1851 $20.00 PCGS MS61

The 1851 is the second year of issue for the Type One design (not including, of course, the 1849) and while common in all circulated grades it is rare in Uncirculated, especially in MS62 or above. When this date comes nice it tends to have much better eye appeal than the 1852-1854 dates and this example clearly shows wonderful overall eye appeal. The naked-eye appearance of this coin resembles an MS63 with superb natural green-gold color and a razor-sharp strike. There are a few very fine lines in the fields that limit the grade but these are hard to see unless the coin is tilted towards a light source. I personally like this coin more than the small handful of MS62's that I've seen sell at auction in the last few years (generally in the $13,000-16,000 range) and it would fit well into even the finest set of Liberty Head double eagles.

1845-D $2.50 NGC EF40 CAC

Of the three primary denominations struck at the Dahlonega mint, the quarter eagle is probably the most difficult to locate in choice, original Extremely Fine. Despite how hard it is to find such coins, these pieces are not out of reach for most collectors and I think they are amongst the best values in the rare date gold arena. This pleasing, original EF 1845-D quarter eagle has nice medium to deep green-gold color and plenty of residual dirt in the crevesses of the obverse and reverse. There is some weakness at the central obverse due to strike and a few old nicks and marks on the obverse that are well-hidden by the natural toning. A perefect Dahlonega quarter eagle for the first time buyer who is ready to take the plunge.

The 1856-S Eagle: A Study of Mintmark Varieties

I'd like to thank collector John Toffaletti for writing this interesting study of 1856-S eagles and contributing it to raregoldcoins.com for publication. I think you'll find it very interesting and it contains information that has never been published before. There appears to be new interest in the older gold coins from the San Francisco mint. This is especially true for the double eagles, but also for the other denominations.

In searching the eagles from this period, I have noticed that the 1856-S comes in two very different mintmarks: a large S located farther to the right between the arrow feathers and the stem of the right branch and a medium S, located to the left of these same arrow feathers and the eagle’s right claw (left claw as you view the coin).

I started searching the Heritage Auction Archives for this date and mint mark and noticed that the large S was sometimes described as “very rare” because that’s how it was described in Breen’s Complete Encyclopedia of US and Colonial Coins. To me, “very rare” means a coin that is really difficult to find, so I was puzzled when the two most recent 1856-S Eagles in the Archives for April 2011 were both large S types.

Continuing to look farther down, the Archives appeared to confirm that the large S was less common among the images that I viewed: of the first 20, 14 were medium S and 6 were large S. Still, not what I would call “very rare”. However, I was really interested by now, so I continued down the list until I got to 1999, at which point Heritage did not include images in their Archives.

All told, there were 80 1856-S Eagles sold from April 1999 to April 2011, with 55 being the medium S and 25 being the large S variety. So the large S would certainly appear to be rarer by about a 2 to 1 ratio.

Now for the “double S,” as in Steam Ship. I noticed one P55 1856-S eagle had an exceptionally high price for the grade. This was a shipwreck coin from the SS Central America. In a recent article, Doug Winter mentioned that certain shipwreck coins were selling at markedly increased prices relative to their landlubber cousins. Winter noted that the greatest differential was for such coins with low “shipwreck populations”.

As an example, the very common 1857-S shipwreck double eagle sells for a small premium in the middle Uncirculated grades, while most others would sell for a significant premium. Since the large majority of coins found at shipwreck are double eagles, eagles would certainly have low shipwreck populations. Here is a list of the 1856-S shipwrecked coins on the Heritage Archive:

April 2010 N25 SS Republic $1955.00 March 2010 P55 SS Central America $7475.00 May 2008 N50 SS Republic $2990.00 June 2008 N45 SS Republic $1610.00 January 2002 P58 SS Central America $3450.00 (typical 58s sold for around $2600 at the time)

While I much prefer an original, attractively toned coin that survived actual circulation with minimal wear and damage, it is clear that these shipwrecked coins sell for a premium.

Now back to the mintmark search. Breen states that the medium S variety has at least 2 positional varieties. As I looked at the medium S eagles, I noticed that one of the medium S mintmarks really stood out. It seemed to be much lower and to the right than the other medium S’s that I had seen (but still an obvious medium S).

I saved this image and another of the more common medium S coin with the mintmark located in the upper left area. Now able to clearly compare these two images, I confirmed that the two medium S’s were located in distinctly different locations.

The more common medium S is more toward the left and tucked up between the arrow feathers and the left claw, with a line along the right tips of the S pointing almost directly through the left bar of the “N” in “TEN” [for an example, see the coin sold in the Heritage January 2011 auction, graded P58].

On the other type, the right tips of the S point almost to the middle of the same “N” and the top of the S is no higher than the lower tip of the arrow feathers [for an example see the coin sold in Heritage’s April 2008 sale, graded P40].

Also, I felt that another of the medium S marks seemed a little different than the others. Indeed, this third type of medium S variety is somewhat between the other two: the right tips of the S point down to the right of the left bar of the “N” in “TEN” and the top of the S is just above the lower tip of the arrow feathers [for an example, see the Heritage March 2010 coin graded P58 CAC. This same coin was later upgraded to an N61 and sold in the September 2010 auction by this firm].

Breen speculated that the large S eagles may have been the last of three deliveries by the San Francisco mint: Jan 1856: 14,000; Sept: 55,000; Dec 2,500. However, the relative rarity figures of the Heritage Archives do not support this.

Since the 1854-S eagle has a large S, while the 1857-S eagle has a medium S in the lower right position, this suggests that the first shipment of 14,000 were the large S variety. Most of the 55,000 shipment (from September) were the upper left medium S, while the final shipment was the lower right medium S. These numbers are congruent with the Heritage Archive numbers.

The rarest variety appears to be the medium S in the lower right position, followed by the large S, then the upper left medium S. The center medium S is relatively scarce also, perhaps about the same as the large S type.

In closing, I have to tip my hat to Walter Breen, who amassed much useful information about a huge number of coins without the grading service population reports or the great convenience of the Heritage Archives.

1880 $1.00 NGC PR66 CAC

Funny thing: as much as I dislike business strike Morgan dollars (I have basically shunned this popular series since I was a kid) I've always liked this series in Proof. In the not-so-distant past it was possible to find superbly toned Proofs of this series and I've personally owned a few pieces that had simply glorious color. But with the advent of the Ultra Cameo/Deep Cameo designation, the grading services have tacitly encouraged dealers to dip toned Morgans in the hope of getting a high grade with a spiffy adjective. That's why nearly every Proof Morgan you see these days is blast white. This "old school" Gem has superb deep multi-colored toning on the obverse and reverse with strong underlying reflectiveness. There is enough contrast seen between the portrait of Liberty and the fields to wonder why NGC didn't at least designate this as a Cameo. As a date, the 1880 is among the more available Proofs of this design and it tends to be well-made. I think Proof type of this quality remains an excellent value in today's market and this superb example would be a perfect representative of a Morgan Dollar for the collector who wants one special piece for his set.

How Much Do You Have to Pay to Play?

I get calls from potential new gold coin collectors nearly every day. Some of them have spent a good deal of time researching the gold coin market and have a good idea what the coins that they may be buying will cost. Others have no clue and are almost charmingly naive about what they can buy given their budget. This leads me to the topic of today's blog: how much does a collector realistically have to commit per coin to put together a nice collection of rare gold coins? I've stressed in numerous articles and blogs the importance of specializing when it comes to coin collecting. Collections that are all over the map tend to have "issues" (putting it nicely) and having a greater in-depth focus makes for a better, more productive collector. But a collector's chosen specialty needs to be in sync with his budget.

If a collector calls me and tells me he wants to put together a set of Indian Head eagles on a budget of $1,000-2,000 per coin, my first reaction is that he's not going to get far. Only a few coins in this series can be purchased in this price range and these tend to be either the generic issues like the 1926 and 1932 or relatively lower grade (Extremely Fine and About Uncirculated) versions of the slightly better dates.

This doesn't mean that a collector with a $1,000-2,000 budget can't play in the rare date gold coin market, there are some reasonably interesting coins available.

The collector with a $1,000-2,000 budget needs to make one immediate decision: does he care more about comparatively high grade than rarity?

If the collector with this budget is grade-oriented, there are a number of options that he can pursue.

One nice set that comes to mind are Philadelphia gold dollars struck from 1877 through 1889. This set consists of 13 coins and all of them can be found in MS63 for less than $1,500 per coin. And, if the collector in question wants to step up to MS64 examples, all the dates in this set can be found for less than $2,000.

Once this set is completed, the collector can focus on many other of the gold dollars from Philadelphia. All of the Type One issues from 1849 through 1854 can be had in MS63 for less than $1,500. And many of the Type Three issues from the mid-1850's, 1860's and early 1870's are very affordable in MS60 to MS63 grades.

If the collector on a fairly tight budget is more rarity oriented, the Liberty Head quarter eagle series offers a number of potentially interesting options. Most of the Philadelphia issues from the 1840's are scarce, and nearly all can be obtained in the lower to mid-AU grades for $1,000-1,500.

Many of the Civil War era quarter eagles--from both the Philadelphia and San Francisco mints--offer a great amount of bang for not a lot of buck. Let me pick a random example to illustrate my point. The 1867 quarter eagle has an original mintage of just 3,200 business strikes and it is likely that fewer than 125-150 are known. Yet, when available, a nice AU55 example of this date should cost $1,500-1,750.

The low mintage quarter eagles from 1880 to 1894 are intriguing. With the exception of the ultra low mintage 1881 and 1885, most of these dates can be obtained in the AU55 to MS62 for under $2,000.

There are a number of interesting half eagles that can be purchased for less than $2,000 per coin. This includes many of the No Motto Philadelphia coins in About Uncirculated and a number of the New Orleans issues as well. This includes some interesting dates, such as the 1843-O Small Letters and Large Letters, 1845-O, 1846-O and 1851-O in Extremely Fine.

Speaking of New Orleans coins, is it possible to have a budget of $1,000 to $2,000 per transaction and still purchase the popular Charlotte and Dahlonega issues? The answer is a qualified yes. I regularly handle common date C+D gold coins grading VF35 to EF45 that are priced from around $1,750 to $2,500. You aren't necessarily going to get a coin that is a candidate for beauty-prize winner at the price/grade level but you'd be surprised at the interesting lower grade issues that come available from time to time.

What about larger size coins?

At the $1,000-2,000 it is possible to buy as many as twenty to thirty different No Motto eagles in the EF40 to AU55 range. Most of these will be Philadelphia coins but there are many New Orleans eagles that can be found in EF grades for around $1,500 to $2,000.

Your dollars are going to go much further in the eagle denomination if you stick with the With Motto coins. The issues struck from 1878 to 1907 are readily available in the $1,000 to $2,000 range and you can find many of the more common dates in MS63 for $1,500-2,000. Given the fact that eagles have nearly half an ounce of gold and thus melt for around $700-800, that you can buy reasonably interesting coins for $1,000 seems like great value to me.

Since a Liberty Head double eagle has a basal value of nearly $1,500 worth of gold, your $1,000 bill isn't going to do much damage in this denomination. But if you can swing a $2,000 purchase, you'd be surprised at what you can find. Case in point: I recently sold a lovely PCGS EF45 1858-S double eagle with a CAC sticker for around $2,000. This coin isn't a great rarity but it isn't easy to find, its over 150 years old and it has a great association with the Old West.

I'm a big advocate of having a smaller collection of cool coins as opposed to a large collection of widgets. To me, the rare gold market's "sweet spot" is around $2,500 to $7,500 per coin. In this range you can start to purchase some really interesting pieces, both in terms of grade and rarity.

At this level you won't find much in the way of early gold. But you will be able to buy nice quality Classic Head quarter eagles and half eagles including some of the mintmarked coins.

There are some great values in the Charlotte and Dahlonega market in this price range. For $3,000 to $5,000 you can buy really nice half eagles in About Uncirculated from either mint and this includes some better dates from both the 1840's and the 1850's. You won't be able to buy the keys like the 1842-D Large Date or 1861-D half eagles but there are not many other dates you won't be able to afford in the price range.

Even if have around $7,500 per coin to spend, you'll probably find Proof gold to be well out of your range. But how about nice Uncirculated No Motto half eagles or eagles in the MS61 to MS62 range for around $5,000 per coin? These still exist and the quality of tends to be well superior to comparably graded C+D mint issues.

At the $5,000 price point, you can purchase some really interesting Liberty Head double eagles. Want some examples? Some of the coins that I've personally sold for five grand or so in the last 45 days include a trio of nice EF45 1851-O's, an 1855 in AU58, an 1856 in AU55, an 1864 in AU55, and an 1865 in AU58. All of these were approved by CAC, all had good eye appeal and all are "out of the ordinary" dates in above-average grades.

There is so much more to select from at the $5,000 to $7,500...the list could go on and on. Better date Three Dollar gold pieces or common dates in nice MS63 to MS64. Rare, seldom-seen San Francisco issues of all denominations. Nice common date Carson City double eagles in About Uncirculated.

New collectors are often intimidated by the better date United States gold coin market and they don't need to be. There are a tremendous amount of interesting coins out there at $7,500 or $5,000 or even $2,000.

Do you have questions about how much you have to pay to play in the rare gold market? Feel free to ask me via email at dwn@ont.com or leave your comments below.

1856-O $10.00 NGC AU53 CAC

There are four premier rarities in the New Orleans eagle series: the 1841-O, 1859-O, 1879-O and 1883-O. In the second tier, there are a small group of dates that include the 1849-O, 1852-O, 1855-O, 1856-O and 1857-O. Each of these five is scarce in AU50 to AU55, rare in properly graded AU58 and extremely rare in Uncirculated. The present 1856-O is among the most wholesome examples of this date that I have seen in some time. It is clean, well struck and superbly toned with deep rich honey-gold and greenish hues on the obverse and reverse. There have been only two examples of this date in this grade that have appeared at auction during the last two years. The first, Heritage 1/11: 7937, was in a PCGS holder and it brought $4,025. The second, ex Heritage 1/10: 4027, was slabbed by NGC and it sold for $3,738. Neither had the original appearance that this piece displays and neither was approved by CAC.

1811 Small 5 $5.00 PCGS EF45

BD-2, Rarity-3. Small 5 variety.There are two varieties of 1811 half eagles known: the Small 5 and the Tall 5. Neither brings a premium although, in my experience, the latter is a bit more scarce. As a type, the Capped Bust Left is both short-lived (it was issued from 1807 through 1812) and desirable. It is also completable, as there are no rare dates; just rare varieties. The present example shows deep mottled coppery and green-gold toning that is suggestive of having been kept in a leather storage pouch for many years. There is no remaining luster but the detail is excellent and the surfaces appear clean for the grade with just a few small marks in the left obverse. As a rule, early gold is very hard to find in grades below AU50 as it just didn't circulate enough to garner this degree of wear. many examples in the VF-EF range are damaged or have negative eye appeal and this pleasing, richly toned piece has very good eye appeal. An affordable and interesting early half eagle.

1847-C $5.00 NGC MS60 CAC

This is the second lovely Uncirculated example of this conditionally rare issue that I have handled this year; earlier, I sold an NGC MS61 with a similar appearance as part of the Logan's Landing Collection. When you hear the grade "MS60" you typically think of a coin that is riddled with marks or which is characterized by some sort of flaw. This MS60 1847-C half eagle is fully original with attractive deep green-gold color that changes to subtle coppery-red hues in the fields when the coin is tilted towards a light source. The strike is razor sharp and the surfaces are extremely clean with just a few small, unobtrusive marks on the cheek and in the left obverse field; the reverse is clean, choice and would grade at least MS62 on its own. This is one of fewer than a dozen known examples in Uncirculated and it is certainly one of just a tiny handful that are totally original.

Why the Rare Coin Market Isn't the Art Market

As much as coin dealers--myself included--try to compare the coin market to the art market, the more you look at coins, the more you realize how insignificant this market (currently) is when compared to art. Will the coin market ever "catch up" to the art market and is it fair to make any coin vs. art comparisons? I'd like to share my thoughts on this with you. If you look at art from an outsider's perspective, the prices that great objects bring seem baffling. $50 million dollar Warhols? $100 million Giacometti sculptures? And what seems all the more baffling are that prices like this are for items that not everybody agrees is a masterpiece.

But examine the art market with a little bit more perspective and the prices that make coin dealers exclaim that MS64 Indian Head half eagles at $3,500 are a smoking value seem less relevant.

The market for seven, eight and even nine figure art objects is extensive and it is world-wide. If a Vermeer painting was discovered and authenticated, there would be a deep pool of buyers waiting to purchase it; even if the final price realized at auction was in excess of $200 million. Compare this to a famous rare coin like a 1913 Nickel or an 1804 Dollar. Sure, these are famous and desirable coins and an example of either would bring $5 to $10 million in the right market conditions. But the number of buyers who would be competing for these classic rarities is probably less than ten; maybe even as few as five.

The lack of depth in the coin market is even more apparent in thinly traded areas like Territorial gold or Patterns. A coin can be extremely rare and there might only be three examples known. But if there are only two strong buyers for that issue and both already have the coin, the thinness of the market is detrimental. This tends not to be the case in the art market which is deeper and which has institutional buyers as well.

There are hundreds of art museums in the Western world and a small but significant number of these have the money available at most times to buy great art that fits into their collection. Sadly, the Mint Museum in Charlotte has no budget (or desire) to purchase a great Charlotte quarter eagle if it becomes available. The Getty Museum, on the other hand, has been a major buyer of antiquities and photography for years and has helped to push values upwards in those areas.

The art world does a wonderful job of cultivating new buyers. In addition to museums there are active art scenes in cities like New York, London, Berlin and Los Angeles that have beautiful, high-end galleries where collectors (or potential collectors) can go to learn about new art, view exhibits and socialize with other collectors. The number of high-end coin stores in the United States is next to none, and I somehow can't imagine hedge-fund directors in New York or trust-fund kids in London spending Saturday mornings chatting with the proprietor of the local coin shop.

While I personally love rare coins and I do think the market has come a long way in the past decade or two, it still has a long, long way to go as far as self-promotion goes. Art shows are much more upscale than coin shows, and gallery exhibits introduce new works to collectors or reinforce the greatness of existing masters. When's the last time you went to your local museum to see a coin exhibit?

The rare coin market has become increasingly internet-driven and I think that's a great thing; I know that it has certainly helped my business immeasurably. But the personal interaction between dealers and collectors in the art world remains more sophisticated and "better" than in the coin world and I think the art world is healthier for this.

Another thing to remember about the art market is that it is far more international and cosmopolitan the the coin market. When a great French Impressionist painting is offered at auction, it is possible that the winning bidder might be American, British, French, German, Swiss, Russian, or even Chinese. When a great Liberty Head half eagle is made available, the chances remain very strong that it is going to sell to an American buyer.

Buying art serves an important social function that doesn't yet (and may never) apply to coins. When a billionaire Russian oligarch wants to makes a splash in the West, he does three things: buys an English Premier League soccer team, purchases a great apartment in New York, and makes a splash at the season's Christie's and Sotheby's Contemporary and Modern Art sale.

Coins are not on the radar of many big money buyers because they are too small to display and you can't impress your friends by laying out a PCGS box full of Gem rare date Saints.

But I think that the transportability and compactness of coins may ultimately appeal to big money buyers. Its a lot easier to move your coins from New York to London to Dubai than it is your art collection. As the world becomes a more complex, dangerous place the ability to quickly transport significant amounts of personal wealth gains in importance.

Would the rare coin market have a sudden transformation if coins, as a category, were suddenly included in Sotheby's and Christie's roster of sales? Probably not. There are not enough expensive coins around to keep these two firms interested in maintaining departments and both firms don't appear to want to fool with art objects that are worth much less than $25,000-50,000 and up. And even when Sotheby's and Christie's had coin departments, their sales were primarily attended by American dealers.

If anyone is going to take the coin market to an international audience, it's Heritage and I would assume that selling coins to Chinese industrialists is on their radar. And let's not forget that both PCGS and NGC have overseas offices and are focusing considerable time, energy and marketing dollars on appealing to foreign collectors and dealers.

For the United States coin market to become more like the art market, I think a few things need to happen. Some of these are possible, some are already happening, and others seem more like a pipe-dream.

1. There needs to be more and better high-quality general numismatic reference books. We are in a golden age of numismatic research but most of the books published appeal to a narrow range of specialists. We need more books like "The 100 Greatest U.S. Coins." A superb quality coffee table book on United States gold coins, for example, would be a great way to get more high net worth individuals interested in coins.

2. There needs to be a few upscale coin stores in New York. Manhattan remains the financial and social capital of the world and it is filled with superb art galleries. But there is no place a hedge fund manager can go and look at great coins for sale in comfort and privacy. Heritage has launched a New York office and Stack's-Bowers will become more retail friendly (I assume), but there is still a huge void in New York.

3. The Smithsonian collection needs to reopen and there need to be touring exhibits of great American coins at locations more accessible than coin shows. There are hundreds of places in the United States to view great American art. There are only a handful of institutional collections available to view in this country.

4. There needs to be at least one or two upmarket coin shows in New York every year. Captains of Industry aren't going to fly to Rosemont or Long Beach to go to shows. I doubt if an Armory-style show for coins would work but I'd be curious to see what happened if a coin dealer were allowed to exhibit at a fancy east coast art and antiques show.

5. The coin market needs to think with a long-term perspective. Dealers need to be thinking about the market in 2021 and 2031, not just in 2011. Coin doctoring is bad for the long-term health of the rare coin market just like scandals in the art market can hurt that industry in the long run. In a good market, coin dealers are too busy to promote numismatics and in a down market, they are too poor. There are times I wish there was a Benevolent Dictator in the coin business who told us dealers what to do and how to do it.

6. The professional side of the coin business desperately needs an infusion of fresh young faces. The art market has the advantage of hundreds--if not thousands--of smart, enthusiastic Art History majors who enter the market each year from college. The coin market has a lot of the same faces who have been around for two, three, and even four decades.

That said, I still like the future of the rare coin market. I think there is real value in selected areas of American numismatics. The relative affordability of Classic American Rarities is a compelling factor for wealthy collectors used to seeing average quality artwork priced in the millions of dollars. And the fact that the $5 Indian in MS64 that I mentioned above is within the price range of most upper middle-class Americans means that coins have the potential for much more widespread appeal than great (or even good) art.

What are your thoughts about the coin market versus the art market? Leave your comments about this below.