By Doug Winter - RareGoldCoins.com
You can make random purchases of early United States gold coins and, if you are lucky, you might acquire some nice pieces as time passes. But if you follow some of these suggestions and formulate a game-plan, my guess is that you will have a better grasp of what is (and what isn’t) good value in the area of United States gold produced between 1795 and 1834.
As someone who handles a bunch of early gold, I have established some personal parameters that guide nearly all of my purchases. I’d like to share them with you.
When it comes to early gold, most of my purchases revolve around the concept of value. Buy/sell spreads tend to be very tight in many early gold series. As an example, a nice mid to high range half eagle from the early 1800′s might be worth $9,500 to buy and $10,000 to sell. I am always looking for the coin of this type that is still OK to buy at $9,500 but which can be sold, fairly, for $10,500 or even $11,000.
On certain very rare early gold issues, the concept of buy/sell spreads and value get thrown out the window and “rarity” becomes the key issue. How do you figure the price of an issue of which 30 exist in all grades and only two have traded at auction in the past five or six years? I’ll answer this question and many others in the paragraphs below.
1. Buy Coins From the 18th Century. I know this seems somewhat simplistic but a 1799 eagle, while common, just seems “older” than an 1801 or 1803 (two comparable dates). The fact that it is an 18th century coin just gives it an inherent coolness factor that is lacking on most 19th century issues.
Many of the 18th century gold issues are quite rare and are out of the price range of most collectors. But there are others that are not priced at all that much more than comparable 19the century issues. This list includes the 1798 Large 8 13 Star reverse half eagle, the 1799 half eagle and, of course, the 1799 eagle. An issue that is harder to find in affordable grades but which is not extremely expensive is the 1798 quarter eagle.
2. Cherrypick Tough Varieties. Variety collecting of early gold remains in its infancy and it isn’t likely to ever approach the status of Capped Bust half dollars or early Large Cents due to the high price per coin factor.
That said, there are some very rare die varieties that can be found in the half eagle and eagle series; often times for little or no premium. I’d suggest buying a copy of the Bass-Dannreuther book and becoming familiar with the multiple varieties of coins such as 1799 half eagles and eagles or 1806 half eagles.
At this point in time, there are no real premiums for any varieties that are R-5 or lower. Coins that are R-6 are probably worth around a 5-10% premium and this seems like good value for the collector. Coins that are R-7 are currently realizing a 10-20% premium. It is possible that an R-7 early half eagle or eagle could have a 50% premium sometime in the future, although I’d suggest to the collector that he not pay this sort of premium right now.
3. Buy in the Best Value Grades: AU58 and MS62. Depending on your budget and personal preferences, AU58 and MS62 are often the best value grades in early gold.
For common dates and rarities alike, it is hard to go wrong with a lustrous slider AU58. Many early gold coins age handsomely and just a little bit of wear on the high spots seems to add character. The price levels for common date early half eagles and eagles in AU58 also makes sense. These coins often don’t sell for large premium over AU53′s and AU55′s. As an example, the current pricing for common Bust Right half eagle is around $9,500 for an AU53, $10,500 for an AU55, and $11,500 for an AU58. At a 20-25% premium over an AU53, an AU58 just seems like good value to me.
If you prefer Uncirculated coins, I suggest pieces graded MS62. In early gold, many coins in MS60 and MS61 holders are “rubby” and appear worn. MS62 coins are typically truly “new” and have good eye appeal, color and surfaces. The price differential between an MS62 Bust Right half eagle and an MS63 can be substantial; a 1799 eagle in MS62 will run you around $35,000-40,000 while an MS63 should cost $60,000-70,000. In many cases, there won’t be $30,000 worth of difference, visually, between a coin in a 62 holder and one graded MS63.
4. Don’t “Overbuy” Common Dates: If you are putting together a date run of early gold coins, it is easy to “overbuy” the common issues. I think this is a mistake.
What I mean is buying a coin like an 1806 Round Top 6 half eagle in MS65 as opposed to MS62, MS63 or even MS64. If you can find one, a Gem is going to cost you $125,000+. That doesn’t seem like great value to me.
There are exceptions. If you are collecting early gold by type, looking for one really great coin makes sense. At the recent Chicago ANA, I saw no less than three MS64 1799 eagles and they were all exceptional coins. Yes, they were expensive (ranging in price from the mid 100′s to the low 200′s) but they made sense for the collector looking for one scintillating Capped Bust Right Heraldic Eagle ten dollar gold piece.
5. Buy CAC Coins I tend to like CAC approved early gold better than non-CAC coins. CAC does a good job distinguishing original, nice early gold from average quality, processed pieces and I think the 5-15% premium that these coins sell for is more than worth it for the average collector.
In the recent Stack’s Bowers and Heritage sales, there were a lot of early gold coins, and the pieces with CAC stickers (or the ones that I thought would sticker if sent to CAC) generally brought higher prices than their sticker-less counterparts.
Good rule of thumb: unless you are extremely comfortable with your grading skills, stick with CAC approved early gold coins in most instances.
6. Look For Coins That Are Original. It is becoming harder and harder to find early gold coins, in all price ranges, that are original. In spite of this, the premiums for coins with lovely original color are not nearly as great as you might think they are.
Case in point: at the recent ANA show I sold a superb, beautifully toned 1805 half eagle in AU58 to a collector for $11,500. At the same show I wholesaled a totally unoriginal heavily processed 1803/2 for $10,500. The difference in quality between the two coins was astronomical, but at a $1,000 premium, the 1805 just seems like exceptionally good value.
As you view early gold more and more, you’ll learn that certain issues are incredibly hard to find with original color and surfaces. As an example, there are hardly any 1796 No Stars quarter eagles left with rich natural color, and an AU50 example that was untouched and original should, in theory, be worth a 25-35+% premium over a typical schlocky AU50 coin.
7. Learn the Undervalued Dates. In all three denominations of early gold, there are dates that are undervalued. The savvy collector can take the time to learn them; or he can continue to the next paragraph and let me do the work for him…
In the quarter eagle series, the dates that I feel are undervalued include the 1798, 1806/4, 1826/5, and 1833.
The early half eagles that I find to be undervalued include the 1798 Small 8, 1799 Large Reverse Stars, 1800, and 1806 Pointed 6.
I don’t think that at current levels any of the early eagles are undervalued but a case can be made that the 1797 Small Eagle and 1798 9+4 stars are both good values if you can find examples that are choice, original and priced anywhere near current published levels.
8. Buy Interesting Naked Eye Varieties. There are numerous interesting naked eye varieties in the various early gold series that do not necessarily command a premium but which have enough of a coolness factor that I think they are good value.
One that I can think of right off the back is the 1804 half eagle with a Small 8 punched over a Large 8. This variety sells for no premium over the 1804 Small 8 but if you have seen it in person, you know that it is really interesting.
Another variety that I find very interesting is the 1795 half eagle with the second S in STATES punched over a D. Its not rare but I will almost always buy one if I see it for sale because I like the variety so much.
I think that all early gold that is overdated falls into this category. While some “overdates” like the 1802/1 and 1826/5 quarter eagles have been debunked, others like the 1802/1 and 1803/2 half eagles are very impressive from a visual standpoint and carry no premium over other less interesting dates of this era.
9. Put Together Mini-Sets. If you are going to purchase a few different early gold coins, why not do a small thematic set?
The most obvious set is a three coin denominational group, including a quarter eagle, half eagle and eagle.
Or, you could do a year set. The years in which all three denominations were produced were 1796, 1797, 1798, and 1804.
A “first and last year” set would include quarter eagles dated 1796 and 1834; half eagles dated 1795 and 1834; and eagles dated 1795 and 1804.
Most people collect early gold more traditionally, choosing to either do date sets or type sets.
Collecting early gold is one of the most challenging and entertaining areas in all of American numismatics. It takes a pretty hefty checkbook to do it seriously, but collectors of average means can dabble and buy the occasional coin that is really special. Do you collect early gold? What are your “tricks of the trade?” Let me know what they are and let’s begin an early gold discussion in the comment section of this article.