The State of the Liberty Head Double Eagle Market: 2011

The level of popularity for the Liberty Head double eagle series, struck between 1850 and 1907, shows no signs of abating. In fact, I think these are the most avidly collected United States gold coins by date. How has the market fared for $20 Libs. in the last three to five years and what does the future portend? Let's take a look at the State of the Market for Liberty Head double eagles. 1. The Impact of Bullion Prices on $20 Libs

At the end of May 2006, the price of gold stood at around $660 per ounce. Five years later, gold hovered near $1,530 and it had reached a high of over $1,600 earlier in the Spring. Obviously, this huge increase has had an impact on the market for twenty dollar gold pieces.

In May 2006, a generic Liberty Head double eagle in MS63 would have cost a collector around $900. Today, the same coin costs around $1800-1900. The first thing that is noticeable from this is that the value of a generic double eagle relative to its gold content has dropped appreciably. In fact, the spread between the spot price and the numismatic value is as low, in May 2011, as I can recall.

While generic prices have dropped, the demand for scarce and rare collector-oriented Liberty Head double eagles has increased considerably. Let's take a look at two examples.

In May 2006, an AU55 example of the popular 1850 double eagle would have cost a collector somewhere in the area of $3,000-3,500. Today, the same coin typically sells for $5,500-6,000. This is interesting as this is one of the few areas in the numismatic market where a rare coin (the 1850) has actually performed as well as the generic issue since 2006.

Let's also look at a common date Carson City issue. In May 2006, an AU58 example of an 1875-CC was likely to sell in the $2,500-2,750 range. Today, the same coin will bring $4,000-4,500. From an investment standpoint, the $20 Liberty Head market has performed well in the past five years. But this is not a blanket statement and certain areas have done better than others. We will explore these later in this article.

2. What's Popular in this Market in 2011?

As someone who buys and sells hundreds of Liberty Head double eagles each month, I have a good feel for what's popular and what's not. In my observation, I can see a strong level of demand in certain areas. These include nearly all Type One issues in the $2,000-5,000 range, most affordable Carson City double eagles, very scarce and rare dates in all three types, shipwreck coins (more on these later), and coins with exceptional eye appeal. If I had to name some of the specific dates that seem to be in particularly strong demand right now, I'd include the following: 1854-S, 1856, 1859, 1862, 1863, 1868, and 1880.

Areas in the market that seem weak include generics, grade rarities (an example of this would be a coin like an 1888-S in MS64 which is a fairly common date in grades up to and including MS63 but a "rare" and expensive one in grades above this), rarities that showed huge price increases in the middle of the last decade, and coins that have poor overall eye appeal.

3. The Market For Rare Date Liberty Head Double Eagles

The top end of the Liberty Head double eagle market showed incredible strength during the 2000's. Let's look at a few examples.

The 1866-S No Motto was an issue that was considered esoteric 10-15 years ago and I can remember literally begging clients of mine to buy nice EF and AU examples as they seemed incredibly undervalued to me at the time. This issue caught fire and prices soared. In the early part of the 2000's, an AU50 1866-S No Motto double eagle could be purchased for $8,000-10,000. By 2007-2008, the same date in this grade would have realized $40,000+ at auction; and probably would have been far less attractive, for the grade, as the example(s) available in 2000. Today, this same coin is worth in the low to mid-30's.

Possibly the most dramatic price swings in the $20 Lib. series have been for the major rarities like the 1854-O, 1856-O, 1861-S Paquet, and the 1870-CC. These coins became very expensive by the 2006-2008 boom years and, quite frankly, they became priced out of range of all but the wealthiest collectors and investors. These four issues have seen drops of 20-30% since their market highs, but I am noticing that they are starting to percolate once again and prices are raising. I think that buyers of these very rare issues are far more particular than they were five years ago and if a coin that is priced at $250,000 and up doesn't have good eye appeal it will prove to be a hard sell.

4. The Strength of the Market in Cool "One of a Kinds"

While the classic rarities in the Liberty Head double eagle series have taken a bit of a hit lately, the upper end of the market is far from weak. In fact, the market for really cool, really nice condition rarities is exceptionally strong and deep. Usually, coins of this sort wind-up at auction. I can think of a number of these; for the sake of brevity let's look at two.

In the recent Heritage Central States sale (April 2011) there was a gorgeous PCGS MS63 CAC 1869 double eagle. The coin had great color and surfaces and was fresh, choice and high end. Its a population four coin with two graded higher at PCGS and it was the second best I'd ever seen. Trends at the time was $28,500 and I expected this coin to bring in the low to mid-30's. It sold for $45,885. A great coin, yes, but a really robust price especially considering that Type Two double eagles are somewhat out-of-favor with collectors right now.

Another interesting "one of a kind" coin was the NGC MS65 1852-O that was sold as lot 5243 in the Heritage 2011 FUN sale in January. While I wasn't absolutely crazy about this coin from a quality standpoint (I graded it MS64 but didn't think it was a Gem) there was no denying it was a special coin for an O mint double eagle. And the fact that it remains the only New Orleans double eagle of any date meant that it was destined to bring a strong price. It sold for $276,000; not "crazy" money but still a heckuva lot for a common date New Orleans double eagle!

What's interesting to note right now is that any double eagle that is either finest known or well up in the Condition Census is destined to sell for a record price while some of the more classic rarities in the Liberty Head series might still be a bit soft.

5. Shipwreck Coins

No denomination of United States gold coinage has been more affected by shipwrecks/hoards than double eagles. The S.S. Brother Jonathan, S.S. Central America, and S.S. Republic hoards have added thousands of interesting Type One double eagles into the market.

For many years the supply of these coins far outstripped the demand. You couldn't wander through a coin show without tripping over a stack of 1857-S double eagles. (OK, a slight exaggeration but...)

As double eagles became more popular, the appeal of the shipwreck coins grew. There are now a number of retailers who actively sell these and the trend appears to be strongest for dates that have low "shipwreck populations."

Here's an example. Let's say you have an 1851 double eagle in AU58 from the S.S. Republic shipwreck. This coin could bring as much as $5,000 if it were put in an auction. The exact same coin without a shipwreck pedigree might bring $3,000 if it were extremely high end; $2,750 or so if it were just "average."

The shipwreck double eagles that seem to be in the greatest demand are the ones that appear infrequently. In other words, if you have a double eagle from the S.S. Central America that isn't a commonly seen issue (i.e., its not an 1857-S) then it is considered "scarce" by shipwreck collectors.

The entire shipwreck double eagle phenomenon is sort of a mixed blessing to me. I like the fact that these coins attract new collectors and I respect their history and pedigree. But I think many are cosmetically unappealing and I have a hard time justifying the premium that some of these coins are getting. Is a $3,000 double eagle worth $5,000 (or more) because its from a shipwreck? To me, no. But to a number of collectors the answer is clearly yes.

6. Tracking the Market by The 1856-O Specimen

Many collectors feel that the single most desirable Liberty Head double eagle is the unique Specimen-63 example of the 1856-O. The coin first surfaced in the late 1970's/early 1980's and it has bounced around quite a bit more than you'd think.

In Heritage 2002 FUN sale, the coin sold for $345,000. The owner held it for two years and then placed it in the Heritage June 2004 sale where it brought $542,800. It was purchased by an investor who, as I recall, had never purchased another Liberty Head double eagle before and he held it for five years, placing it in the Heritage May 2009 sale where it brought a record-smashing $1,437,500.

In just seven years, the price of this special coin has increased by nearly 5x. Given the fact that there are now numerous United States coins that have brought over $1 million at auction or via private treaty, I am not surprised at the value level of the 1856-O. I would have to think that if it appeared for sale again in the near future it would bring over $2 million.

7. Tracking the Middle Market

This article has been more focused on the upper end of the market than the lower and middle end and this is not representative of the $20 Lib market as there are a lot more transactions in the $2,500-5,000 range than in the rarefied air of six figure coins.

I make a strong two way market in Type One and Carson City double eagles in the $2,000-10,000 range and I find this area of the market to be quite strong. I have a few interesting observations to share.

I find the grading of these coins to generally be more consistent than on smaller denomination coins. That said, I still find inconsistencies. I love lustrous, unmarked "sliders" graded AU58, but see coins in 58 holders that range from terrific to terrible. In my experience, really nice AU58 coins with great eye appeal are now bringing at least 10-15% more than average quality coins and I think that this spread will increase in the future.

In the Type One series, there are certain dates that I literally couldn't keep in stock even if I had multiple examples. Collectors love the Civil War dates and the underrated Philadelphia issues from 1854 through 1859 have become very popular as well.

Carson City issues are collected both by date and as type coins. I find that the key issues like the 1878-CC, 1879-CC, 1885-CC, and 1891-CC are very popular in circulated grades and in Uncirculated as well. The more common dates (priced in the $2,500-5,000 range) are extremely easy for me to sell as long as they are attractive, lustrous coins with fewer-than-average bagmarks. Coins with CAC stickers are especially in demand amongst type collectors or collectors who, while not working on date sets, want to buy groups of four, five, or six different pieces to salt away.

8. In Conclusion: What does the Future Hold?

I think the future for collector-quality Liberty Head double eagles is as bright as for any other type of United States gold coin.

As gold continues to go up in value, more investors become aware of gold coins. For various reasons, more wind-up buying double eagles than any other type of numismatic "product" and due to good marketing, more of these will be steered toward Libs than towards Saints.

The beauty of the 20 Lib series is that, marketing aside, the coins themselves are very interesting. They were issued at a tumultuous time in US history and at significant mints such as Carson City, New Orleans, and San Francisco. And they come in a tremendous array of prices; you can buy $2,000 coins or you can buy $200,000 coins.

I think the more affordable $20 Libs have a really bright future; coins in the $2,000-5,000 range that are interesting, reasonably scarce and which contain nearly an ounce of gold are just about irresistible to collectors. The super high end coins will continue to shine as well; coins priced at $50,000 and up that are very rare or that represent the highest available quality for a specific issue.

The real question is what about the middle market? I could sell as many 1859-O double eagles as I could find in choice VF and EF grades and I'm sure I could sell the first, second, and third finest known(s) of this date. But what about the so-so quality AU50 and AU53 coins? How will those fare in the future? Check back in 2014 when I update this article and we'll see!

Carson City Double Eagles: An Introduction and Overview

Carson City twenty dollar gold pieces, or double eagles, are the most available gold coins from this mint. Only one date in the series, the 1870-CC, can be called truly rare, although a number of other dates are very rare in high grades. Amassing a complete collection with an example of each date is an enjoyable pursuit. And if you decide not to include the 1870-CC because of its prohibitive cost, don’t despair; many collections do not include this date. A collector of average means can put together a nice set of Carson City double eagles with the average coins in the Extremely Fine and About Uncirculated range. The collector will soon learn that only the 1870-CC presents a great challenge in terms of availability. There are an estimated 40-50 examples known in all grades. This means that no more than four dozen or so complete collections of Carson City double eagles could possibly exist. In comparison, the maximum number of Carson City half eagles that could exist is around five dozen while around three dozen (or a few more) eagle sets from this mint might be formed. In each series, the 1870-CC is clearly the “stopper” or key date.

The completion of an average quality Carson City double eagle set is somewhat easier than a comparable half eagle or eagle set, provided that the collector is willing to accept coins that do not grade Mint State-60 or better. There are just 19 dates required to form a complete set. Carson City double eagles are without a doubt among the most popular United States gold coins. Their large size, combined with their romantic history, makes them irresistible to many collectors. This fervent collector base is most evident when one examines the great popularity of the 1870-CC. This issue has increased dramatically in price and popularity since the last edition of my Carson City gold coins book was published in 2001. As this is being written (2010) there are a few examples actually available to collectors but a few years back it was nearly impossible to locate an 1870-CC double eagle at any price.

As with the other Carson City gold series, it is very challenging to pursue the double eagles in higher grades; in this case About Uncirculated-55 and higher. It becomes even more of a challenge when the collector demands clean, original coins with a minimum of bagmarks and abrasions. As a rule, CC double eagles are less rare in high grades than their half eagle and eagle counterparts (at least the issues from the 1870’s and 1880’s). This means that locating really choice coins is not as difficult as with the half eagles and eagles from the first decade of this mint’s operation.

More than most other Liberty Head double eagles, the Carson City issues have tended to remain popular and increase in value over the course of time; regardless of their bullion value. One of the major reasons for this has to do with the great story behind these coins. CC double eagles are reasonably easy to promote due to their relative availability (especially in lower grades) and their wonderful history. These coins have long proven easy to sell to non-collectors and pure investors. Interestingly, the Japanese were major buyers of Carson City double eagles in the past and this is due to their interest in the legends and history of the Old West. I am aware of several American dealers who sold a number of Carson City double eagles to the Japanese and other Asians.

At the present time it remains impossible to assemble a complete set of Uncirculated Carson City double eagles. At least one of the nineteen dates is unknown in Uncirculated. However, more dates in the double eagle series exist in full Mint State than in the half eagle and eagle series, both of which contain a number of issues that are either unknown or excessively rare in Mint State.

The 1870-CC is unknown above the AU53 to AU55 range while the 1871-CC and 1872-CC has just three to five and five to six, respectively. The 1878-CC and 1879-CC are extremely rare in Uncirculated as well with fewer than ten pieces believed to exist. The 1873-CC and 1891-CC are very rare in Uncirculated and almost unobtainable above the MS60 to MS61 range. The 11874-CC, 1877-CC and 1885-CC are considered to be quite rare in full Uncirculated as well. Conversely, a few Carson City double eagles are very plentiful in Uncirculated. These dates include the 1875-CC, 1890-CC and 1893-CC of which hundreds are known in the MS60 to MS62 range. It should be stressed that well over 90% of all Uncirculated Carson City double eagles are in the MS60 to MS62 range and any date in extremely rare and desirable in properly graded MS63 or above. I have still never seen or heard of a Gem and have only seen one piece (an 1875-CC) that I regarded as being close to MS64.

High grade Carson City double eagles are in very high demand by date collectors and type collectors. I doubt if there are as many as twenty Carson City double eagles that are true MS63 coins by today’s standards. CC double eagles are essentially unknown in high grades because of the rough way in which they were handled and if a Gem is to ever show up it is likely to be an Assay coin or a piece that was given special treatment by a VIP or prominent local family.

There was probably not a single coin collector alive in Nevada at the time these coins were produced. The few MS63 to MS64 coins that do exist were preserved by good fortune or sheer happenstance. Many were stored in the vaults of European, Central American and South American banks after they had been shipped there as payment for international debts. While stored in these banks they were protected from the American gold recall of 1933 and the wholesale meltings that took place during this period. Many of these coins have worked their way back to America since the 1960’s as their numismatic value increased. Despite the fact that literally thousands have been repatriated, more Carson City double eagles are still being found in Europe, Central America and South America.

An examination of the series reveals some interesting rarity trends. Survival statistics depend, to some extent, on the original mintage figures. But they vary widely according to the year of issue.

The rarity trends for CC double eagles do not break down as neatly as they do for the half eagles and eagles from this mint. Unlike these two other denominations, the double eagles do not always get characterized as “rare early dates” and “common late dates.” One of the rarest double eagles is the low mintage 1891-CC while the most common is the 1875-CC. After studying the half eagles and eagles from this mint, I feel that the rarity of the Carson City double eagles are based less on mintages and actual use than on mintage values and subsequent shipment overseas. The collector who studies the rarity tables that I included in my 2001 book on CC gold will note the following very general trend: the lower a coin’s mintage and the older its date, the rarer it tends to be in terms of pieces known today.

The 1870-CC double eagle had the lowest mintage figure of any Carson City double eagle: a scant 3,789 coins. In the entire 57 coin Carson City gold series, only the mintages of the 1877-CC, 1878-CC and 1879-CC eagles were lower. As with the other 1870-CC gold issues, the comparably high survival rate of the double eagle (on a percentage basis) is most probably due to a few pieces being saved as first-year-of-issue keepsakes. The fact that no AU-55 or better specimens exist implies that these coins went directly into circulation and saw active use.

The next rarest dates are the 1871-CC and the 1891-CC. The 1871-CC is rare due to a low original mintage figure (just 17,387 coins) and the fact that this issue saw active commercial use. The 1891-CC is rare more because of the fact that only 5,000 were produced. It is also interesting to note that the similarly dated half eagle and eagle are extremely common by the standards of Carson City gold and can be found with no difficult even in the lower Uncirculated grades.

The next rarest issues are the 1885-CC, 1879-CC and 1878-CC. All three have low mintages and tend not to be found in groups of CC double eagles located in overseas sources.

The 1875-CC, 1876-CC, 1884-CC, 1892-CC and 1893-CC appear to have been saved and then shipped overseas. A decent number of these coins are still being brought back to the United States, including examples in the lower Uncirculated grades. The 1892-CC and 1893-CC, in particular, are less rare in Uncirculated than their comparatively low mintages would suggest.

As with other gold denominations, a general rule is that the older a coin is, the lower the average grade of surviving specimens. This intuitive statement is not nearly as easy to predict in the double eagle denomination. As an example, the 1872-CC is the third rarest Carson City double eagle when it comes to high grade rarity but it is only the eighth rarest in terms of overall rarity. This suggests that this coin was released into circulation and used in commerce; not stored in banks and shipped overseas like the 1892-CC and 1893-CC.

Carson City double eagles served two primary functions. They were meant to circulate but they were also meant as a storehouse of value. The large $20 denomination was the most convenient form in which to coin, transport and trade the large quantities of gold that had recently been mined in Nevada. During the western gold rushes, paper money was viewed with suspicion. This made gold coins an important factor in daily commerce, which quickly became the accepted mode of payment in the Old West. Thus, it is not surprising to learn that Carson City double eagles can be found in comparatively low grades today. These low grade coins (Very Fine and Extremely Fine) are often heavily abraded from years of use in commerce. Conversely, most of the known Uncirculated coins are also heavily marked, the result of loose coins striking against each other while being transported in bags. It is not uncommon to see CC double eagles with no real wear but with such extensive abrasions that they are downgraded in the commercial marketplace to About Uncirculated.

The greatest challenge for the collector of these coins is not finding specific dates but, rather, locating clean problem-free coins. As mentioned above, the typical Carson City double eagle, whether it grades Very Fine-30 or Mint State-61, tends to have negative eye appeal due to excessive marks, scuffing or mint-made spotting. Coins which have truly good eye appeal are quite rare and deserve to sell for a strong premium over average quality specimens. The collector is always urged to “stretch” for exceptional pieces with high quality eye appeal.

Most of the pieces struck from 1870 through 1875 are not sharply impressed. This is most evident in the central portion of the coin where the greatest amount of pressure is needed to raise the metal of the planchet and bring out the details. On the obverse, the weakest area is usually on the hair. On the reverse, this weakness is most often seen on the neck feathers of the eagle, the radial lines in the shield and on E PLURIBUS in the motto. This weakness of strike is often confused with wear. Still, Carson City double eagles of this era tend to be sharper (and easier to grade) than their half eagle and eagle counterparts.

The survival estimates in my new book are based on information current as of 2010. Since the last edition of the book in 2001, a number of new coins have surfaced. This has included some reasonably significant hoards. Populations for Uncirculated have increased due to relaxed grading standards. Some coins that I considered to be About Uncirculated in 2001 and now Mint State.

Due to the sheer number of Carson City half eagles that exist, I have always found it difficult to estimate surviving populations; especially with the more common issues. I anticipate that my current overall population figures will prove to be conservative, just as they were in 2001 (and in 1994 when I wrote the very first Carson City gold book).

To reach these conclusions, I study auction data, population reports, dealer ads and websites as well as my own personal records of sale. In an average year, the number of 1870-CC double eagles might be as low as one or two coins. For other dates, such as the 1871-CC and 1891-CC, the number might be around one per month; possibly less. Obviously, the rarer the date and the higher the grade desired, the harder it will be for the collector to locate an acceptable example. Finest known or Condition Census examples may stay in specific collections for many decades.

As I mentioned earlier, the collector with a budget can form a complete (or near-complete) set of CC double eagles excluding the 1870-CC in the VF and EF grades. A number of the dates in the series can still be found in lower grades for less than $2,500 per coin and they would appear to have very little downside risk at these levels.

The collector with a larger budget is likely to focus on coins grading AU50 and above. With the exception of the 1870-CC, no Carson City double eagle is prohibitively expensive or unobtainable in this range. Such a set could probably be assembled in two years or less.

A connoisseur with a large budget will focus on coin that grade About Uncirculated and Uncirculated. For the 1870-CC, a coin grading EF45 to AU50 will prove satisfactory. The collector of such coins should focus on pieces with minimal marks and original color. Since many of the early issues are so rare in full Mint State, finding even properly graded AU55 to AU58 pieces is very difficult. Given normal market conditions, a collection of this magnitude might be assembled in three to five years.

An even more impressive collection would be one in which all the coins except the 1870-CC were MS60 or finer. Such a collection might take decades to assemble.

Collecting Carson City double eagles is a very enjoyable pursuit and the number of serious collectors currently working on sets will attest to this.