Sitting Pretty

Posted on 7/1/2005

For those collectors who began their search for Early $5 and $10 Gold coins more than a few years ago, it is quite obvious that buying and putting these rarities away was a very lucrative endeavor.

For those collectors who began their search for Early $5 and $10 Gold coins more than a few years ago, it is quite obvious that buying and putting these rarities away was a very lucrative endeavor. Playing Monday-morning-quarterback now we can see that these buyers were very astute. While many of these coins were always relatively expensive, several years ago most dealers and collectors did not care much about this area of the market, especially for coins in the VF to AU range. Of course, we now know that, in many cases, these are the only grades available in the marketplace. When the Mint State issues are offered for sale, most sellers look for well above the current FMV levels. When nice original specimens are in a major auction, the competition is generally very fierce.

What happened to make the Early $5 and $10 Gold coins rise so dramatically in value? Suffice it to say there are many factors that lead to this price rise. Probably the most important factor is the number of affluent collectors who have entered the coin market over the last 10 years. We now have thousands of collectors willing to pay thousands of dollars for the right coins. As these numbers increased over the years, the number of available Early Gold coins was on the decline without much notice. As evidenced in the last year, we have seen several dealers trying to purchase properly graded coins that fall into these categories without an overabundance of success. More than anything the potential buyers have forced the prices up at an incredible pace. For those collectors inclined to take profits, this may be one of the areas to do so — in a big way.

The market makers in this area of numismatics have an array of ready buyers for these coins, yet they are not coming out of hiding as quickly as higher FMV prices would make you think. This leads us to another reason that these coins have become so popular in recent years. Buyers are looking for unaltered coins, not overly cleaned or scrubbed to appear a grade higher. Buyers want original coins that have nice appeal for the grade. This also may be why the current owners of these coins are not yet willing to part with their nice original coins. If all they see on the market are coins that don't have a nice original appearance, then they quickly realize that they are holding onto coins that may be even rarer than the market appears. Sometimes this makes collectors appear greedy but only time will tell in this case.

Another factor leading to the price jumps is that U.S. Gold coins in general have become more attractive to collectors in the last few years. In the past, nice collector gold coins might have been priced in the thousand dollar range compared to non gold key dates at $250 to $500. Today, there are a large number of collector coins that are comparably priced to Gold coins so the jump to collecting U.S. Gold appears more parallel with the non-gold issues. With the FMV of key dates climbing so dramatically in the last couple of years, Gold coins at $2,000 may look like a better buy than key date non-gold coins at $2,000. Since collectors are more accustomed to spending higher amounts on coins in the current market, Gold coins are enticing many numismatists. When you add the variable of the bullion value, some collectors feel that the fever may strike mightily if and when gold bullion takes off to extremely higher levels.

Let's look at some FMV price comparisons over the last five years for selected Early Gold.

Capped Bust Small Eagle $5 Gold Type


XF40
AU50
AU58
MS60
MS63
July 2000
$14,380
$20,000
$25,000
$41,250
$120,630
July 2005
$20,630
$29,380
$44,380
$51,880
$140,000

Capped Bust Heraldic Eagle $5 Gold Type


XF40
AU50
AU58
MS60
MS63
July 2000
$2,840
$3,560
$5,440
$6,060
$13,750
July 2005
$4,810
$7,090
$8,940
$10,220
$20,000

Capped Bust Left $5 Gold Type


XF40
AU50
AU58
MS60
MS63
July 2000
$2,100
$3,160
$4,810
$5,630
$12,220
July 2005
$3,780
$6,060
$8,060
$8,750
$17,810

Capped Bust Left Large Size $5 Gold Type


XF40
AU50
AU58
MS60
MS63
July 2000
$2,970
$3,440
$6,970
$8,050
$15,000
July 2005
$3,810
$5,690
$7,690
$8,810
$18,130

Capped Bust Left Small Size $5 Gold Type


AU53
AU58
MS61
MS63
July 2000
$10,620
$14,400
$18,000
$40,200
July 2005
$30,000
$36,880
$42,250
$52,650

Capped Bust Small Eagle $10 Gold Type


XF40
AU50
AU58
MS60
MS64
July 2000
$13,800
$21,120
$43,750
$53,130
$172,500
July 2005
$30,000
$43,130
$56,880
$76,250
$375,000

Capped Bust Heraldic Eagle $10 Gold Type


XF40
AU50
AU58
MS60
MS63
July 2000
$4,810
$5,560
$9,190
$10,630
$28,030
July 2005
$11,250
$17,940
$23,130
$26,250
$36,880

As you can see all of the Early Gold is up substantially. Further, the current FMV prices do not guarantee that you can find a properly graded coin at these levels. Most collectors and dealers in possession of these coins have been demanding more than current levels when offered for sale. These are the type of coins we have written about in the past. When you look through major auctions or a dealer's inventory (whether at a coin show or their latest ad), these coins are not easy to find. When you do locate a coin you have to be prepared to pay a healthy premium.

An additional series that has shown significant gains over the last several months is Three Dollar Gold. We will discuss these in expanded detail in an upcoming issue.

NumisMedia has recently been named the NGC Official Price Guide.

This article is a guest article written by:
NumisMedia

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.