Should You Buy Very Rare US Gold Coins in Low(er) Grades?

By Doug Winter – RareGoldCoins.com
CoinWeek Content Partner ………

As recently as a few years ago, if you asked me “should I buy very rare United States gold coins in low(er) grades” I would have resoundingly answered “no!”  But, as with so many things in life, perspectives change and my answer to this question has as well.

A piece of advice I had often given new collectors is that you shouldn’t buy US gold coins that grade lower than EF40. That is still a cut-off grade for me and, for many issues, I still recommend sticking with EF and finer coins. But I now will sometimes buy certain very rare issues in grades as low as Good to Very Good. What exactly made me change my mind?

1870 cc 5 vg10 Should You Buy Very Rare US Gold Coins in Low(er) Grades?I came to a conclusion a few years ago that just because someone doesn’t have a $5,000 or $10,000 per coin budget doesn’t mean that they don’t appreciate truly rare coins. Nor should they be shut out from the potential of buying a few coins, now and then, that can be genuinely tagged as “rare” or even “very rare.” I’m a coin snob who is trying to become more inclusive, I guess…

A few coins that I recently sold on my website raregoldcoins.com illustrate this belief. In the past two months, I handled a pair of 1870-CC half eagles, graded Good 6; one encapsulated by PCGS and the other by NGC. These were coins that I probably wouldn’t have bought a few years ago but the New Doug Winter bought them and was pleasantly surprised at how quickly they sold; not to mention how much attention they generated.

Here’s my way of thinking about a coin like an 1870-CC half eagle in very low grades. This is an issue with strong Multiple Levels of Demand. It is rare in all grades, it is the rarest half eagle from this mint, it is a first year of issue and it is the only quasi-affordable gold coin dated 1870-CC. In other words, it is a coin that’s “got it all.” But it is very expensive in EF and AU grades and not every collector who is sophisticated enough to want one can plunk down the $25,000-50,000+ it takes to buy a nice one.

So what’s wrong with a well-worn but very problem-free example of this date in a Good 6 holder? Actually nothing; a fact that was lost on me until recently.

When you think about it, a Good 6 1870-CC half eagle is a pretty darn cool coin; certainly one of those “if it could only talk imagine the stories it could tell” kind of coins and probably more so, in some ways, than the same date in EF45 or AU50.

By the same token, I don’t automatically think every CC half eagle from the early 1870′s in lower grades is a cool coin. In fact, the chances are good that if I were offered a decent quality 1872-CC half eagle in Good or Very Good I would pass. Why? It is clearly a rare coin but it doesn’t have nearly the cool factor that the 1870-CC not does it have the strong multiple level of demand. My grade cut-off for the 1872-CC half eagle is more like EF40.

What are some of the parameters that I would employ when choosing to purchase a very rare coin in low(er) grades?

First, just as with a very rare coin in higher grades, I would avoid any piece which has been harshly cleaned or which has poor eye appeal. A coin in Good 6 doesn’t necessarily have to be CAC-quality but make sure it has reasonably good overall eye appeal.

Second, I would look for coins which are not only very rare but whose high price point in higher grades eliminates a large pool of potential buyers. As an example, I recently sold a VG8 example of the very rare 1865-S/186 Inverted Date eagle. Not only was it a decent looking coin, it was priced at less than $3,000 which is tons cheaper than the next semi-available grade point (VF/EF) for this issue. From an economic standpoint, this coin made a lot of sense to me.

Third, I wouldn’t go overboard with buying very low grade gold coins. In other words, you don’t want a collection which features nothing but coins like 1870-CC half eagles in Good 6. A few coins like this are cool pieces to sprinkle in your set. A lot of coins like this are, well, a collection of very low grade coins…

Fourth and final, my sudden admiration for lower grade coins is, as I’ve tried to make clear, highly selective. Remember: 1870-CC half eagle in Good 6, si….  1872-CC half eagle in Very Good 8, non…..

For more information on how to put together a great collection of United States gold coins, with or without very rare coins in low(er) grades, please feel free to contact me by email at dwn@ont.com.

About the Author:

Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was ten years old, buying and selling coins at conventions in the New York City area. Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. If you are interested in buying or selling classic US coins or if you would like to have the world’s leading expert work with you assembling a set of coins? Contact Doug Winter at (214) 675-9897 or by email at dwn@ont.com. RareGoldCoins.com

2 Comments on "Should You Buy Very Rare US Gold Coins in Low(er) Grades?"

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  1. Liberty Eagle says:

    Great post on the gold coins for the common man. The love of gold currency coins might be more intense for those who value used and circulated coins from the 1800’s as opposed to bank deposit vault coins. I like to actually feel some of my coins to try to gain the connection to where the coin has been during the most interesting times in the history of the US. Also, a vague connection to real bullion value is somewhat comforting.

    • L.H. McDaniel,lll says:

      Agree with above post. I’m 66yrs. old & w/ grandpa & father, began our collection. I have to admit I was a bit of a snob but never discounted lower grade coins. Over the decades built a pretty healthy collection, of which thru deaths, divorces, etc. Have about disappeared. Early 2000’s, got reintersted &w/ a few high quality coins & high quLITY SETS, GOT VERY INTERESTED IN TRYING TO REBUILD, EVEN THOUGH COULD NEVER AFFORD WHAT ONCE HAD BUT DID BUILD SOME NICE SETS. nOW, BEING IN THE OIL/GAS BUS., DANGEROUS ENOUGH, TOOK SOME HITS & HAD TO PIECE IT OUT TILL ALL GONE. mADE ME SICK, EVEN EVERYDAY TO THIS DAY. I grew up in ’50’s so you could say I loved coins more than even the value. Very fortunate to have grown up around Amon Carters collection closely being he & Dad were friends since childhood, golfing partners, etc. So I’ve been exposed to some nice coins. I will never have what I’d like, of course my main source of income is Nat. Gas which the last couple years cut my income drastically so I don’t see any 5-10,000 coins in my future. But still participate now & then & the business has changed so muc. It’s profit, profit & who doesn’t want a profit. But my reason for being in coins is rather old school, the coins, put them in a safe & I don’t or ever have worried about they’re increase. Buy the way, the 2nd time I ad to sell due to a few dry holes was about a year & a half before prices shot thru the roof. It’s timing my friend.
      Will you advertize any coins that you seem to have come around on.
      Thank you.
      Sincerely,
      L.H. McDaniel,iii

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