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Bargain Gold: Three Denominations Offer Some Great Values
By Mike Thorne, Coins Magazine
February 01, 2012

This article was originally printed in Coins Magazine.
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As I write this near the end of 2011, the value of gold bullion has recently taken a big hit, and gold is down hundreds of dollars from its peak earlier in the year. Still, at a price slightly north of $1,600, large-denomination U.S. gold pieces are going to be expensive because of their gold content. With 0.9675 ounces of gold, a double eagle (gold $20 piece), for example, is worth more than $1,550 for its bullion content alone. An eagle (gold $10 piece) is worth at least $775.

Thus, I’m going to search for bargains in smaller-denomination U.S. gold, coins with less than $500 bullion value. I think you’ll see that it’s still possible to find low-mintage U.S. gold for amounts less than a new car payment or house note. I will note, however, that the days of inexpensive classical (pre-1933) U.S. gold are well behind us.

Gold $1

There are three types of $1 gold pieces: Type I, Liberty head within a circle of stars; Type II, Indian head; Type III, modified Indian head. All three were designed by James B. Longacre, of Indian Head cent fame. In addition, all gold $1 pieces contain 0.0484 ounces of gold, which means their bullion value is approximately $77, with gold at $1,600 an ounce. Of the three types, Type II, minted only in 1854-1856, does not contain any low-mintage bargain dates. Low-mintage examples are pricy, and the reasonably priced dates have high mintages.

One Type I date is worth considering: 1850-O. With a mintage of 14,000, the date lists for $390 in Extremely Fine-40, according to the January 2012 issue of Numismatic News “Coin Market.”

Finding one may be problematic, however, as David Bowers, writing in A Guide Book of Gold Dollars, estimates a population of 300-400 coins in all circulated grades. He prices the coin at $475 in EF-40. Suffice it to say, if you can find a certified 1850-O in this grade for less than $500, you should buy it.

There are several Type III $1 gold pieces, minted from 1856 through 1889, that seem bargain priced (although not inexpensive) given their low mintages. Again, availability may be a problem. From 1876 through the end of the series in 1889, the mintages are incredibly low, ranging from 1,636 in 1880 to 30,729 in 1889. Indeed, of the 14 different dates, only four have mintages above 10,000.

Prices for these dates in About Uncirculated-50 range from $300 to $480. Although these prices seem quite reasonable to me, finding a circulated gold dollar of this era may be difficult. As Bowers writes in his notes on the 1882 gold dollar, “Very few if any 1882 gold dollars were placed into general circulation, a commentary that is relevant for all dates of gold dollars of 1879-1889.”

Although survival of these low-mintage dates appears to be fairly high in a relative sense, most of the coins that survive are uncirculated, so the low values for circulated coins may be mostly fiction. For the 1882, Bowers estimates only 60-100 circulated specimens and calls the date in circulated condition very rare.

In Mint State-60, the 1882 and most of the other dates between 1881 and 1889 list for $460. Can you buy a coin for this price? Well, I bought an ANACS-graded MS-61 1886 (6,016 minted) about five years ago for $345 at auction. In the January “Coin Market,” the date lists for $460 in MS-60, so I suspect it hasn’t increased much in five years.

Gold $2.50

Quarter eagles, or gold $2.50 pieces, contain 0.1209 ounces of gold, which, at $1,600 an ounce, is worth approximately $193. In general, early quarter eagles (Liberty Cap, Turban Head, and Classic Head) have low mintages and high prices. It’s not until we get to the Coronet Heads (or Liberty Heads) that we find the combination we’re looking for: low mintages and relatively low values. The coins were designed by Christian Gobrecht.

Although interesting for many reasons, Indian Head quarter eagles have relatively high mintages except for the big key to the series, the 1911-D, which is quite expensive in any grade. Thus, Indian Head quarter eagles will not be considered in this article.

With a mintage of just 21,598, the Liberty Head 1847 quarter eagle, for example, is worth just $360 in EF-40. But is it available for that price? According to Walter Breen’s Complete Encyclopedia of U.S. and Colonial Coins, the date is “Very rare above XF.” I found three listed on eBay: one in ANACS-graded Very Fine-35, which had been bid up to $279 with 44 minutes to go; one with AU details but a reverse problem for $857; and one in NGC-graded AU-58 for $1,300.

Another date that looks good is the 1856-S, with a mintage of 71,120 and a list price of $425 in Extremely Fine-40. Breen calls it “Scarcer than mintage figure suggests,” which seems promising. I found only one listed on eBay, a PCGS-graded EF-45 for $950. Does an EF-45 command that high a premium over an EF-40, or is it just overpriced?

With a mintage of 47,377, the 1858 quarter eagle looks like another good possibility. It lists for $340 in EF-40 and $395 in About Uncirculated-50. Like the 1856-S, Breen considers it scarcer than its mintage would suggest.

Another of many possibilities is the 1875-S, with a mintage of just 11,600 pieces. Breen writes, “Usually VF,…very rare in higher grades.” “Coin Market” indicates it’s worth $375 in XF-40, and an ANACS-graded EF-40 specimen sold in a Heritage auction in December 2011 for $299.

With a mintage of 43,500, an ANACS-graded EF-45 1879-S sold for $322; another in the same grade and same Heritage auction brought just $299. Or what about the 1889 quarter eagle, with a mintage of just 17,648? An NGC-graded MS-62 example sold for $474.95 in a Heritage auction in late November 2011. The “Coin Market” value for this coin is $535 in MS-60.

In 1893, just 30,106 quarter eagles were minted. This date lists for $355 in EF-40, $375 in AU-50, and $400 in MS-60. Breen notes that most survivors are in uncirculated, which suggests that it might be hard to find one in EF or AU. Three sold in Heritage auctions in November and December 2011: one in ANACS-graded AU-55 for $301.30; one in PCGS-graded MS-62 for $460; and one in PCGS-graded MS-62+ for $474.95. I bought one from Heritage NGC-graded MS-62 for $472 a few years ago.

There are many more low-mintage quarter eagles of this type that have reasonably low “Coin Market” values. In fact, from 1892-1901, all of the dates have mintages less than 100,000, and many of the dates are way below this figure. From my search of the Heritage archives, several low-mintage quarter eagles in this group have been available recently and have sold for what appear to be bargain prices.

In addition to the 1893 I mentioned above, I’ve bought six low-mintage Liberty Head quarter eagles from Heritage in the past five or six years. In 2007, for example, I paid $230 for an NGC AU-58 1879, with a mintage of 88,990. I paid $472 in 2008 for an 1887 that NGC graded AU-58. This is a coin with a mintage of just 6,282 pieces, and “Coin Market” says it’s worth $500 in AU-50 and $850 in MS-60.

As an illustration of the potential of these low-mintage coins to appreciate, in 2009 I paid $661 for an NGC-graded AU-50 1868-S, with a mintage of 34,000 pieces. The current AU-50 value in “Coin Market” is $1,050.

Gold $5

The half eagle or gold $5 piece contains 0.2419 ounces of gold, which is worth $387 with gold at $1,600 an ounce. As with the quarter eagles, early half eagles (Liberty Cap, Turban Head, and Classic Head) generally have limited availability and high values. The Coronet Head or Liberty Head $5 gold pieces, designed by Christian Gobrecht, are another story, however, and are where we can find some low-mintage bargains. For the most part, Indian Head half eagles have high mintages and few bargains.

The 1857 half eagle should be a winner. With a mintage of 98,180, it’s valued at $552 in EF-40, $581 in AU-50, and $589 in MS-60. Breen says that it’s scarcer than its mintage would indicate and “very rare above AU.” Heritage sold an NGC-graded AU-55 specimen for $488.75 in November 2011.

If you can find one, the 1858 half eagle, with a mintage of just 15,136, appears to be an unrecognized bargain. “Coin Market” says it’s worth $591 in EF-40 and $750 in AU-50. Breen calls the date “Rare” and extremely rare in grades higher than EF.

Another pair of possibilities are the 1873 “closed 3” and 1873 “open 3.” With a mintage of 47,305, the former lists for $486 in EF-40 and $500 in AU-50. The “open 3” variety had a mintage of 63,200 and is worth $477 and $487 in the two grades, respectively.

With a mintage of 83,200, the 1883-S lists for $478 in EF-40 and $490 in AU-50. Heritage sold an NGC-graded AU-58 in December 2011 for $517.50. In MS-60, the date lists for $1,000.

Another possible winner is the 1891 half eagle, with a mintage of 61,413. According to “Coin Market,” it’s worth $480 in EF-40, $524 in AU-50, and $640 in MS-60. I bought one from heritage in MS-61 (NGC) in 2007 for $334. Breen calls this date extremely rare in uncirculated condition.

A final half eagle worth mentioning is the 1894-O, with a mintage of 16,600, which Breen calls scarce in circulated grades and very scarce in uncirculated. “Coin Market” says it’s worth $487 in EF-40 and $570 in AU-50. Heritage sold an ANACS-graded AU-50 for $632.50 in a December 2011 auction.

Note that I’ve just sampled the potential bargains in small-denomination U.S. gold coins in this article. There are many more dates in each denomination that might be potential winners. If you’re interested in buying any of the coins I’ve suggested or others of the same series with mintages below 100,000, I would urge you to consider only coins that have been certified by one of the major services, as overgraded “raw” coins abound on venues such as eBay.

One question worth asking about the coins I’ve mentioned in this article is why there are so many low-mintage dates that are apparently undervalued relative to their scarcity. One answer is that the series of which they are a part are typically collected by type, not by date/mintmark combination. For the type collector, the most common (high mintage) date is just as good as a date with a low mintage, with the result that low-mintage dates tend to be undervalued.

Consider the 1911-D Indian Head quarter eagle. With a mintage of 55,680 pieces, there are almost certainly more of them in existence than of the 1887 quarter eagle mentioned above, with only 6,282 minted. Yet the 1911-D (strong D) is worth multiples of the 1887 in every grade.

The difference between the two is demand. The 1911-D is the big key of a very abbreviated series (15 different date/mintmark combinations) that people tend to collect by date, whereas the 1887 is part of a very lengthy series typically collected by type.

Still, rare is rare, and I believe that the low-mintage coins I’ve suggested here will tend to increase differentially in value with time. That is, I think they will outpace their more common counterparts. Good luck in the hunt, and if you find a low-mintage coin in the series I’ve indicated for a reasonable price, jump on it. p

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Strike It Rich with Pocket Change, 2nd Edition

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