first spouse gold feature, coin analyst

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.

Market Shifted

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.

first_spouse_2I 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?

nancybutton
Nancy Reagan “Just Say No!” button

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.

Outlook

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.
 

12 COMMENTS

  1. Thanks Louis, I think this is a good article summarizing the series, its shortcomings, and potential future prospects. Being a “white, middle-aged male buyer” myself, it may come as a surprise that the one and only coin that I purchased in this series was in fact the Alice Paul.

    The First Spouse series does honor these American women, but simply because of who they happened to marry, and not because of what they did. I’m not saying they aren’t deserving, but what appealed to me about the Alice Paul coin was that a great American was being honored solely due to the merits of her actions — which necessitated a bravery and resilience that most middle aged white men could never muster. She was a progressive activist that stood her ground for human rights in the face of much adversity, and helped to permanently change the course if American society.

    I believe this coin is the great sleeper in the series, due to 1) its unique, one-off nature, and 2) for the reasons mentioned above.

    I agree with your assessment that future supply/demand valuation dynamics will be analogous to the classic (and modern to some extent) commemorative series, where collectors gravitate to the coins that have better designs and/or resonate with them personally.

    • Thanks, Brian. I like you take on the Alice Paul coin and I may keep mine for those reasons. I would add, though, that to a large extent the reverses of the coins do seek to honor some of their achievements esp. on the more recent coins. For example, the Jackie Kennedy coin depicts her favorite flower, the saucer magnolia, but as the Mint’s description notes: “The petals stretch across the globe, its tips connecting the points of some of her most notable diplomatic visits” so it also symbolizes some of the work she did too. Or consider the reverse of the Lady Bird Johnson coin which depicts symbols of her most well-known achievement, the highway beautification program. The earlier issues did not do this nearly as much, and in some cases, say, Bess Truman, showing the gears of the train she rode with Harry, makes sense as probably her main achievement as first lady was being the first one to campaign with her husband on a train.

      • I like the Alice Paul reasoning, too, BUT on the other hand, deciding who to marry gets under-appreciated as one of the key decisions that determine one’s quality of life.

  2. I would add that there is only so much a coin can do to depict the work or achievements of anyone esp. when one side is used for a profile, but I have little doubt the series has spurred greater interest in these women and in U.S. history in general. I think it (and the medals) may also have spurred some women and girls to get into numismatics.

  3. I believe after the series is over and the dust has settled for a few years, that this series will take on interest for the sheer difficultly in completing a full set, in either unc, proof or especially both. Indeed for the utter size of the set, and the scant mintages of the vast majority of its members it is difficult to see any other modern coin series coming close to rivaling it. In other words the poor appearance of the coins themselves will take a back seat to the inherent challenge in completing a set which may be seen as a collecting status symbol. Lets not forget the wildcard of the gold price which, if it spikes significantly which will lead to melting of a large number of these, which will only magnify the scarcity.

  4. Buddy, I disagree. I think you would find more interest in random great coins featuring famous women like Margaret Thatcher, Mother Theresa, Golda Meir, etc….if they were ever produced.

    The fact that — what ? — 90-95% of the coin hobby are men and that 1st Ladies (or future 1st Gentlemen) have little appeal to the average coin collector. The coins are interesting and some have nice designs. But they are gold….cost alot of $$$…and there are the modern enhancements from the TPGs to consider, too.

    A novelty picking up the 1 or 2 you like isn’t beyond impossible for future collectors, but how many collectors will fork over thousands on these coins when they can have some top-of-the-line Morgan Silver Dollars ? And if you are spending tens of thousands of dollars on the set, would you rather the 1st Ladies OR some super-rare Saint Gaudens which will never be produced again ?

    Hey, I collect some of the modern bullion coins (Reverse Proof Buffalo, 2009 UHR) so I’m not completely antagonistic. But I pick-and-choose and have no interest in collecting every American Gold Eagle or Buffalo or ASE. So I don’t know how you stoke interest in a lengthy, costly series that doesn’t have much mass appeal that someone who does like them can later sell into (assuming that the ability to sell later on is something that goes into the initial purchase decision). The General’s Series was much smaller and less costly and seems to be holding up OK. But you have the military and historical legacy angles working there which you really don’t with the 1st Ladies.

  5. I have a full set of First Spouse all Proof and a few extra items. I am looking to sell the entire collection for a fair price. There are various grades, eg MS69 MS70 Cameo and 1st Strike. I am not going to get into the various gradients as I know they are all a minimum of MS70 and the purchaser is welcome to a profit on the upgrades.

    Where is the best place to get a fair value for the coins? I am wondering what a usual discount is for a purchaser of such bulk coins. Coins are safely tucked into safe deposit boxes; also have other coins to possibly add eg, curved baseball glove commemorative.

    • Bill: The secondary market for all the coins you mentioned is not robust and most dealers who sell this material are generally not interested in buying it. The primary selling venues for these coins are via auction. I would look up your coins on multiple auction sites such as eBay and Great Collections. See what the coins bring and what you can expect. Good Luck

  6. It depends on why you are buying. None of these coins are really common, but gold expensive, limiting the collector base.

    On the other hand, if you are a bullion buyer, which is better to buy? A one ounce US bullion coin at around a $60-70 per ounce premium, of which there are literally millions, or First Spouse 1/2 gold coins, if you can buy them at a premium that is even less than one ounce coins, per ounce? Especially if you figure you sell price at melt?

    Plus you get the fun of at least a few different designs, and the (thin) possibility of increased interest in the series.

    Just different viewpoint.

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