Early Series, Low Mintage Coins Remain Strong

Posted on 12/12/2008

While many areas of the coin market began the year with advances, it looks as if the current economy has taken a toll on some series where populations are excessive by grade, even though the series in question may be quite popular.

A guest article from NumisMedia

While many areas of the coin market began the year with advances, it looks as if the current economy has taken a toll on some series where populations are excessive by grade, even though the series in question may be quite popular. For example, Washington Quarters attract thousands, even hundreds of thousands of collectors. The last of the Fifty States was minted this year and is now on the market. The most recently released issues are always active within the collector community usually leading to a bombardment of coins sent to NGC and PCGS for certification. The quantities are enormous and once the initial demand is satisfied, the FMV has a tendency to decline, even with the PR 70 grades.

Early Washington Quarters also realized declines this year, especially in grades MS 64 to MS 66. The 1932 D began the year with an FMV of $6,060 in MS 64 and ended at $4,060; in MS 65, the FMV was $21,250 compared to the most recent $16,250. Even the 1932 S dropped drastically in MS 65 from $6,560 to $5,470. These are the two keys to the Washington series; it shows how important coins can fall out of favor and with dwindling demand, values can retreat significantly. There are other semi-key Washington Quarters that declined this year, mostly because the economy forced many collectors into a hibernation phase.

In the last few months, we have noticed inventories of Mercury Dimes are on the rise, thus creating some discounting in various dates. The inexpensive common issues appear to sell when there is a slight discount, however, some of the higher grades dated after 1935 are trading at a significantly lower FMV as compared to early this year. For example, the 1937 S in MS 67 Full Bands began the year at $1,340 FMV and fell to the most recent FMV of $910. The 1940 S Full Bands dropped from $630 in MS 67 to the latest FMV of $538. There are many other examples not so dramatic; in most cases it is a matter of increasing supplies and a much shorter demand.

While some of the series featuring coins minted in the 1900’s suffered losses, many of the pre-1900 coins showed good results for the year. Bust and Seated Coins are very popular for a variety of reasons. Many collectors enjoy the designs because they represent early US history. Most have a very limited original mintage. In most cases, coins of the 1800’s are just not available in high grades. This brings us to probably the most important consideration and that is the potential number of coins that qualify for the highest grades certified. Population reports are a mainstay for advanced collectors wanting the finest coins they can afford. In some series, including Seated coins, the highest grades may be MS 63. Since most early coins were not minted specifically for collectors, today’s collectors must have an appreciation for a hundred years of history in searching for coins in their original pristine condition.

Let’s take the 1815 $5 Gold in AU 50 for example; there was an original mintage of 635 coins. However, there are less than 10 known today with NGC certifying 5 and PCGS only 2 coins. The year began with the AU 50 boasting an FMV of $109,850 and ends at a higher $123,500. There is at least one major dealer willing to buy all the coins that he can locate and his buy prices continue to rise. However, it is almost certain that when any of these coins enter the market in a major auction, it will attract very aggressive bidding leading to premiums of the current FMV. This is not the only Bust $5 Gold that shows a hefty FMV increase. Below is a list of other dates and grades showing sizable advances for the year.

Date   Grade   FMV Jan 2008   FMV Dec 2008
1795 Sm Eagle   MS 65   $500,000   $596,880
1796/5   AU 58   $73,130   $90,630
1805   MS 65   $129,550   $167,050
1812   MS 63   $25,810   $31,560
1820   MS 65   $98,800   $120,250
1825/4   AU 50   $343,750   $781,250

This list reveals only a few examples of significant increases in the Early $5 Gold series and is also representative of most series from Half Cents through $20 Gold, from 1793 to the 1870’s. Advanced collectors are aware that what you see is what you get. The percentage of potential high grade coins diminishes by the age of the coin; the quality of the minted product has improved with the years. Further, there are many other coins that are just as rare which have not advanced during the year simply because none were offered for sale so new prices could be documented. Astute dealers and collectors are continually searching for these undervalued coins. Today’s bargains may well be those coins we have not seen in the market for many years.

In the Seated Half Dollar series, there are numerous examples of coins advancing throughout the year. In some cases, the FMV has a tendency to rise because the spread between two grades can be excessive. For example, in January, the 1839 No Drapery in MS 64 had an FMV of $47,810 and the MS 65 was $250,000; today the FMV is $60,630 in MS 64 and $218,750 in MS 65. The MS 65 fell because of new trading information during the year; this grade had no reliable trading records for several years. Whereas, the MS 64 advanced nearly $13,000 as a result of increased demand for a very small supply of coins. The wide differential between grades is not a sure fire indication that the lower grade will advance. Using the 1839 as an example, if there are 40 coins certified in MS 64 and only 5 coins in MS 65, the likelihood of the 64 advancing because of the FMV of the 65 is not nearly as good as if the MS 64 had 6 certified and the MS 65 had 4. It comes down to rarity and a little about potential availability. Below we have listed a few other Seated Halves that have advanced for the year.

Date   Grade   FMV Jan 2008   FMV Dec 2008
1853 A & R   MS 65   $20,630   $24,380
1854 Arrows   MS 66   $21,130   $25,350
1870 CC   AU 50   $26,880   $27,440
1870 S   MS 65   $10,440   $14,190
1874 CC   MS 64   $49,380   $61,880

So how did your numismatic holdings fare in 2008? The year began very strong with lots of activity and ended somewhat mixed. Because of the current state of the economy, many dealers and collectors are diversifying their inventories into stronger positions of bullion coins. What effects will this have on the coin market for 2009? The FUN Convention in early January will start off what could be a very tumultuous year.

We would like to extend a gracious and healthy holiday season to all and a very prosperous 2009.

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.