By Louis Golino for CoinWeek ……
*Updated to include remarks by former CCAC Chairman Gary Marks.
My CoinWeek colleague, Joshua McMorrow-Hernandez, recently wrote about the upcoming Liberty centennial gold coins that will be issued to honor the 100th anniversary of the release of the Mercury dime, Standing Liberty quarter, and Walking Liberty half dollar in 1916. He discussed the secondary market prospects for these coins and whether their launch by the Mint will be a repeat of the situation that developed at the 2014 ANA World’s Fair of Money, when the JFK gold half dollar was launched.
Here is my take on the centennial gold trio:
First, the Liberty Centennial Gold Coins will, without question, be major highlights of the United States Mint’s numismatic offerings in 2016. Were 2016 not such an important year for U.S. modern coins, one would be tempted to say they will overshadow everything else coming from the Mint.
But 2016 is not just the centennial of the three iconic Liberty coins that debuted in 1916 and which were issued because President Theodore Roosevelt wanted to see new, compelling designs on American coins. 2016 is also the 30th anniversary of the American Silver Eagle and American Gold Eagle, and the 10th anniversary of the American Gold Buffalo, the three leading precious metal coin programs produced by the U.S. Mint in the modern era. The Mint undoubtedly has some exciting surprises in store to mark these anniversaries, especially given its past practice of issuing special coins and sets for these occasions.
The gold centennial coins will be hugely popular, appealing not just to those who normally pick up modern issues from the Mint but also those who collect classic U.S. coins, and they are also likely to increase interest in the original silver coin series.
Another factor is that back in 1916 the Mint had much less advanced technological capabilities to strike coins compared to what it has today, which is why coins from that era looked so much less uniform than modern coins. Those who love these designs are very eager to see them struck to modern specifications with barely any flaws.
The appeal of the coins is not limited to appreciation for the designs themselves and widespread interest in the three classic series but also comes from the fact that these are specifically Liberty-themed coins. This is the same dynamic we have seen so many times such as with the Liberty subset of first spouse coins and with the 2015-W $100 Liberty high relief gold coin, which sports the first truly modern interpretation of Lady Liberty. American collectors, like Americans in general, love liberty and liberty’s allegorical representation as an attractive, strong female.[*]
It is also significant that the centennial gold trio is an initiative from the Mint, not from Congress. And it shows that the Mint’s leadership is in tune with the strong interest among modern collectors for the classic coin designs of our past.
The Mint has so far only announced that the coins will have the same diameter as the originals but weights that correspond to their denominations (1/10th, ¼, and ½ oz.), which means they will be thinner than the originals. Nothing has been revealed regarding whether they will be issued in proof or uncirculated or both, or whether the coins will have a limited mintage, or be struck to demand. In addition, we know that the quarter will use the original 1916 bare-breasted rather than the modified version that debuted in 1917 and inscriptions will be added for weight and gold purity.
Will not be like JFK gold
The Mint and the ANA appear to have learned the lessons of 2014, and it is very unlikely we will see a repeat of what happened with the JFK gold coin with this release or any other. The Mint may or may not release the coins at the summer ANA or another show this year, but even if they do, I think they will also release it online either before or during the show to prevent the kind of chaos that emerged in 2014.
Moreover, these coins are really not aimed at speculators and flippers but at true collectors. Of course there will be dealers and other coin sellers who have their coins graded, and the market for those issues will be volatile as always, but from my discussions with fellow collectors, I have the strong sense that these coins will be bought primarily by those who appreciate the designs and plan to hold on to them.
I suspect the Mint will strike the centennial issues to demand to enable anyone who wants and can afford them the opportunity to obtain the coins, and I also have a feeling they will be issued in proof since proof coins always sell better than uncirculated ones.
Gary Marks, former chairman of the Citizens Coinage Advisory Commission, told me he agrees the Mint may produce these coins to demand, but he added that he thought they would do that with the 2015-W American Liberty high relief $100 gold coin, which was limited to 50,000 coins. He also said regarding the finish of the centennial coins that :“As I recall the discussion between Mint staff and CCAC members at our January 28, 2015 meeting it seemed likely- at least at the time – the Mint would go with a business strike finish. The reason…it more closely reflected the character of the designs as first produced in 1916.”
One collector-friend of mine said: “On the three gold centennials, I am buying them because I feel the early 20th century coins are practically the essence of American coin collecting. I have trouble seeing how anyone could be interested in collecting U.S. coins could not be interested in the coins of the early 20th century.”
Another factor is that the market for show label coins has matured considerably over the past couple years. Not only did the 2014 JFK gold show label coins decline quickly in value [**], but other coins issued more recently with first day of issue labels have not been selling for huge premiums either. And many collectors say they want these tribute coins in their original government packaging, though of course some will want graded examples.
Silver versions unlikely
There has been a lot of discussion in the numismatic world about whether it would have been better to issue these coins in silver and/or platinum rather than or in addition to gold. During the Citizen Coinage Advisory Committee’s (CCAC) meetings on these coins last year, several members expressed enthusiasm for striking them in one or both of the white metals, while others said it could be problematic since unscrupulous sellers might try to pass off the 2016 silver coins as high-grade examples of the 1916 coins.
There is a lot of support among collectors as well for silver versions, but the Mint only has statutory authority to strike them in gold, and issuing them in silver would require specific legislation from Congress, which is unlikely especially in an election year. In any event, the Mint has moved forward with plans to strike them only in gold.
Depending on gold prices at the time of issuance, these coins will likely cost around the same for the whole set as the initial price of the JFK gold coin since they contain a combined total of .85 ounces of gold, or one-tenth of an ounce more than the Kennedy coin, and gold is today about $200 less per ounce than it was in 2014
The centennial coins will be also be accessible to more people than the JFK coin because some may purchase only the ones they can afford provided the Mint sells them individually, which appears likely since they are listed separately on the Mint’s 2016 schedule.
Comparison with 2009 UHR
The best comparison is not with the 2014 JFK gold coin but with the 2009 Ultra High Relief double eagle, another modern gold issue that reused an iconic and beloved classic coin design. That coin, which has a mintage of almost 115,000, turned out to be a secondary market winner mainly because individual collectors were so taken with it.
Ian Russell, President of Great Collections, said he agreed with the comparison with the 2009 UHR coin, noting that he expects to “see a lot of classic coin collectors buying these modern issues, just like what we saw with the 2009 Ultra High Relief. I expect continued demand after they are released as well.“
That is precisely the demand dynamic we saw with the 2009 coin, which is the main reason that a coin with such a large mintage that was readily available from the Mint is still widely popular and sells for a premium. There will always be newer collectors who did not buy the coins from the Mint, and who appreciate the great designs of the 1916 coins, which should support a solid market for them going forward irrespective of mintages and the market for top-graded coins.
Ultimately, the centennial gold issues are a celebration of these superb designs that are so evocative of the American tradition and our long-standing attachment to the value of freedom.
*Keep in mind as well that there was substantial interest among collectors in the proposed American Palladium Eagle that, if issued, would have used the Mercury dime obverse design for its obverse. That coin proposal was cancelled because of projected low demand for the bullion issue, but there appeared to be solid demand for a collector version in large part because of the design.
**Great Collections is currently selling a Proof 70 2014 ANA label JFK gold half dollar for $1,500, which is only a couple hundred over a Proof 70 without the show label compared to several thousand dollars more right after the 2014 ANA show. Collectors and dealers lost millions from that debacle.
Walking Liberty Centennial Gold Coins Currently Available on eBay