Jim Bisognani: There's Gold Value in Them Thar Hills

Posted on 4/16/2020

Seek and you shall find MS 65 Type Gold and Top Pop Elizabeth I Sixpence bargains.

Until recently, having worked remotely for years, I was in the minority. I did and still do consider it a privilege. I also find it peaceful and very conducive for my “coindextering” here in rural New Hampshire. The only interruption of the workday is usually the occasional audible rumble of a delivery truck pulling into my driveway, which prepares me for impending footsteps upon my porch, sometimes followed by the doorbell ringing to announce the arrival of a package.

Ms. Chloe selecting coins for the top and bottom five.

Other than that infrequent disturbance, I don’t have many distractions. I enjoy music of the great American songbook playing softly in the background as I type away at the keyboard and stare at my dual monitors. As if on cue, when I deem it’s time to finally take a pause from fixating on why an otherwise average AU 58 Morgan Dollar brought MS 62 money, and I find my bleary eyes separated from the captive monitor, our cat, Ms. Chloe, is sitting by my side. I invariably smile into her adorably inquisitive eyes as she looks up at me, there just to say “hi” or “Daddy, time for a break so we can play.” Cats are so special.

Truthfully, if it weren’t for the news updates or occasionally looking at the calendar, one day just blends into another. It might not sound like an exciting existence, but the solitary and quiet conditions do make for a rather productive workweek for research and writing for this coindexter. Now with the pandemic necessitating much of the world’s workforce to work from home when practical, millions of people are away from their office digs, and the chitchat around the proverbial water cooler is no more. 

Being self-quarantined due to COVID-19 and sequestered to home, we are all having deliveries made to our door, front porch or curb for virtually everything that one would want, from groceries and dinner to luxury items. Coin dealers with well-structured websites have observed an obvious and demonstrative uptick in browsing and business as well.

Indeed, many well-established coin dealers have been sending emails touting that “We are still open and eager to do business” etc., complete with instructions on how to parcel up your collectibles — everything from sports cards, movie posters, gold and silver — right from the comfort and pandemic-free safety of your home (or other temporary isolation workplace) to consummate the transaction.

Gold spikes to eight-year highs!

Buying and selling gold and silver has always been a huge business, and now that the market is blazing hot, the demand is truly overwhelming. This morning I watched gold race to levels last seen in late 2012! Now trading well over $1,700, it is a display of universal strength for the bellwether yellow metal.

Just to illustrate how strong demand is with gold quoted at $1,725 per ounce, the top electronic trading buy price for the US one-ounce $50 Gold Eagle was $90 over spot, and low retail ask was nearly $125 over spot or equal to 7.25% premium!   

So, as the demand and accelerated premiums for “purely” bullion US Gold Eagles rages, here are some quick and eye-opening evaluations. Although collecting NGC-certified one-ounce $50 Gold American Eagles is extremely popular, of the over 20 million coins minted as business strikes to date, less than 1.25% of that lofty output have been graded by NGC, so nearly 99% of those coins are still “raw.”

The 2020 $50 Gold American Eagle
Click images to enlarge.

US one-ounce $50 Gold Eagle versus Saint-Gaudens Double Eagle

The Saint-Gaudens Double Eagle (1907-1933) which contains .9675 ounces of gold finds the buy and sell spreads are even tighter than those for the $50 Gold American Eagle — believe it! The ranges between bid and ask for $20 Saints graded NGC MS 61 through 65 were as follows:

$20 Saints Bid and Ask Percentage
NGC MS 61 $1,800 / $1,920 6.67%
NGC MS 62 $1,810 / $1,940 7.18%
NGC MS 63 $1,880 / $1,975 5.05%
NGC MS 64 $1,900 / $2,005 5.53%
NGC MS 65 $1,965 / $2,065 5.09%

According to the NGC Census, in MS 61 through MS 65, the Saint-Gaudens series as a whole comprises a total population of 972,302. Granted the prices listed above would be for the “generic” $20 Saints and, not surprising to the knowledgeable numismatists, the majority of those offered would be comprised of 1924 and 1927 dated coins. The NGC Census reports 319,042 1924 examples in MS 61 through MS 65, while the 1927 posts 145,036. So, these two dates account for nearly 48% of all those within these grades.

A 1924 Double Eagle graded NGC MS 62 and a 1927 Double Eagle graded NGC MS 65+
Click images to enlarge.

MS 65 Pre-1933 US Gold Type bargains

Now keeping these spreads in mind for non-numismatic raw US Gold Eagles and the semi-numismatic NGC-certified $20 Saint-Gaudens type coins, yours truly discovered an even greater opportunity! Major traders are offering these miniscule spreads on high-grade certified numismatic NGC MS 65 US pre-1933 gold!

Bid and Ask Percentage
$10 Indian graded NGC MS 65 $2,420 / $2,550 5.37%
$10 Liberty With Motto graded NGC MS 65 $2,080 / $2,200 5.77%
$2 1/2 Indian graded NGC MS 65 $1,200 / $1,235 2.92%

Considering there are millions of uncertified Gold Eagles, and if the new customer or established collector is looking for a mere store of value, that is fine. However, for the true coindexter or just those new to the hobby desirous for more than a bullion play, consider the following statistics.

Within the wildly popular $10 Indian Head (1907-1933), accounting for the entire series, only 4,344 coins appear within the MS 65 designation in the NGC US Coin Census! The “type” coin here would be either 1932 or 1926. Yet combined within the NGC US Coin Census there are only 2,990!

Want further justification of this value? When gold spot was last trading at these levels in late November 2012, the CDN Greysheet Coin Dealer Newsletter bid was $3,080 and ask was $3,225. Based on these figures, today’s veteran collector or those new to the hobby can buy these truly beautiful gold icons at 20.93% less than eight years ago!

Within the $10 Liberty series (1838-1907), in MS 65, a scant 3,597 coins claim MS 65! (Only four of that total appear as the No Motto variety.) Either “type” coin for this exercise would be either the 1901 or 1901-S, as those twins combined are virtually 80% of the MS 65 coins, although together they only number 2,868 coins!

For reference, with gold spot trading at the same levels in 2012, the CDN dealer bid for MS 65 $10 Libs With Motto was $3,100 and ask was $3,250. Today, the same MS 65 can be purchased by the savvy collector or gold bug at a 32.31% discount!

Yet the best value in my estimation is the $2 1/2 Indian Head. In MS 65, as a series it tallies only 4,271 coins in the NGC US Coin Census. The “type” coin appears to be the 1925-D with 1,008 in full Gem. Of course, this is just a suggestion, but with such a small population compared to the collecting base for the coin, it seems that the full Gem Indian Head Quarter Eagle type coins are the real bargains here. Especially so considering that in November 2012, the Coin Dealer Newsletter bid was $2,200 and ask was $2,275! Nearly eight years later and this coin is available at a 45.71% discount!

A 1925-D Indian Head Quarter Eagle graded NGC MS 65
Click images to enlarge.

While gold is and will always be the darling of the metal bugs, it is prudent to consider that the last time gold was trading at these levels, the ratio between gold and silver was equal to a ratio of 52-1. Today, that silver ratio is nearly 110 times! So, I strongly believe that even though there are a lot of industrial applications for silver, and this may account for some suppression in this COVID-19 environment, it is more than overdue for a surge.

Queen for a day

Moving away from the metals for a moment, another obvious collector’s delight are high-grade, attractively toned or unique offerings as they come up for sale. This action is now extending to common and moderately priced world coins as well. One such intriguing listing was included in The Heritage Weekly Ancient and World coin sale on April 2.

A close-up of the 1569 England Sixpence graded NGC MS 62 that sold for $732
Click images to enlarge.

Just a few things about this impressive, centuries-old sixpence from our “Mother Country.”

  1. It is a pristine and historic survivor that it is over 450 years old.
  2. It is the only coin of this type which has been graded as Mint State by NGC and it is the highest graded of the type.
  3. The coin possesses a positively original gleam and surfaces
  4. Take a closer look at Elizabeth’s portrait: Her majesty’s profile is triple struck and more! The effect on her chin, nose, forehead and eye creates a truly amazing and dramatic look!

So, here is a Top Pop coin that is four and a half centuries old, featuring an enormously popular ruler that was available for well under $1,000! Such a coup!

Until next time be safe and happy collecting!

Jim Bisognani is an NGC Price Guide Analyst. He has written extensively on US coin market trends and values.

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