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Thursday, September 30, 2010
The Winning Edge
By Jim Fehr –
Gold Strengthens
The gold market is hot. Bullion prices are rising and driving gold coin prices higher. Economic conditions over the last two years have investors seeking a heaven against rising money supply/inflation. The government printing presses are running over-time as the treasury departments prints trillions of dollars to try revive a weak economy. Keynesian economic practices and an explosion in the size of the U.S. government should keep gold at healthy levels as prices flirt with $1,310 + an ounce.
Early U.S. Gold
Not too long ago I wrote about Early U.S. silver coins. Like the Early silver type, I wanted to break down the Early U.S. gold pieces in this issue. Hope you enjoy it. Prices are an approximation of your actual past and present acquisition cost. PCGS and NGC populations are based on their respective censuses reports.
Draped Bust $2.5 1796 – 1807
The first U.S. coin to have the heraldic (large) eagle on the reverse which was then adopted for all U.S. gold and silver coins from 1798 to 1807. There are two major design varieties for the 1796; the “with stars” and “no stars” obverse. Both of which are extremely rare. The populations listed are for all dates combined. Prices are an approximation of your actual past and present acquisition cost and are for a type coin (not better dates) in the series.
PCGS Circ. population: 392; NGC: 298
PCGS Unc. population: 89; NGC: 163
Prices have steadily climbed since 2002 and are still strong today. This issue is somewhat overlooked like most smaller denomination coins, but less so recently. The prices listed are for type coins in the series. Better dates like the 1796 no stars bring more. I like the issue in all grades at the current levels and believe they will continue to perform well.
In the next two groups Liberty is facing left as is true with most all U.S. coins after 1807. For the single year of 1808 the design had no denticles and was of the large bust type. Then none were minted until 1821. The new design included smaller stars and bust. After 1827 they reduced the coins size and denticles, hence the Capped Bust small size. Prices are an approximation of your actual past and present acquisition cost and are for a type coin (not better dates) in the series.
Capped Bust $2.5 1808 – 1827 large size
PCGS Circ. population: 115; NGC: 87
PCGS Unc. population: 72; NGC: 75
Capped Bust $2.5 1829 – 1834 small size
PCGS Circ. population: 147; NGC: 115
PCGS Unc. population: 123; NGC: 133
At first I thought the above two series might be a little too pricey, but, as I looked at them closer, I think there is great potential for the XF40 to MS63’s. Their PCGS and NGC populations are among the lowest in the early gold type series, both in circulated and uncirculated condition, which makes up for any lack of demand they may have because of their small size. I even like them in VF condition because they’re so rare.
Classic Head $2.5 1834 – 1839
PCGS Circ. population: 2,001; NGC: 2,770
PCGS Unc. population: 501; NGC: 946
The populations on the $2.5 Classic’s are a bit high in circulated condition yet not so high as to make them undesirable. They haven’t risen in price as much, or as long as the earlier issues, but look at how well they have done since 2002. They still seem inexpensive and are.
Draped Bust $5 1795 – 1798 small eagle
PCGS Circ. population: 267; NGC: 191
PCGS Unc. population: 63; NGC: 77
Draped Bust $5 1795 – 1807 heraldic eagle
PCGS Circ. population: 1,425; NGC: 1,153
PCGS Unc. population: 857; NGC: 1048
The Draped Bust $5 small eagle is seven times rarer than the heraldic eagle and prices reflect it. Yet the heraldic eagle has performed as well, if not better over the last ten years. This is probably due to their affordability relative to the small eagle – which also explains why the small eagle has risen in value so much in lower grades. Type buyers need one of each and the small eagles are very rare and pricey in higher grades.
Capped Bust $5 1807 – 1812 large size
PCGS Circ. population: 850; NGC: 651
PCGS Unc. population: 763; NGC: 1,041
Capped Bust $5 1813 – 1829 small size
PCGS Circ. population: 258; NGC: 220
PCGS Unc. population: 403; NGC: 440
I like both of these issues in XF and higher grades. The Capped Bust $5 small size seems to be at a great value for its population and price. Prices are an approximation of your actual past and present acquisition cost and are for a type coin (not better dates) in the series.
Capped Bust $5 1829 – 1834 reduced diameter
PCGS Circ. population: 38; NGC: 36
PCGS Unc. population: 69; NGC: 75
I knew the reduced size Capped Bust $5 were tough coins but I must say, I was surprised at how low the populations are. Remember, the populations listed are for the entire series. Price wise they are expensive, they make the Capped Bust $2.5 large size seem cheap. If you were a buyer of these before 2004 – congratulations! As a buyer today, you have to wonder if you missed the upside here. We shall see in time. Believe it or not, I don’t think there is any downside.
Classic Head $5 1834 – 1838
PCGS Circ. population: 2,646; NGC: 3,826
PCGS Unc. population: 414; NGC: 688
The most common of the early $5 series, yet they are in strong demand. These I would feel comfortable in buying in all the grades listed above AU50. Like the $2.5 Classic’s, they have just started to move in price over the last five years. And like the $2.5 Classic’s, they seem inexpensive relative to their rarity – especially with the recent little dip in prices.
Draped Bust $10 1795 – 1797 small eagle
PCGS Circ. population: 239; NGC: 177
PCGS Unc. population: 59; NGC: 96
Draped Bust $10 1797 – 1804 heraldic eagle
PCGS Circ. population: 1,085; NGC: 680
PCGS Unc. population: 541; NGC: 702
To me, the early $10’s are the most impressive of all the early gold. Its large size, design and gold metal are unique to all U.S. coins. The small eagle is very expensive today, attesting to its demand. Pretty much the same with the large eagle, but because it’s five times more abundant, they trade for about one-third the price. Both types have moved up a bunch in price over the last five years and there is no reason to believe they won’t continue to do so. Buy these in Fine to MS63 and don’t look back at what you could have paid. You’ll be happy you did.
Tags: Capped Bust Gold, coin collecting, coins, Draped Bust Gold, Early US Gold, gold coins, Jim Fehr, rare coins
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