It’s chilly but the markets for bullion and rainbow coins are hot
By Jim Bisognani – NGC Weekly Market Report ……
After being greeted with a rather chilly 44 degrees this morning, my burning question is: How did summer slip by so fast? I mean, Labor Day is around the corner, kids are back in school and the NFL will be kicking off its 100th anniversary season opener September 5, which happens to coincide just with the start of the final Long Beach Expo for 2019.
It sure doesn’t seem like it, but I have been a numismatic nut for over half as long as the NFL has been hurling bodies at each other. My earliest memories race back to the summer of 1966. This was the real start of my numismatic indoctrination with a family search for an elusive 1955 Double Die Lincoln cent.
My mom was sure she had one among the thousands of coins she had received in tips as a waitress. Mom had kept all the change in a huge glass decanter — the thing came up to my waist! Yes, I did find that 1955 Double Die. If you’re a glutton for the full story, you can read it here.
Considering that school is now back in session and many numismatically driven people will have a bit more free time, I thought a bit of Coin Theory 101 would be an apropos topic.
Since I was a mere youth, I have been a collector first and foremost; I still have most of the coins I bought or traded for over the last five decades. Really, the only coins that I don’t still possess were sold because I needed the money at the time.
I was never wealthy and always have selected coins that appealed to me and my budget. I always was careful in selecting my coins. Whether a few dollars or several hundred dollars, I really had to like what I was purchasing.
In the beginning, my passion was Lincoln and Indian Head cents, commoners and semi-keys. The first key coin I acquired was a 1909-S Lincoln cent. I was 14 and was attending a local coin show, which was held the last Sunday of the month. As it turned out, the dealer I bought it from was from my native Portsmouth, New Hampshire. A lovely VF+ coin — smooth and medium brown, with just a hint of that typical wood-grain texture to add to the appeal of the coin and the price — was $20.50.
“Where Particular Collectors Shop By Mail”
I also had a passion for world coins, but it was hard to get any collecting traction because the dealers attending my local monthly show filled their cases predominately with US material. This is when I found that the various ads in Coin World were always exciting and enlightening and I gleefully absorbed those of the various world coin dealers. One such dealer was the world-renowned Aubrey Bebee out of Omaha, Nebraska.
There in the Heartland, I would order several of the “world collector type sets,” some from well-known countries and some rather obscure nations such as Saarland. I recall each set would arrive in soft, pastel-colored envelopes with the typed descriptions of the set and with the contents carefully wrapped in tissue paper.
Although Mr. Bebee is better known as the man who paid the then-record price of $46,000 for a 1913 Liberty nickel and for possessing one of the finest US currency collections (which he and his wife, Adeline, later would proudly donate to the ANA), it was Mr. Bebee’s world coin ads that excited me. They were exactly what I was looking for — diverse and affordable. He offered everything from complete runs of South African Proof sets to British Trade Dollars to modern proof issues.
I had the pleasure of meeting Mr. Bebee at my first ANA. It was in 1973 at the 82nd big shindig in Boston.
His ad slogans included “Buy where you get the best for less — at Bebee’s (where else)!”; “You will become Bebee Booster”; and “Where Particular Collectors Shop By Mail.” The last one really cinched it for this 11-year-old. I was certainly a particular (and peculiar) collector!
Back to the Future
The collector coin market continues to be very active late this summer. I note solid demand, especially for semi-key and key-dated late 19th through mid-20th-century series.
Also, unless you have been under a rock, you are surely aware that the metals market remains ablaze. As I sit at my desk today, gold has topped $1,540 per ounce (for reference, it has been nearly 6 ½ years since the yellow metal achieved those heights) and silver has barreled over $18 per ounce after having last breached that level two years ago. Needless to say, demand for bullion and semi-numismatic coins has spiked. Any movement will attract and prompt action in the marketplace. Yet remarkable values abound, especially for many Mint State half eagles, eagles and double eagles!
The Rainbow Connection
But the top-tier coins, those in the $100K-and-up category, have been a mixed bag. While this segment will generally encompass the ultra-rare and iconic numismatic delicacies, my feeling, unfortunately, is that over the last 15 years, too many of the truly rare coins have been “marquee bait” that recirculated throughout major auction venues.
As many of these coins made the rounds more frequently than an ER nurse, with each appearance their number of interested buyers has dwindled. Consequently, the prices realized have generally declined, in many instances by 10 to 20% or more.
My advice, if you are in the market at this price point, is to be diligent and do yourself and the hobby a favor — buy rarities and keep them in your collection! A coin that is rare will always be respected and a highly valued asset and investment. Unless a financial necessity emerges for the owner, it should be held for a decade or more.
Another interesting market segment is the one occupied by majestic rainbow patinated wonder coins. Most collectors have enjoyed owning attractively toned coins, and today it is a much more competitive and lucrative market. There is no denying the extreme value bestowed on those outrageously original, toned coins, and since there is no definitive “price guide” value, it is more of a judgment call as to what sets the average rainbow apart from the aurora borealis.
My first recollection of an encounter with a “rainbow connection” coin (and the mega perceived value) was over 50 years ago. It was in the fall of 1968 and, after school, I was at my favorite hangout, the Dolloff Coin Center in Portsmouth. It was then that I spied the colorful treasure.
Mr. Dolloff had placed it in his very first showcase. There it was — an otherwise-pedestrian Lincoln wheat-backed cent from 1956. Yet, as I peered into the well-lit showcase, I immediately felt my jaw drop a bit. The reverse was mesmerizing. Every color imaginable seemed to dance before my eyes as if gazing at a tiny oil slick. I had never seen anything like it before!
Well before the slab era, the coin was housed in a mere EZ-seal 2×2 cardboard holder. The description printed in a neatly calligraphic style read: “Incredible Rainbow Toning VERY RARE” the price — $12,000! This was easily the priciest coin I had ever seen!
I thought about that coin quite often, not because of the price but because of the undeniable allure of the color! Each time I would venture back into the shop to participate in the weekly “bid board” auction, etc., I would glance over at the first showcase and make sure it was still there.
After a few months had passed, I asked Mr. Dolloff why the rainbow Lincoln cent was so much more valuable than others of its kind? Was it just because of the color, I wondered? I mean, a regular Gem Uncirculated 1956 cent was at best a 25 cent coin at the time.
His answer was that a lot of the coins from US mint sets had developed some interesting color from being housed in the cardboard holder they came in. Yet he had never seen one as dynamic as this 1956 — it is the only one like it he had ever seen. When I asked how he arrived at the price and was it worth that much, he replied, “I just put that price on it. Who knows, someone someday may pay that for it.” I often wondered whatever happened to that coin.
Now, with highly patinated wonder coins capturing record prices, a lot of collectors are carefully revisiting some of their own collections, and dealers are scouring their inventories looking for those special colorful coins.
Now, in many instances, folks vying for top registry sets, etc., have fallen hard for the marvelous toning, too. While Morgan dollars have always enjoyed a tremendous following, those tracking down and assembling a “rainbow connection” of Morgans have shown nearly equal enthusiasm.
They received a big push into the limelight courtesy of the famed “Battle Creek Collection” of Morgan dollars, all of which were graded by NGC back in 2005. In total, 10 bags (10,000 Morgans) were submitted for grading and a sizable 16 percent (1,606 coins) were found to have special attributes. Those with vibrant rainbow toning were given the “Battle Creek Collection” pedigree label. Many of the coins look like incredible works of art!
Conversely, I believe that any one of several of the Battle Creek Morgans would beat the eye appeal of the recently sold 1938-S MS 68+ FB Mercury dime that raced to $364,250!
A Million-Dollar Rainbow?
A challenge to that throne could easily be posed by the kaleidoscope inferno of color found in a truly special 1926 Oregon Trail Commemorative that captured $69K over 15 years ago.
It was April 2, 2004, at the Superior Galleries Santa Clara sale consisting of only 266 lots, and this 1926 Oregon Trail (then graded MS 67) was scheduled for just a handful of lots before the end of the auction.
When the auctioneer announced this fabulous coin, spirited activity ensued in the room and, as the bids escalated, there was raucous applause, culminating with a standing ovation as the hammer fell. I believe this is a still-standing record for any mint state classic silver commem. The coin proudly resides in the NGC Registry as part of the J&L Commemoratives collection, and the owners have vowed that it will remain there during their lifetimes.
Who knows what that marvelous coin will bring 20 to 30 years down the road? Certainly, coins of this caliber carry a justifiable premium. But how much?
Could there be a million-dollar rainbow coin someday? Certainly, the answer, for now, is that the price will be predicated on the competition aroused for each example as they appear at auction.
Until next time, happy collecting!
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Jim Bisognani is an NGC Price Guide Analyst having previously served for many years as an analyst and writer for another major price guide. He has written extensively on US coin market trends and values.