Generic Gold Coins Fall to Historic Lows

Posted on 6/29/2017

If you're not picky, it's a great time to look at century-old US coins.

In recent months, the value of “generic” United States gold coins has fallen to historic lows in relation to spot gold prices. “Generic” gold coins are defined as common date United States gold coins that can be found in quantity. Most commonly seen are Double Eagles from the late 1870s to 1928.

The category also includes other denominations: Gold Dollars, Quarter Eagles, Half Eagles and Eagles. The lower denominations are more difficult to find in quantity, but common dates of the series trade as “generic” issues. The term “generic” generally refers to the most common dates of the type.

The reason these United States gold coins can be found in quantity has its foundation in the early monetary history of the country. Over a century ago, the United States began shipping large quantities of gold coins to Europe and other countries as part of international trade. One only needs to check the mintages of United States gold coins from this era to understand the number of coins that circulated here and abroad. We are talking about millions of coins.

In 1933, the United States famously went off the gold standard and made ownership of gold illegal. This included all gold coins with the exception of collectible coins. Luckily, the Secretary of the Treasury, William Woodin, was a coin collector and understood the importance of this exemption. Regardless, vast quantities of United States gold coins were surrendered and melted (including over 450,000 1933 Double Eagles).

It took several years to melt everything, and this is the gold that is now stored at Fort Knox. Many rare coins were turned in as well and were rescued at banks around the country. There is a fascinating article about this subject in the latest edition of The Numismatist.

Vast quantities of United States gold coins that had been sent overseas did not meet the same fate. Banks and other institutions around the world kept these coins secured as a store of wealth. Keep in mind that citizens of many European countries view gold favorably for its hard asset appeal. Some have memories of sharply depreciating currencies or, worse, overthrow or invasion of the country itself. Unlike in the United States, many banks in Europe sell vintage gold coins from around the world, including United States Double Eagles.

Starting in the 1950s, coin dealers from the United States started making trips to Europe to buy gold coins to sell back home. Many rare dates of Double Eagles were discovered over the years, and many issues were radically adjusted in terms of rarity. The 1926-S is a classic example. At one time, it was considered a major rarity, and the 1948 issue of the Redbook lists these coins for $900 (the 1927-D was listed at $550). By 1966, the coin had fallen to $375.

Over the next several decades, United States gold coins were repatriated back home at a regular pace. The pace was steady, but not overwhelming enough to disrupt prices radically. The premium for common date Double Eagles has fluctuated over the years, with the occasional spike for one reason or another. The Y2K scare of 1999 created a rush to hard assets, and Double Eagle prices soared. Similar scenarios have played out over the years, but in general, price premiums have remained steady.

For decades, Double Eagles have been the leading denomination investors and collectors have purchased as an alternative to modern bullion coins. Other than in the case of extraordinary increases, the premiums have fluctuated over the years based on supply and demand. Below are some recent historical wholesale prices for some of the most commonly seen NGC-graded United States gold coins:

September 2009 (Spot gold $1,000)

Coin MS 63 MS 64 MS 65
Type One Gold Dollar 1849-1854 (melt $48)
Liberty Quarter Eagles 1940-1907 (melt $120)
Liberty Half Eagles 1866-1907 (melt $241)
Indian Eagles 1908-1933 (melt $483)
Saint-Gaudens Double Eagles 1907-1933 (melt $967)

June 2013 (Spot gold $1,500)

Coin MS 63 MS 64 MS 65
Type One Gold Dollar 1849-1854 (melt $72)
Liberty Quarter Eagles 1940-1907 (melt $180)
Liberty Half Eagles 1866-1907 (melt $361)
Indian Eagles 1908-1933 (melt $725)
Saint-Gaudens Double Eagles 1907-1933 (melt $1,450)

June 2017 (Spot gold $1,250)

Coin MS 63 MS 64 MS 65
Type One Gold Dollar 1849-1854 (melt $60)
Liberty Quarter Eagles 1940-1907 (melt $151)
Liberty Half Eagles 1866-1907 (melt $302)
Indian Eagles 1908-1933 (melt $605)
Saint-Gaudens Double Eagles 1907-1933 (melt $1,210)

As can be seen from the above, the most recent premium for United States gold coins are at historic lows. For the last couple of years, the supply of United States gold coins coming from Europe has far exceeded the demand. Many have speculated on the reason for this occurring. Perhaps the European banks need the capital, or they no longer view gold as the safety net of generations past. Regardless of the reason, current prices represent an important opportunity for anyone who loves vintage United States gold coins.

Double Eagles represent the large majority of gold coins that have flowed back to the United States in recent years. The price drops for these have put enormous downward pressure on the price of other common date United States gold coins. I can assure you that very few Gold Dollars and Quarter Eagles are in European gold shipments.

Unfortunately, these have seen their prices slashed in recent years, as well. It’s sort of like “throwing out the baby with the bath water.”

In my opinion, these coins are raging bargains at these prices. There has never been a better time to find some attractive examples for your collection or as an investment. One idea that I would suggest: Buy as many different dates of these issues at or near the current generic prices. This would be a great start for a serious collection of any of these issues.

Remember, the prices listed above are wholesale indications, and your cost will vary depending on source and quality. As usual, my advice is to buy the best you can afford.

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Jeff Garrett bio

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