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NumisMedia Monthly


NumisMedia
Monthly


Our monthly article
detailing specific areas
of numismatics for dealers,
collectors, and investors
of United States Rare Coins



May 2016

Old Gold, New Gold; Just Buy It

     Gold…..everybody wants it but not everybody can afford it. But how can you afford not to own Gold in some form in today’s economy? Whether you believe in Gold or not, it may determine your very survival over the next two decades. This is what many market analysts believe, and if you look at the current state of affairs in this country, it is obvious that we are extremely divided, over our future and who should lead our country.

     The following graph shows the yearly spot price of Gold bullion over the last six years. The high spot price was $1,895 in September 2011 (not shown on the graph). Since then it has stumbled along mostly downward and began this year under $1,100 an ounce. It is currently nearing the $1,250 mark and demand for physical Gold in all forms is on the rise, not only in the U.S. but all over the world.

Graph Gold Spot Price Six Years

     For the last year and a half there has been a lull in the rare coin market. Much of this can be attributed to the slow economy, languishing metals, and the fact that we have lost some of the many collectors who were influencing higher prices over the previous 4-5 years. It could also be that we have seen so many major auctions with hundreds of top quality rarities available in the last several years. These coins need to be absorbed into major collections, and some had been purchased by dealers in anticipation of sales to important clients. In some cases these rarities went unsold and became part of extended inventories. While major rarities have been advancing for several years, the excess of high priced rarities in today’s marketplace has created opportunities for buyers who thought they had been priced out of this market.

     Many believe that the market transition from rare coins to low premium bullion modern coins has been influencing the rare coin market over the last couple of years and that is why certain rarities have lost some of their zest or value. It is not that these coins are any less in demand; it is that there are fewer advanced buyers for rarities at the current FMV levels. Many of today’s buyers are looking to add to their holdings with low premium bullion coins, a fact that is supported by the record sales of the U.S. Mint over the last few years.

     In a previous article we listed the merits of the $5 Gold Capped Head to Left series, 1813-1829; now we will focus on the $5 Gold Capped Draped Bust, from 1807 to 1812.

     According to U.S. Mint figures, the total mintage for these dates is just 399,013; as we all know, with these early 1800’s coins, attrition plays a major factor in current availability. There are ten dates and varieties for this short series, however, two of the 1810 varieties are extremely rare. The 1810 Small Date, Small 5 has a total of just eight circulated coins certified by PCGS and NGC combined and only three coins certified in MS62 with none higher. In the most recent Pogue Sale, the only PCGS coin sold for $99,875. Pre-auction estimates listed the potential sale price as high as $150,000.

     The other rare variety is the 1810 Large Date, Small 5; there are only two graded, a VF25 and a VF30, both certified by PCGS. The VF25 recently sold in the Pogue Sale for $56,400. Since these two varieties are virtually unavailable, we will concentrate on the remaining coins from this short series.

     Below we have listed the other eight dates and varieties along with the number of coins certified in all circulated grades from G4 through AU58, the number of Mint State coins, the highest grade for the date, and the current FMV for the highest grade.

1807 $5 Gold Capped Bust Left PCGS MS67+

1807 $5 Gold Capped Bust Left PCGS MS67+ sold for $282,000 at the D. Brent Pogue Collection Part III sale hosted by Stack’s Bowers Galleries and Sotheby’s in New York, February 9, 2016

 
Date
 
Circulated
Mint
State
Highest
Grade
Current
FMV
1807 Bust Left264 278MS67$250,000
1808225180MS66$206,250
1808/75841MS65$130,000
1809/8207208MS66$162,500
1810 Small Date Tall 58085MS65$133,250
1810 Large Date Large 5225297MS66$187,500
1811216172MS66$181,250
1812200271MS66$203,130

     There are only a total of 1,475 circulated coins certified by PCGS and NGC and 1,532 total graded Mint State coins. Figuring in resubmissions these numbers would be even less. Three years ago when the market was extremely active for rarities, the combined FMV for these eight coins in MS65 was $1,007,500; today the FMV is $982,800. Now, that is not down much in the last three years, but with the high premiums of 2013, you probably could not buy these coins at the then current FMV levels. The coins were difficult to locate and the buyers were not as willing to sell. Today, you are more likely to find one of these coins and the prices should be more reasonable.

     Bear in mind the higher graded certified coins in this series are more difficult to locate because they have very low populations. The only reason that we have current price information on these rarities is because of their availability in the Pogue Collection Sales.

     Most insiders feel the market for Gold could move considerably higher over the coming years. Whether you buy low premium modern gold bullion or rare gold coins, do your homework before making purchases, make sure you are getting the best deal in the market.









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