By Louis Golino for CoinWeek….
The $10 First Spouse half-ounce gold coin series, which debuted in 2007 and ends this year, is a topic I have covered at length for this and other publications over the past six years.
As the series begins its long-awaited final year–a year that includes the release of coins for Pat Nixon, Betty Ford, and Nancy Reagan–now is a good time to look back on how it has evolved, how my own views have evolved, and what the series’ long-term future looks like.
Continuity in Analysis
My main argument since 2010 has been that low mintages cannot sustain demand for an expensive coin series over time if very few people collect the coins or like them. These are the key points I have made over the years:
- The first ladies of the United States deserved to be honored with their own coin series, but it would have been preferable to issue coins in silver or quarter-ounce gold coins to make them accessible to more collectors. But Former Rep. Michael Castle (R-DE), whose legislation created the series, thought that collectors wanted half-ounce gold coins.
- The bronze medals issued with the same design as the spouse coins are a good option for those on a budget, though they tend to have a lot of abrasions. The fact that the spouse medals have been popular shows that collectors wanted to see the nation’s first ladies honored, though not necessarily on gold coins.
Nonetheless, this suggests that the roadblock to the series’ success was not the fact that some people did not believe these women were significant enough to have their own series. Instead, it is the cost of the coins and the perception that too many designs are unattractive that has been a major drag on the series.
- The series has been very expensive to collect due to the large number of coins (42 coins, or 84 including proof and uncirculated versions); the price of gold, which rose consistently from 2007 through 2011; and the premium added by the U.S. Mint, which has run around 35% over spot value. That adds up to an outlay of approximately US$6,000 per year over a decade for a full set of coins.
Opinion has always been divided about the merits of the series, but it is telling that the detractors have always vastly outnumbered the supporters. In particular, the designs of most coins in the series have frequently been characterized in negative terms by many, although there are, of course, exceptions (the Liberty subset of four coins issued for the bachelor presidencies, the Jacqueline Kennedy coin and the two Tyler coins, Julia and Letitia). In addition, the coins issued for postwar first ladies have generally garnered more positive reviews as well, though they do not appear to have boosted interest in the series as much as many expected.
There have certainly been opportunities along the way to make money with these coins by purchasing those which, at the time, had the lowest mintages, and by buying coins from the Mint and having them graded – provided they came back as Mint State or Proof 70 coins.
But the low mintage approach also comes with substantial risks because it is a moving target, and unless sold at the right moment, the buyer may end up with a coin that no longer carries much of a premium. This is especially true for those who purchased such issues at high prices on the secondary market, only to see their values decline sharply in many cases.
The authorized maximum mintages, which have been reduced several times over the years–from 40,000 to 10,000–have always been too high, and the length of time each coin was available from the Mint was extended over the years from one year to two or more, making it difficult for buyers to know when sales would end.
The base of true collectors of this series is very small; this is reflected in the dwindling sales levels and low mintages. Based on the number of uncirculated coins with mintages in the 2,000 range and proofs in the 3,000 range, and the fact that many buyers purchase multiple examples, there must be well under 2,000 collectors of the series.
My views on the series have not changed much over the years, but the market for the coins has.
As I explained in 2014, I decided to stop collecting the series because I could not afford to continue and felt it would be too risky to keep buying coins for which there was almost no market.
It is true that coins that are not widely collected when first released sometimes become highly desirable down the road, and that may happen with the spouse coins. But in my view it is more likely that specific issues from the series will continue do well while most others will trade largely as bullion products, even in high grades.
I admire those who set out from the beginning to build a full set and were able to stick with it. Lower gold prices after 2011 helped them do that. But over the years I saw the market for these coins diminish to the point where someone who wants or needs to dispose of some or all of their coins is forced to sell them at close to spot value, as always with certain exceptions for the more popular issues.
This has been clear from numerous discussions with dealers and numismatic experts who focus on the series, such as my friend Eric Jordan, whose book Modern Commemorative Coins (2010) recommended the lower-mintage coins in this series and emphasized their long-term potential for appreciation, but who has become much more cautious about the series in recent years.
For example, in an online coin forum in December 2013 he noted that he is concerned that “the key date effect may get watered down”, since there are quite a few coins with ultra-low mintages and that the series was likely to perform like classic commemorative half dollars, where collectors pay more for coins they find attractive rather than always focusing on mintages.
Which Coins Have Potential?
The Liberty coins have always been popular because of the classic coin designs they sport, but even those coins have seen a lot of erosion in their values. Two of them, Jefferson’s Liberty and Buchanan’s Liberty, no longer carry a premium, and the value of the Jackson and Van Buren Liberty coins have come down from their previous values.
The two Tyler coins have always been popular for their fetching designs, but they have also come down substantially in value compared to their previous values. Nonetheless, these six coins will likely continue to outperform the others apart from the lowest-mintage issues.
At the moment the series key is the 2014 Eleanor Roosevelt uncirculated coin, with sales of 1,886. It appears likely that the Eleanor Roosevelt coin will remain the series key, depending on when sales of the 2014-2016 coins are ended. Sales of the Roosevelt coin were ended earlier than expected, which in several cases is the reason coins ended up with low mintages. Additionally, the previous keys–the 2011 Lucy Hayes and Lucretia Garfield coins, whose sales were only slightly higher than Roosevelt’s–also continue to command a premium, though substantially less than they used to.
Should the Series End with Nancy Reagan?
The legislation governing this series was written in a way that requires it to end with Nancy Reagan. That is because the spouse series has from the beginning been tied to the Presidential $1 coin series, and the law authorizing that series, the Presidential $1 Coin Act of 2005, says that a president must be deceased for two years in order for a coin to be issued bearing their image. Spouse gold coins are only issued if there is a corresponding $1 coin.
Perhaps it would have been preferable to extend the spouse series and presidential $1 series to any living first ladies and presidents. But at some point the series has to end, and given the decreasing sales of the spouse coins (with the 2015 Jacqueline Kennedy coin being the only exception), it probably makes sense to end the series now.
There is no doubt that the first spouse series contains some of the scarcest modern U.S. coins, but the real question, which I identified back in 2011, is how much that matters if so few people collect them or find the coins appealing. It does to some degree, but whether it will ever matter as much as the series’ promoters believe it does is unclear (though specific coins should continue to be worth more than their issue price).
For those who bought all their coins from the Mint, fluctuating gold prices have enabled them to buy the whole set at an average cost that is usually lower than the retail value of their coins today, though how much they would get when selling is another matter.
But if those who collect the spouse coins have enjoyed their pursuit, that is what matters for them. Collecting should be about having fun.
It is also worth considering the possibility that future generations of collectors may view the spouse coins differently than the mainly white, middle-aged male buyers of the current market, and perhaps they will seek to build sets of these coins, including even the Alice Paul coin that so many see as out of place since she was a suffragist rather than a first lady.