has held up. When you consider that most people’s 401k plans are down 50-60% since September 2008 and that many people’s homes have lost 50% or so in value....the losses that we’ve seen in many parts of the coin market aren’t looking quite that bad.

Let’s take a look at a few specific areas and see how they are holding up and what my forecast is for them in the immediate future. The first is early gold. I would have to say that the early gold market has held up far better than most other areas in the coin market. Prices are down around 10-20% for the most part but demand for early gold remains strong and many early gold coins remain quite liquid. The biggest change I’ve noticed in this area of the market is related to quality. If an early gold coin is very nice (nice enough, in this case, to have received a CAC sticker) it is a reasonably easy sale even in this market. I think this is especially true with coins in the $5,000-20,000 range. The more expensive early gold issues are harder to sell right now, even if they are very nice and/or very exotic.

One area of the early gold market that seems to be experiencing a noticeable price correction is the Capped Bust Right Heraldic Eagle ten dollar gold type. I think this is very understandable when you consider that these coins got very pricey in the past few years and that many of the ones in third-party holders are just awful.

I’d have to call the Charlotte and Dahlonega market pretty spotty right now. In their February Long Beach sale, Heritage had a massive amount of C+D gold coins and many prices were very cheap. But unless you really understand the market (and saw the coins in the sale) it is hard to make bold declarations. My take on the C+D market is that there are a lot of truly wretched coins on the market right now and the bottom feeders are either out of money or able to buy the schlock so cheaply that they are dragging prices down for the decent coins. As far as really nice (or really rare) C+D gold goes, this is an entirely different market altogether. Coins like 1855-D gold dollars or 1856-D quarter eagles in wholesome Extremely Fine and better grades are doing just fine and I’m not sure they’ve dropped in value at all since September 2008.

Proof gold is another area that has clearly dropped but I’m not really certain exactly how much. It is clear that the not interesting, bright-n-shiny pieces are off at least 20% or in some cases even more. But it is hard to figure out what really nice Proof gold is worth right now since so little of it has sold in the past six months. My guess is that a high quality, low mintage issue from the 1860’s or 1870’s would bring around 10-15% less than it might of a year ago. The areas that seem hardest hit by the current Numismatic Malaise include Matte Proofs and smaller denomination Proofs from the late 19th century.

20th century gold has been hit harder by the economic downturn than 19th century gold. Expensive coins in the Indian Head series (quarter eagles, half eagles and eagles) are clearly weak. These areas were actually slumping even before September 2008 and for a variety of reasons. The Indian Head quarter eagle series had its major market maker pull way back with purchases, causing a significant drop in demand. Better date Indian Head half eagles and eagles have always been rather thinly traded and, as been the case for as long as I can remember, by happenstance both happened to be at low ebbs in their typical up and down flow. Saints had been very active until early 2007 but the market slowed down after a number of major collectors either sold their coins or cut back on their purchases. Ironically, the generic issues in these four series have been very solid performers in this market.

Two areas that seem to be holding up rather well are New Orleans gold and Type One double eagles. These are markets that are dominated by collectors and there is almost always strong demand for the limited number of choice, interesting coins that are offered for sale. I am noting a softening in the very high end of both of these areas (i.e., issues such as 1866-S No Motto double eagles) but the low to upper-mid price range of both areas seems pretty liquid right now. Coins that are in demand right now include better date New Orleans half eagles and eagles in the EF40 to Uncirculated range, Type One Philadelphia double eagles that are priced in the $2,000-7,000 range and anything in these two areas that is “exotic.” (an example of this would be a No Motto New Orleans eagle in Uncirculated that is one of fewer than four-five known).

From my own personal experience, I am noting a resurgence of interest in the last 45-60 days. I am selling considerably more coins now than I was a few months ago. But, there is a clear difference in the market. Collectors are much more selective than they were before and expensive coins (in my case, $20,000 and above) take longer to sell than they did in the past.

I expect the next few months to be pretty quiet. There are only two significant shows between now and the Summer ANA and at least one (the Baltimore show in June) is likely to have much lower attendance than the other editions of this convention. I think prices will hold firm between now and ANA with occasional spikes up and down that are mostly related to bullion movement.

The Proof 1878 Quarter Eagle

When viewing mintage figures, most numismatists exclaim that a coin is “rare” because only 10,000 or so were produced. But this figure seems almost laughable in comparison to the mintages for Proof gold coins struck prior to 1900. In fact, many of these issues have mintages that were lower than 100 coins. Proof gold was struck for collectors every year from 1858 until 1915. From the 1850’s until the early 1880’s, mintages were incredibly low. In fact, a few issues have mintages as low as twenty coins. A number of these issues are well-known and highly prized by collectors but a few have fallen through the cracks and their true rarity remains unknown even today. One of these overlooked issues is the Proof 1878 quarter eagle.

I recently sold an NGC PR65 Ultra Cameo example of this rarity to an Eastern collector. In searching through my records I realized that this was the first Proof 1878 quarter eagle that I have handled. And the more I studied this issue, the more I realized just how rare it truly is.

With an original production figure of only 20 Proofs, the 1878 is tied with three other issues (1874, 1875 and 1877) as the lowest mintage Proof date of this denomination from 1859 onwards. The rarity of this was known by numismatists as early as the 1910’s/1920’s. As recently as 1975, David Akers wrote the following about this date:

“Proofs are extremely rare and the 1878 is, in fact, the rarest post-1859 quarter eagle in Proof. At least I know of fewer examples of this date than of any other Proof after 1859. I would estimate that only a half dozen or so remain in unimpaired condition, most of which are impounded in museums or prominent collections.”

Despite this praise from Akers, the rarity of the 1878 seems to have been forgotten by this generation of collectors and other Proofs of this type, namely the 1875, are more highly regarded.

As a rule, Proof gold of this era has a survival rate of approximately half of the original mintage. This typically holds true in the quarter eagle series but the 1878 appears to be an exception. Akers believed that some of the 1878 Proof gold coinage may have been melted after it went unsold and given the extreme rarity of all Proof gold denominations from this year, I feel that this may well be correct.

Unfortunately, the population reports for Proof 1878 quarter eagles include a number of resubmissions and this has further obfuscated the true rarity of this issue. PCGS has graded three: one example each in PR64, PR64 Deep Cameo and PR65 Deep Cameo. NGC shows ten submissions but I can all but guarantee you this number is severely inflated. These include one each in PR63, PR64 and PR65 plus four (!) in PR64 Ultra Cameo and three in PR65 Ultra Cameo.

In the last decade or so, I am aware of only two distinct examples of this date being available for sale at public auction. The most recent of these was a PCGS PR65 that was offered as Superior 8/06: 639. It brought $32,570.

My best estimate is that there are seven or eight examples known. This includes at least two that are impounded (ANS and Smithsonian). Breen wrote that “at least three” are impaired but I have never seen or heard of one of these.

As someone who has specialized in rare United States gold for over two decades, it isn’t often that I handle a coin that is so rare that it causes me to write a blog about it. But this was clearly the case with the Proof 1878 quarter eagle that I just sold. It was an exciting piece for me to handle and I greatly appreciate being able to buy and sell it.

The Proof Gold Market

For those of us who experienced the coin market’s ups and downs in the 1980’s and 1990’s, perhaps the biggest surprise has been the relatively quiet Proof gold market of the past few years. While prices for Proof gold have certainly risen since the beginning of this decade, new collectors don’t seem to regard these coins with the same degree of awe that was seen in the recent past. If you are a Proof gold collector, please do not misinterpret the introductory paragraph I just wrote. I personally love Proof gold and there is no arguing the fact that a $25,000 purchase made in this area in, say, 2001 isn’t worth considerably more today. What makes me sit back and scratch my head a little is the fact that Proof gold just doesn’t seem to be as active a market right now as early gold or key dates from the 20th century. Why?

I have a few theories. The first is the fact that a huge number of Proof gold coins quietly went off the market between 2000 to 2006 to a specific overseas buyer. Today, the supply of interesting Proof gold is the lowest I can remember. If you look at the typical major auction, there are just a few pieces of Proof gold for sale and they tend to be coins struck after 1890 and, more often than not, smaller denominations. When years go by between appearances for rare Proof gold issues, it is difficult for there to be an active two-way market which then results in a lack of pricing information or stimulus for new collectors.

This brings me to theory #2. This lack of material has meant relatively little promotion of Proof gold in the past five years or so. A dealer like me can write articles about how great Proof gold is, how rare Proof gold is and what an excellent value Proof gold is, but if I don’t have any coins available to sell to potential new collectors or investors, what’s the point? If you look back over time, various dealers were always promoting Proof gold. I think the relative lack of supply has caused marketers, retail dealers and other traditional advocates of Proof gold to search elsewhere for trophy coins to sell to new clients.

Something odd that happened in the Proof gold market was an oversupply in the late 1990’s/early 2000’s. The coin market was not especially strong back then and within a few years you had at least four huge collections of Proof gold come on the market at once (Pittman, Reed, Childs and Bass). Proof gold issues that seemed incredibly rare in 1995 all of a sudden seemed kind of common in 2002. As an example, I can remember owning no less than three Proof 1869 quarter eagles at the same time in 2002. This is an issue with an original mintage of 25 and an estimated nine or ten examples known. How was I going to convince a collector that this issue was rare when I owned three of the darn things? Needless to say, I wound-up losing money on two of them.

Another thing that hasn’t helped the Proof gold market is the lack of original coins. I think this is especially true with 20th century issues. I know that I personally pretty much quit buying coins like Proof Indian Head quarter eagles, half eagles and eagles as well as Proof Saints a few years ago because it was so incredibly hard to find coins that hadn’t either been doctored or over-conserved. And it’s often hard for me to pay $25,000, $50,000 or more for a 19th century Proof gold coin that looks like the Gallery Mint produced it last month. I can’t imagine that I’m the only dealer (or collector) who feels that way.

I think what would really give the Proof gold market the shot-in-the-arm that it needs is if a fresh, interesting collection were to come onto the market. It would be especially interesting if this were an out-of-the-woodwork collection where the coins had been bought in the 1950’s and 1960’s; before the era of dipping and conserving (and more) became so prevalent in this area.

Do you have questions or comments about Proof gold? Please feel free to contact me via email at dwn@ont.com and I would be happy to assist you in any way that I can.

Proof U.S. Gold Coins

Proof Gold Coins - Mintage Figure Variance - While it is difficult to make sweeping generalizations about the survival rate of Proof United States gold coinage, some factors exist that help to determine the rarity of many issues. It is interesting to analyze these factors and apply them to the various denominations. For the most part, Proof gold coins have small mintage figures. With the exception of some of the later date Type Three gold dollars, most issues had fewer than 100 struck and nearly all of the pre-1880 issues have mintages of 50 or less.

As a good rule of thumb, it is a safe assumption that around half of the original mintage figure for a specific issue of Proof gold is known. In other words, if the original mintage of an 1876 gold dollar is 45 coins, it is likely that 20-25 are known today.

What are the factors that exist that make a Proof gold coin more or less common than its mintage figure would suggest? These include the following:

1. External Economic Factors: During hard economic times, Proof gold coins may have been melted or spent. As an example, in the Depression of the 1930’s, Proof eagles and double eagles were spent as they were not worth a significant amount above face value. Other periods of economic hardship that saw a reduction of Proof gold populations include the Civil War and the Reconstruction Era, the Depression of 1873-1878 and the Panic(s) of 1893 and 1907. I believe that this had a very large impact on Proof gold survival rates.

2. Coin Size: This actually works both ways. As mentioned above, during tough economic times, small coins are more apt to survive than large coins. But, a coin as small as a gold dollar is more likely to be “lost” than one as large as a double eagle. Both factors certainly contribute to survival rates of Proof gold.

3. Popularity of the Denomination: Although this is more speculation than fact, I would presume that denominations that have traditionally not been popular with collectors (gold dollars and three dollars) have been more susceptible to loss than more popular denominations such as eagles and double eagles.

4. Hoarding: Certain Proof gold issues were hoarded by contemporary dealers and collectors. This tends to inflate their survival rate. The Proof gold issues most affected by contemporary hoarding include gold dollars and three dollar gold pieces from the 1880’s. It is interesting to note that mintage figures for these two denominations reached record highs during this era; this was a direct result of contemporary speculator demand. 5. Restrikes: Not all Proof gold coins are as rare as their mintage figures would indicate. As an example, PCGS and NGC have combined to grade far more 1875 and 1876 Three Dollar gold pieces than the reported original mintage figures. While the slabbed population is clearly inflated by resubmissions, many collectors are not aware of the fact that the reported original mintage figures of 20 and 45, respectively, does not take into consideration a number of Restrikes that were produced by the U.S. Mint in order to placate collector demand for these two rare issues. Other years with potential Restrikes include 1865 and 1873.

6. Mint Melting/Mint Record Errors: Certain mintage figures for Proof gold coins just seem to make no sense. As an example, the reported mintage for Proof gold dollar and three dollar gold pieces in 1861 is reported to be 349 coins; the highest figure for these two denominations until the 1880’s. It has traditionally been assumed that the Mint was way too optimistic in producing Proofs this year and most were melted at the end of 1861 when they went unsold. I personally would not be surprised if these figures actually represented an error. Another year that has a skewed mintage figure is 1859, the first year of “modernity” for United States Proof gold. The Mint struck 80 examples of all gold denominations, in anticipation of strong demand in the booming new hobby of coin collecting. This proved to be way too optimistic and the vast majority was melted. Another “problem year” is 1910 which has much higher mintages than any other Indian Head design. I believe that the published figures are in error.

Given these six factors, how do they impact the specific denominations of Proof gold coins? My experience with each denomination is as follows:

Gold Dollars: The dates from the 1850’s and 1860’s tend to be very rare in all grades. However, the survival rate of these coins is much higher than expected with the exception of the 1859-1861 dates (whose inflated mintages figures were discussed above under Factor #6). The issues from the 1870’s typically have survival rates of around 50% of the original mintage. The 1880’s Proofs are a real anomaly. From 1884 to 1889, the mintages exceeded 1,000; a huge number of coins by Proof gold standards. But the survival rate is likely between 10 and 20% for each of these. I would ascribe this to numerous coins getting melted in the lean economic years of the early to mid-1890’s.

Quarter Eagles: With the exception of the famous 1841 and 1863 issues, virtually all pre-1870 Proof quarter eagles are extremely rare and most have fewer than ten survivors. The issues from the 1870’s tend to have survival rates of around 50% while the 1880’s and 1890’s seem to be a bit more available in terms of their original mintage. The 1900’s Liberty Head issues have survival rates as high as 75%. Indian Head quarter eagles have an average survival rate of 50% (+/- 10%).

Three Dollars: The issues from the 1850’s are extremely rare in Proof and all have low mintages. The 1860’s and 1870’s issues have average survival rates of around 50% (the exceptions to this are the 1860 and 1861 which had significant meltings) and the 1875 and 1876 (see Factor #5 above). The 1880’s dates mostly have survival rates in the 50-60% range.

Four Dollars: Stellas are really a separate story in and of themselves. Many of the 1879 Flowing Hairs were saved as souvenirs (see Factor #4) and Restrikes exist. The other three issues appear to have survival rates of around 50%.

Half Eagles: With the exception of the 1864 (which had a “whopping” mintage of 50), all No Motto half eagles in Proof are exceedingly rare. The With Motto issues from the 1860’s and 1870’s typically have survival rates of well under 50%; some issues (such as the 1870, 1871, 1874 and 1878) have survival rates that are probably less than 25%. With one or two exceptions, the dates from the 1880’s have also survived with less frequency than one might assume. Most of the 1890’s and 1900’s dates have survival rates of around 50% (+/- 10%). Indian Head half eagles are scarcer on a relative basis than their quarter eagle counterparts and I’d estimate that 30-40% of the original mintage exists.

Eagles: Virtually all No Motto eagles are exceedingly rare in Proof. The With Motto Proofs from the 1860’s and the 1870’s are all very rare and most have fewer than ten survivors. I have always found the Proofs from the 1880’s to be far rarer than most people realize and many of the specific issues (1881, 1883, 1885 and 1889 to name a few) have survival rates of fewer than 25% of the original mintage. The 1890’s are slightly more available (around a third have survived) while the 1900’s dates have survival rates of around 50%. Proof Indian Head eagles, with the exception of the 1908, range from very rare to extremely rare and have typical survival rates of around 25%.

Double Eagles: Only 265 Type One Liberty Head double eagles were made in the Proof format and I would be surprised if more than three to four dozen exist. The Type Two issues are also very rare with a total mintage of only 335 Proofs. They are more available on a relative basis than their Type One counterparts and I think somewhere between a quarter and a third of the original mintage has survived. The Type Three Proofs are the most available Liberty Head double eagles but this is misleading as only a small handful of dates (primarily those dated 1900 to 1907) have survival rates that exceed 30-40%. Proof St. Gaudens double eagles are extremely rare but they have a slightly higher survival rate that one might expect. My best guess is that around one-third of the original mintage exists.