Market Down, Bargain Hunting Continues

Classic Gold Commemorative coins, issued from 1903–1926, are one of the more fascinating series of coins issued by the US Mint. A set of all 13 coins would include nine gold dollars, two quarter eagles, and two $50 gold pieces. These coins can be very intriguing to collectors for their historical significance, honoring notable Americans and events. Commemorative coins are some of the most artistically designed coins the mint has ever created. They have a face value but were primarily struck for collectors and, in most cases, they have a very limited original mintage. The 1903 Louisiana Purchase, both the Jefferson and McKinley $1 Gold, had a mintage of 17,500 coins. All other Gold Commemoratives were minted in lower quantities with the exception of the 1926 Sesquicentennial $2½, which initially was a rather large mintage of 46,019. This was the last of the Classic Gold Commemoratives minted until the 1984 Olympic $10 Gold, which signified the beginning of the Modern Commemorative era.

In the past six months, we have seen a downturn in the overall coin market, after what we now know was an upward cycle that lasted at least six years. During every cycle in the past 40 years, there have been swings that caused some series to adjust back and forth. However, this six-year bull market saw very little backward drift. Now that the market has swung to the downside, some series declines seem to be, for the most part, an overreaction. Classic Gold Commemoratives may be just such a series. In January 2008, the FMV for the 13 coins, including both $50 coins, was $579,880 in MS 66. Today, it is $508,780. In MS 65, the January 2008 FMV totaled $358,880 against today's FMV of $336,990. However, when you remove the $50 Pan Pacs from these totals, decreases are even more dramatic. The chart below shows a comparison of the 11 coins that make up the set of Gold Commemoratives in MS 65 and MS 66. The MS 65 FMV in January 2008 was $61,190 and today it is $55,740. In MS 66, the FMV was $109,250, while today it is $96,280.

As you can see, the FMV for all 11 coins is lower today than at the beginning of 2008. Some are considerably lower and even the spreads between the two grades are rather close in a couple of cases. The FMV for the 1903 Louisiana Purchase / McKinley $1 is $2,730 in MS 66 and in MS 65 it is $2,300. Typically, collector coins in the next higher grades are considerably higher. One factor that determines the tight spread is the number of certified coins in these grades. In general, as the grades tend toward the highest level, the number of coins certified becomes noticeably fewer than the previous grade. However, in this case, the number of coins certified by NGC and PCGS in MS 65 and MS 66 is 881 and 755, respectively. Since these totals are so close, it stabilizes the FMV in close proximity as well. When these coins were hot, they typically brought over the current FMV. Now that they are in a downward cycle, they are consistently being discounted. When these turn around they will again command premiums to FMV. When dealers start stocking these for inventory, there is a good chance this series will reverse from the current trend.

The most active areas of the market are bullion-related coins. Whether it is common US gold prior to the 1930s or the modern Gold and Platinum coins, this area is attracting today's collectors and investors. At the top of this list may be the 2009 Ultra High Relief $20 Gold. The Mint began shipping them in March and they are now in the market. Uncertified coins are bringing $1,500–$1,600 wholesale. We have seen newly certified coins from NGC, Early Release MS 69, bringing $1,650 wholesale. The latest MS 70 Early Releases have traded in the $2,200 range wholesale. As more coins hit the market these prices will adjust. However, it will take some time before we can get a solid picture of how many qualified for the special Early Release designation.

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