By Doug Winter – RareGoldCoins.com ……
CoinWeek Content Partner
The April 2022 Stack’s Bowers sale of the Fairmont/”Hendricks” coins likely has forever changed the rare date gold market. This is the second article in a multi-part series that will focus on this sale and the specific coins that it contained.
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Some “Hendricks” related observations for those of you still wondering exactly what happened on Wednesday, April 6, 2022:
1. Prices for CAC-approved AU55 and AU58 Charlotte and Dahlonega half eagles have increased dramatically
For many years, the price range for a common date in CAC-approved AU55 was around $4,000-6,000 and $6,000-8,000+ for an AU58. These figures have been increasing in the past 18 months and they appear to have reached new levels at Fairmont.
Just look at some of the prices for AU55 common dates:
- 1846-D/D $5 PCGS/CAC AU55: $9,300
- 1847-C $5 PCGS/CAC AU55: $8,400
- 1849-D $5 PCGS/CAC AU55: $8,700
- 1851-D $5 PCGS/CAC AU55: $10,800
- 1853-C $5 PCGS/CAC AU55: $9,600
- 1855-C $5 PCGS/CAC AU55+: $13,200
Would I pay these prices if comparable coins became available via private treaty sale? Likely not. But it is obvious that in the current market, there is absolutely no chance I could buy these in the $4,000-6,000 as I could have as recently as a year ago.
2. “The Fairmont/”Hendricks” 1856-D $5 in PCGS/CAC AU58 brought $16,800, so my PCGS/CAC AU58 is also worth $16,800”
You’re going to be hearing and reading this a lot in the coming months, especially on dealers’ websites. Around 90% of the time this is just not true.
1856-D $5.00 PCGS AU58 CAC, Lot 5081
What your friendly dealer is failing to tell you is that the Fairmont coin was very conservatively graded (I thought it was a solid MS61/61+) and had exceptional color. It was the single nicest 1856-D I’ve ever seen in a PCGS AU58 holder, and the hypothetical coin against which it is being compared likely isn’t close to this one in terms of originality and eye appeal. Dealer X may have a $12,500 “knock-off” of this 1856-D, but he doesn’t have the $16,800 original.
3. “The Fairmont/”Hendricks” 1856-D $5 in PCGS/CAC AU58 brought $16,800, so my NGC AU53 non-CAC just rose in value from $3,500 to $7,000”
While no one is a bigger advocate of the “rising tide lifts all boats” theory of numismatic economics than I, this is clearly not the case for many coins. Your $3,500 NGC AU53 1856-D $5 may have become more liquid at $3,500 than it was pre-Fairmont, but this is like comparing a 2014 Toyota Camry to a 2022 Aston Martin DB9.
The area that represents the biggest uncertainty for new pricing post-Fairmont is coins that are very nice but a step down in quality. In the case of our 1856-D $5, this would mean a PCGS/CAC AU55. There is an auction record for one from Heritage’s 10/2019 sale at $4,080. This coin is worth significantly more today – but how much? Would I pay $9,000 for it? No chance. Would I pay $6,000 for it? In a heartbeat. So we can quickly determine that the new post-Fairmont level for this coin is somewhere in the $6,000-9,000 range. What remains is for the market (i.e., collectors such as yourself) to determine where on the price spectrum between 6k and 9k this coin falls.
4. CC $20s have jumped the shark
Including the 1870-CC in PCGS/CAC EF45 that brought a staggering $810,000, there were a total of six Carson City double eagles that brought six-figure prices in this sale. The coin that caught me off-guard, however, was the PCGS/CAC MS63 1884-CC, which brought a record-setting $120,000. This is a date with a PCGS population of eight in MS63 and three at CAC. I sold a PCGS/CAC MS63 in 2021 for $57,500, which I thought was pretty aggressive at the time. A year later, it seems like I gave the coin away.
1870-CC $20.00 PCGS EF45 CAC, Lot 5413
Here’s what scares me about the 1884-CC.
There are currently 82 graded MS62 by PCGS and another seven in MS62+. Assuming there are resubmissions inflating these numbers, there are still likely 50-60 MS62 and MS62+ 1884-CC $20s known; not to mention the other nice ones in the Fairmont holdings that haven’t been graded yet. I could easily see the PCGS population swelling up to 12-14 MS63 coins within the next two years, with the current three at CAC becoming five or even six. Remember, as well, that the chance of any CC $20 upgrading from MS62 to MS63 is not especially remote.
High-grade Carson City double eagles have always been expensive relative to their scarcity as a result of strong demand. But $264,000 for a PCGS/CAC MS63 1885-CC? $156,000 for a PCGS/CAC MS63 1882-CC? These prices were unthinkable a year ago, and I don’t see coins of this caliber getting cheaper any time soon.
5. New Orleans eagles… WTF?!?
I’d like to think that I know this market better than anyone else, and I’ve certainly handled more Finest Known and Condition Census New Orleans eagles than any other coin dealer. In a “typical” auction, I would have likely bought most of the high-end No Motto and many of the better With Motto coins, but in Fairmont/”Hendricks” I was blown out on all but a few coins.
Some examples are as follows:
Lot 5220: 1842-O graded AU55 by PCGS. I thought this coin was nice and it should have stickered at CAC, but I didn’t see it as an eventual PCGS/CAC AU58, which is worth around $17,500-20,000. It brought $19,200.
Lot 5224: 1844-O graded MS61 by PCGS. My comment in the catalog read “fresh BU but very choppy.” I liked it a bit less than Heritage 1/2022: 4724, which was graded PCGS/CAC MS61 and sold for $28,800. The Fairmont/”Hendricks” coin sold for $44,400.
Lot 5231: 1846/’5’-O graded AU58 by PCGS. This was one of the very few O-mint eagles in the sale that I didn’t like. I net-graded it down to AU55 due to an old cleaning. The coin brought a ridiculous $40,800 and I’m assuming at least two bidders were swayed by the equally ridiculous $36,000 that another PCGS AU58 sold for as Stack’s Bowers 3/2018: 10368.
Lot 5318: 1881-O graded MS61 by PCGS/CAC. I liked this coin a lot and was prepared to pay in the mid-20s for it but was very surprised when it raced up to $55,200. There are only three graded MS61 by PCGS and I thought the coin was very PQ. This means I could see it grading MS62, although it would probably need to be lightened a bit for this to occur. Is this coin worth $55k+ as a PCGS MS62 non-CAC? We shall see.
6. The return of the Market Premium Factor (MPF)
In simpler times, we saw nearly every Liberty Head Charlotte half eagle in EF40/45 sell for around the same amount; say $2,000-2,500. There were certainly exceptions (the 1844-C and the 1846-C were always worth a 25% MPF in collector grades), but scarcer dates like the 1851-C, 1854-C, and 1856-C sold for small premiums.
1846-C $5.00 PCGS EF45 CAC, Lot 5041
Now that CAC exists to quantify grade rarity, the market premium factor for EF Charlotte half eagles with low CAC populations has increased considerably. A case in point was the 1846-C $5 graded EF45 and awarded a CAC sticker that just brought $12,000 in the Fairmont/”Hendricks” sale. Yes, the coin was actually a solid AU53 (in my opinion). But 12k? Sheesh.
Or look at Lot 5018, a non-CAC 1841-C $5 graded EF40. Nice enough coin but I hope the new owner doesn’t mind the scratches on both sides. The coin still brought $6,000 which seems like a pretty hefty MPF for a reasonably common date which never used to bring much of a premium until you got up to the About Uncirculated level.
7. New players, new standards
This is not your Parents’ Dated Gold Market. I’m having to reassess many if not most of my basic instincts. Rarity is now looked at differently (see below). Appearance is now looked at differently (see below). Even the concept of time is now different.
Let me explain.
In 2020, I might have made the observation that a certain half eagle in PCGS/CAC AU55 had not been offered for sale in that grade since 2013. You would likely have thought “but the market for that coin has been flat since 2013, so why should I be paying more than the last APR?” And in most cases, you’d have been exactly right!
But in this frothy market, my observation that said AU55 last sold in 2013 for $6,000 is about the same as me telling you that the coin also was sold by Henry Chapman in 1919 for $23.
To quote the noted American numismatist Dwayne “The Rock” Johnson: IT JUST DOESN’T MATTER!!!
If a really great coin (please note that this does not mean a really expensive coin) comes available and at least two people truly deeply madly want to own it, the most recent APR–whether it was in January 2022 or March 2008–doesn’t mean squat.
8. When it comes to rarity, CAC is the new PCGS
For some serious new dated gold collectors, if a coin isn’t CAC-approved, then it essentially doesn’t exist.
Here’s an example. The 1865-S half eagle has a PCGS population of three in AU58 with two finer. It has a CAC population of one in AU58 with none finer. Even though the “one finer” is an incredible MS64 from the first round of the SS Central America shipwreck releases, the CAC-centric buyer is going to ignore that specific coin until it becomes CAC-approved.
Do I think this is “right”? I’m on the fence here. My appreciation for CAC is well-known. Do I think that non-CAC coins should be ignored? No, I don’t… and many sophisticated newcomers are thrilled to buy nice non-CAC coins. My position is to definitely buy non-CAC coins when CAC-approved issues are very hard to find or they sell for too much of a premium. Have your purchases vetted by a sophisticated dealer who can tell you exactly why your new coin didn’t garner CAC approval.
9. “Originality” is the new buzzword
If you are a collector or dealer who got started after 2000, you’ve not had the chance to see many coins with natural color and (relatively) undisturbed surfaces.
The beauty of the Fairmont hoard (and the “Hendricks” coins) is that 95% of them were as virgin original as you will ever see. One veteran dealer called me over to his table at the recent Baltimore show and stated “I sent my son upstairs (to the auction viewing room) to look at them so he’ll be able to understand exactly what an original gold coin looks like.”
Sadly, many of the coins from the recent sale will be tinkered with (some just a little; others a lot). But the Fairmont Hoard has added thousands of exceptionally nice coins into the generic, Trash Gold and rare date categories, affording new collectors (and dealers) the opportunity to purchase exceptional coins.
As I told a fellow dealer in Baltimore “the “Hendricks” coins were so nice, I even liked the no grades!”
10. Yes Coins Have Gotten Spendy, but Opportunities Still Exist
All nice coins seem to be more expensive in 2022 than ever before, but you’ve got to remember that a lot of these issues were ridiculously undervalued B.F. (“Before Fairmont.”)
1859 $5.00 PCGS AU58 CAC, Lot 5094
Here’s a case in point. Lot 5094 in the Stack’s Bowers 4/2022 sale was a lovely PCGS/CAC 1859 $5 that sold for $7,200. Since Stack’s Bowers sold a nice PCGS/CAC AU55+ in their 2019 ANA sale for $2,640, this seems like a ton of money. But given the fact that the PCGS/CAC AU58 coin in April’s sale was one of just three approved by CAC in AU58 with one finer (a PCGS/CAC MS63, which I currently have for sale), I would contend that it was a pretty fantastic deal at $7,200 and that the 55+ at $2,640 was laughably underpriced.
I think No Motto Philadelphia fives and tens (even the “common” dates) are still very good values as are the early With Motto issues from this mint.
I think certain Carson City half eagles are very good values relative to their eagle and double-eagle counterparts.
I think really great Charlotte and Dahlonega quarter eagles and half eagles (especially properly graded MS62 and finer) remain decent values given how incredibly rare most of these are.
Gold dollars and quarter eagles have not been placed under the microscope as have half eagles, eagles, and double eagles; so many dates in these two denominations remain overlooked.
Surprisingly, there are many good values to be had in the Liberty Head double eagle series. As I discussed above, the CC market is now majorly overpriced, but high-end Philadelphia and San Francisco issues in all three types remain undervalued. As an example, I bought the second-finest-known 1859 $20 (PCGS/CAC MS62) in the recent Stack’s Bowers sale for $72,000. Had Dell Loy Hansen not already owned the best (also graded PCGS/CAC MS62) and we went head-to-head, the coin would likely have sold for $125,000-$150,000.
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About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was 10 years old, buying and selling coins at conventions in the New York City area.
In 1989, he founded Douglas Winter Numismatics, and his firm specializes in buying and selling choice and rare US Gold coins, especially US gold coins and all branch mint material.
Recognized as one of the leading specialized numismatic firms, Doug is an award-winning author of over a dozen numismatic books and a recognized expert on US Gold. His knowledge and an exceptional eye for properly graded and original coins have made him one of the most respected figures in the numismatic community and a sought-after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality, and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at (214) 675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Red Book”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues.
In addition, he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally, Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.