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Coin Collecting Strategies – Generic Gold Coins Fall to Historic Lows

If you’re not picky, it’s a great time to look at century-old US Generic Gold coins

 

By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……
In recent months, the value of United States generic 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.

generic goldThe 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 generic 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 generic 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, the 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.

generic goldStarting 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 Red Book 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)

September 2009 (Spot gold $1,000)

June 2013 (Spot gold $1,500)

June 2013 (Spot gold $1,500)

June 2017 (Spot gold $1,250)

June 2017 (Spot gold $1,250)

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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Questions about the rare coin market? Send them to [email protected].

Jeff Garrett bio

Jeff Garrett
Jeff Garretthttps://rarecoingallery.com/
Jeff Garrett, founder of Mid-American Rare Coin Galleries, is considered one of the nation’s top experts in U.S. coinage — and knowledge lies at the foundation of Jeff’s numismatic career. With more than 35 years of experience, he is one of the top experts in numismatics. The “experts’ expert,” Jeff has personally bought and sold nearly every U.S. coin ever issued. Not a day goes by that someone doesn’t call on Jeff Garrett for numismatic advice. This includes many of the nation’s largest coin dealers, publishers, museums, and institutions. In addition to owning and operating Mid-American Rare Coin Galleries, Jeff Garrett is a major shareholder in Sarasota Rare Coin Galleries. His combined annual sales in rare coins and precious metals — between Mid-American in Kentucky and Sarasota Rare Coin Galleries in Florida — total more than $25 million. Jeff Garrett has authored many of today’s most popular numismatic books, including Encyclopedia of U.S. Gold Coins 1795–1933: Circulating, Proof, Commemorative, and Pattern Issues; 100 Greatest U.S. Coins; and United States Coinage: A Study By Type. He is also the price editor for The Official Redbook: A Guide Book of United States Coins. Jeff was also one of the original coin graders for the Professional Coin Grading Service (PCGS). He is today considered one of the country’s best coin graders and was the winner of the 2005 PCGS World Series of Grading. Today, he serves as a consultant to Numismatic Guaranty Corporation (NGC), the world’s largest coin grading company. Jeff plays an important role at the Smithsonian Institution’s National Numismatic Department and serves as a consultant to the museum on funding, exhibits, conservation, and research. Thanks to the efforts of Jeff and many others, rare U.S. coins are once again on exhibit at the Smithsonian Institution’s Museum of American History. Jeff has been a member of the Professional Numismatic Guild (PNG) since 1982 and has recently served as president of the organization. He has also served as the ANA President and as a member of the ANA Board of Governors.

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