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Widespread Demand and Returns on Early Gold
Now that the summer coin market is behind us, dealers and collectors can concentrate on a busier time of year. Not that the summer was all that slow with the metals fluctuating wildly, a number of important rarities selling at auctions, and the ANA in Chicago an overwhelming success. But many dealers use the summer months to get away from the office or the bourse floor, to vacation or just to spend time with their family. But with the kids back in school, it is time for reenergized dealers and serious collectors to get back to their pursuits and focus on the market for the rest of the year.
Early Gold is a very difficult area to collect because the entry level prices are generally very high, especially so for Mint State coins. But many high-end collectors are fascinated by Early Gold coins, not only for their beauty and history, but also for their rarity and widespread ongoing demand.
In January 1999, NumisMedia listed the Fair Market Value for the 1813 $5 Gold at $15,730 in MS63 and $21,565 in MS64. Today, the FMV is $25,310 and $52,500, respectively, both substantial gains. There are a total of only 94 coins certified by PCGS and NGC combined in MS63 and just 66 in MS64. There are just eight coins in higher grades. However, some coins are resubmitted and not removed from the population reports so the actual number of coins available in each grade can be somewhat less.
The two certification services do strive to report accurate population figures. For example, in August 2007 there were 628 coins certified by PCGS and NGC in all grades for the 1813 $5 Gold. As of today, the reports show 625 coins in all grades. There are actually three fewer coins, which might suggest that dealers turned in labels from cracked out slabs. As population reports become constant, the sense of stability in coins available usually leads to more demand and higher prices.
We selected the 1813 from the $5 Gold Capped Bust series for comparison because it is the most common with an original mintage of 95,428. The 1820 actually has a larger mintage of 263,806 but there are several varieties; and the total number of coins certified in MS63 and higher is 41 for all varieties versus the 1813 with 168 in MS63 and higher. The chart below shows the path of the 1813 $5 Gold in MS63 and MS64 since January 2006. The FMV listed is the beginning of each year with the exception of the latest value.
|1813 $5 Gold||MS63 FMV||MS64 FMV|
Since January 2006, the MS63 is up $6,870 and the MS64 increased by $21,250. Let’s compare this common date to a few better dates within the short series.
The 1823 in MS63 had an FMV of $31,850 in January 2006 and now has an FMV of $47,450. This is an increase of $15,600 for a coin with a population total of just 7 coins. The 1818 has 8 coins total certified in MS63 with only 5 grading higher. In January 2006 the FMV was $24,440 and today it is $46,880. That is an increase of over $22,000 or 91%. With advances like these for common and better date coins, it is not difficult to understand why collectors and investors migrate to Early Gold.
There are many series and individual issues in Early Gold that have displayed comparative results over the last several years. Below is a small sampling of Early Gold coins that have performed rather well during this timeframe.
|Date/Denomination||Grade||January 2006 FMV||September 2013 FMV|
|1796 $2 ½ Gold No Stars||AU50||$90,630||$125,000|
|1796 $2 ½ Gold No Stars||MS60||$168,750||$225,000|
|1805 $2 ½ Gold||MS62||$43,550||$51,350|
|1807 $2 ½ Gold||MS63||$46,150||$60,450|
|1795 $5 Gold Heraldic||MS62||$134,380||$162,500|
|1797 $5 Gold 15 Stars||AU58||$149,380||$175,000|
|1799 $5 Gold||MS63||$43,130||$69,380|
|1800 $5 Gold||MS64||$44,850||$70,850|
|1795 $10 Gold 9 Leaves||AU55||$150,000||$175,000|
|1795 $10 Gold 13 Leaves||MS63||$234,000||$318,500|
|1797 $10 Gold Heraldic||MS62||$48,750||$96,850|
|1799 $10 Gold||MS64||$63,050||$169,000|
While these coins are all rare to varying degrees, they all have populations that make these coins seem obtainable. The least likely based on population might be the 1796 $2 ½ Gold No Stars in MS60; with only two coins certified by NGC and PCGS combined, the chances of purchasing one of these may be remote. However, there are eighteen coins grading higher that could be potential acquisitions. Granted, they would cost more, but the reward may well be worth it.
Many of these coins wind up being offered in major auctions for the extensive exposure granted through maximized publicity, drawing a larger potential pool of buyers. Typically there is only one of these coins available and the competition is fierce. But there can be only one winner and all of the unsuccessful buyers are left to consider the next available rarity, knowing that they will have to be a little more competitive to acquire one of these infrequently offered gems. A majority of these buyers are well-funded and most likely will not disappear from the market.
In the meantime, other buyers become interested in some of these same coins so the pool of demand expands even greater. The past couple of years we have seen the FMV rise substantially on hundreds of early rarities, but successful buyers are a small percentage of those actually pursuing these coins. With this increasing demand and a diminishing supply available, these types of coins should continue to rise in value.
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Our monthly article detailing specific areas of numismatics for dealers, collectors, and investors of U.S. Rare Coins