2011 Proof Silver Eagle Sold Out

Gold $10 Expensive Then and Now

By Paul M. Green, Numismatic News November 17, 2011

This article was originally printed in Numismatic News.
>> Subscribe today!

When the American Eagle bullion coin program began in 1986, collectors knew that it would be confused with the historical gold denominations laid out in the Act of April 2, 1792.

In that act the gold $10 coin was called an eagle. It was the highest gold denomination authorized. The $5 was the half eagle and the $2.50 was the quarter eagle. In 1849 when the gold $20 was authorized, it was called a double eagle. All of this was very logical, but since gold coins left circulation in 1933, only collectors today are familiar with the historical terms.

On the other hand, there is no logic to the American Eagle name. It is simply a flag-waving program marketing tool.

Investing in Gold Online Seminar Gain a few smart and safe tips about becoming familiar with gold! Get your seminar today!

There is no such thing as a half American Eagle. You have to sort the individual coins out by dollar denominations, or use even longer descriptions of the weights.

There is something to be said about the simplicity of the creation of 1792.

The Founders thought the eagle system was so obvious that no dollar denomination was even put on the first eagle coins. In law certainly it was worth $10, but the coin did not say that. Its value was simply as a known weight of gold of a specified fineness.

However simple the system was as a legislative matter, in practice getting a gold coinage started in the United States was anything but simple.

The early gold eagles of the United States are a fascinating although short-lived group. As a large gold coin, the early gold eagle was not heavily saved and that coupled with usually modest mintages makes the early gold eagle a tough coin even for a type collector today. That said, the early gold eagle is still a collection some collectors might want to attempt, because with relatively few dates but a number of varieties, the early gold eagle is a collection that is possible to complete if you have funds in your hobby budget. Even if you are limited to one or two coins, the early gold eagle is an interesting coin to study.

It was no accident that the 1792 act stopped at the eagle. The United States was in no position to try making double eagles or other larger denominations. After all, at the time the gold supply was uncertain. There were no mines in the territory of the United States. To the average American a $10 coin was a substantial amount of money, anyway, so there was probably a general view that no higher denominations were either possible or needed.

In fact, simply finding a way to produce the gold eagles that were authorized would prove to be an adventure as back in 1792 there was not only no gold to use in making the coins, but no U.S. Mint where they could be produced. The matter of establishing the mint came first with Thomas Jefferson, who as secretary of State was responsible for it rather than the Treasury secretary. That process actually moved along quickly and by 1793 the facility was ready to begin coin production.

Having a facility and producing gold coins, however, were two very different things. In 1793 gold and silver coins were not even an option. The law required that a $10,000 bond be posted before producing gold or silver coins and the officials who were supposed to post the bond were balking at that requirement. It was simply too high.

For Jefferson it was probably another headache at a time when the Mint seemed like an endless stream of small problems. While he worked on getting the matter of the bond settled the Mint did all it could do, which was to produce copper large cents and half cents. Bond requirements for the copper coinage were far lower.

By 1794 the matter of the bond was settled and in the second half of the year the first attempt was made at producing silver coins. That attempt was to produce a silver dollar, which was perhaps jumping the gun a bit, as at the time the equipment was only capable of producing coins up to the size of a half dollar. Potentially the gold eagle might have been a problem and a silver dollar was definitely a problem, but they started with the silver dollar anyway and that saw a mintage of just 1,758 pieces. It was a very unusual number and the likely reason is that an attempt was made to produce more, but 1,758 were all that could meet rather modest quality standards. The rest were melted. The surviving 125 or so 1794 silver dollars in collector hands today show there were problems as the alignment is sometimes not perfect and the strikes are usually light.

That attempt was followed by a half dollar production that seemed to go better and a half dime mintage which while dated 1794 was probably done primarily if not totally in 1795. At that time they were ready to take a stab at producing gold coins. Perhaps learning from their silver dollar adventures, the smaller gold half eagle was attempted first followed by the gold eagle with a Robert Scot Liberty Cap obverse and a small eagle reverse.

From what we can tell examining the 1795 gold eagles, it appears that there were four pairs of dies prepared for them, but only three were used at the time with the other being used in 1796 or possibly even 1797. We see that the mintages for the type were all small with the 1795 being listed as 5,583 pieces along with 4,146 for the 1796 and an estimated 3,615 for the 1797 – although that 1797 total is really an estimate as that year saw an additional 10,940 pieces depicting the new large or Heraldic eagle on the reverse. At the time, however, a precise division based on the reverse design would have not been a high priority, meaning we can only estimate totals.

With the small total numbers and their historic importance, the first small eagle reverse gold $10 is going to naturally be a very desirable coin and a tough one. There are two main varieties, one with 13 leaves and a tougher one with just 9. The more available 13 leaves variety lists for $28,500 in F-12 while the 9-leaves variety is at $30,000 in the same grade. The higher up the grading scale you go, the wider the differences in prices.

The differing numbers of leaves on the 1795 is typical for early $10 gold coins as the goal of the Mint was simply to produce as many coins as fast as was possible. Having all those coins precisely uniform was definitely a lesser concern and we see that as the dies of the 1795 showed two with 13 leaves while the other used in 1795 had 9 with the one used later having 11 leaves.

Not only was the 9-leaves variety just on one die, it appears to have had a very poor survival rate. Some estimates place the number known at perhaps 20 pieces, which would make it on a par with the 1798/97 repunched date with 7 stars left and 6 stars right as among the toughest of the early eagles. The estimates are that the 9-leaves variety might have had a mintage as low as 500 pieces, but whatever the cause of its scarcity the fact is that the Professional Coin Grading Service has graded just 12 as opposed to the 13-leaves variety, which it has graded 211 times. One interesting but hard to explain fact is that 7 of the 12 graded 9-leaves 1795 eagles were called Mint State.

In fact there are Mint State 1795 eagles available at a price. In a grade like MS-65 the estimate is one might command a price well over one-half million dollars with any grade higher likely to bring in excess of $1 million. The problem is that not only are there relatively few examples in Mint State, but those there are usually come in grades of MS-63 or below and they oftentimes come with light strikes or Mint-made adjustment marks that while not changing the technical grade have a definite impact on the eye appeal of the specific coin. Realistically those with budget restrictions will find that some circulated examples are quite available in upper circulated grades as these early eagles did not circulate enough to end up with heavy wear in most cases.

The second year of production saw an official mintage of 4,146 and an unusually low number of varieties. To obtain a 1796 today you can expect to spend $27,500 for an F-12 although very few grade that low, meaning you more likely to being paying $50,000 for an example in XF-40 where they are available.

The 1797 with the small eagle on the reverse is a complicated situation. The mintage of 3,615 would make it tough, resulting in an F-12 price of $31,500 while an MS-60 is $200,000. Interestingly enough the 1797 has a characteristic seen on most which is a die crack from about the 4:30 o’clock position to Liberty’s chin and most exhibit that crack. In the case of supplies in top grades with or without the crack the numbers are low with NGC reporting just 9 examples in Mint State and none better than MS-63. PCGS reports similar results.

The 1797 mintage featured the first large eagle reverse and that if the estimate is correct was the first gold eagle to have a mintage over 10,000. Higher mintages would follow, making the type more available with an F-12 type coin at $9,800 while an MS-60 would start around $58,000. In Mint State the more available dates are likely to be from 1799-1803, but like the earlier small eagle variety there can frequently be light strikes or adjustment marks. Finding a coin with a good strike and no adjustment marks will likely mean a premium price, but they are worth it.

The 1798/97 is an interesting date as it comes with either 9 stars left of Miss Liberty and 4 stars right on the obverse or 7 stars left and 6 right. The reported mintages of the two were 900 and 842 respectively which would make either quite elusive as is seen by the $13,500 F-12 price of the 9 and 4 star variety while the 7 and 6 star variety is $28,500 in the same grade. The best estimate is that the more available 9 and 4 star variety might have a population today of 100 pieces.

In the case of the 7 and 6 star variety the number known is much lower. To date PCGS reports just 7 examples as opposed to 33 for the 9 and 4 star variety. The NGC totals are similar with the 7 and 6 star variety having been graded just 4 times while the 9 and 4 star variety has made 30 appearances. While grading service totals are not to be taken as the final word on scarcity, they are a guide and from these totals it would not be surprising to find that there are fewer than 25 known examples of the 7 and 6 star variety. Even the 9 and 4 star variety looks somewhat tougher than the old estimate as early gold eagles are coins that are likely to be sent in for grading yet the two services combined can only account for potentially 60 coins, suggesting that an estimate of 100 may well be on the optimistic side.

The more available dates of the type start with the 1799, which had a mintage placed at 37,449 pieces. This at the time was easily a record for gold eagles. In availability, the 1799 is similar to the 1801, which had an even higher mintage of 44,344. Just because they have higher mintage does not mean that either the 1799 or 1801 is common.

In upper grades no early gold eagle can be taken for granted as available and that is especially true if you want a better strike and no adjustment marks. There are Mint State examples especially of the 1801, but in grades beyond MS-63 the numbers known are extremely small and usually the appearance of any nice coin at auction will produce strong bids from those who know they are unlikely to have many chances at a truly premium quality example of an early gold eagle. Other dates from the period are tough as might be expected. The 1800 had a reported mintage of 5,999 although the suspicion is that the total might well have been slightly higher. Even so, the 1800 is at $9,500 in F-12 and $39,500 in MS-60, making it slightly more expensive than the more available 1799 or 1801, but it at least can be found with some regularity.

The 1803 is another date that based on its reported mintage of 15,017 seems slightly more available than might be expected. The reason for its seeming availability may in part be the limited number of collectors for the complete set. The lack of collectors makes for a very limited demand for some of the slightly better dates as a type collector will normally opt for the more available dates in higher grades, leaving dates like the 1800 and 1803 to those attempting a full set. For the small extra premium, dates like the 1800 and 1803 are probably excellent values.

The 1804 is a special situation as with its mintage of 3,757, which is thought to be correct, would make it a tougher date. Certainly it is tougher, but there is an added featured in that it is linked forever to the famous 1804 silver dollar as both had their production suspended in 1804.

The most important difference went back to the practice of the time of using dies until they wore out sometimes using those with dates that where different from the year in which the coins were actually produced.

When officials in the 1830s sought to make proof sets to be used on a trade mission for presentation to the Sultan of Muscat and the King of Siam, the records suggested that the last silver dollars and gold eagles made had been produced in 1804. What the records did not show is that the gold eagles produced that year were actually dated 1804 while the silver dollars had been produced with 1803 dated dies. The order in 1834 to make a few proof 1804 gold eagles and silver dollars consequently resulted in the creation of the first silver dollar with an 1804 date.

What is not as well known is that the order to make the special 1804 gold eagles and silver dollars also resulted in the creation of a new variety of the 1804 gold eagle as the original 1804 gold eagles had a crosslet “4.” Those original 1804 gold eagles with their famous date and low mintage are tough today with a price of $16,500 in F-12 while an MS-60 is listed at $92,500. In any grade an 1804 gold eagle has to be considered special.

The special 1804 gold eagles produced in 1834 for the special proof sets turned out to be slightly different from the original in that they have a plain “4” in the date and not the crosslet “4” seen on the originals. We cannot really be certain of the number of plain “4” 1804 gold eagles but it stands to reason that the total is unlikely to be higher than the number of original Class I 1804 dollars. That total would be safely below 10 and in fact checking the number seen in recent years suggests that the number known may well be just four pieces. That actually makes the plain “4” 1804 gold eagle tougher than an original 1804 dollar although the price would not indicate that as the Eliasberg coin sold in 1982 for a price of $33,000. Of course that was many years ago, which would certainly mean a much higher price today although it would asking a lot to expect a plain “4” 1804 gold eagle to bring a price equal to or higher than one of the original 1804 dollars. That said, at some point in the future do not be surprised to see a plain “4” 1804 gold eagle grab some auction headlines with a surprising price. In the meantime time, in Coin Market an MS-60 lists for $400,000 and an MS-65 for $1.75 million.

Certainly the future seems likely to continue to show that early gold eagles are an extremely important group with rising prices especially in Mint State. Not many collectors can seriously attempt an upper grade collection, but with early eagles available in an assortment of grades it would seem safe to suggest that they are an early American numismatic treasure that many can hope to obtain as a type coin and as a group, well, we all can study them as they were a true reflection of their era.

Anniversary Sets Sold Out

What’s Weakness in Silver Telling Us?

By Harry Miller, Numismatic News October 14, 2011

This article was originally printed in Numismatic News.
>> Subscribe today!

While I remain bullish on metals simply because of worldwide monetary problems, we should consider the other side of the coin. There is a good case for deflation as we approach another probable recession. John Q. Public never came out of recession, especially when you consider the 16-20 percent who are unemployed or underemployed. Look at silver and especially platinum. They seem to be indicating something more than a correction.

Investing in Silver Online Seminar This online seminar recording is a great source of sound answers to questions about investing in silver. Get your seminar today!

Silver is now at over a 55-to-1 ratio versus gold. Platinum, which historically trades in the 1.1 to 1.4-to-1 ratio over gold, is now at .9. Now those kinds of numbers could be indicating deflation since the markets currently view both silver and platinum as industrial metals. Gold on the other hand is still very much monetary especially with continued central bank accumulation.

Another factor is forced or involuntary liquidation. COMEX raised margin requirements Sept. 30 on gold, silver and copper because of market volatility, or was it pressure from the Fed?

Often repeated in the financial news is that traders who have been hammered in the stock market are liquidating precious metals to raise cash and take profits to add liquidity to their portfolio. Now when you consider some of the big hedge funds like that of John Paulson, this is quite plausible since his fund and others have taken some big hits in the financial sector. Hedge funds must remain somewhat liquid, especially when they are not showing steady gains for their clients because people usually pull money out at that time. Now if you run one of these funds and need to quickly raise millions, what is the quickest most expedient way? Liquidate precious metals positions. If the market turns, you can be back in almost instantly.

I think when the economy gets squeezed a little more and financial markets remain weak Ben Bernanke will invent a new tool to increase liquidity and prime the presses. After all, next year is a presidential election year and it’s all about the money. That is when we will see renewed interest in precious metals.

There has been an interesting increase in the premiums for generic USA gold type coins in the last month. They are still down in most cases, but they are down far less than bullion.

This month along with many others we did a complete review of state quarters and unfortunately the numbers are not good. There is a lack of interest in this series and almost no promotional activity to support the market.

Coins and Panetta’s Biggest Fear

By Wayne Sayles on September 20, 2011 3:11 PM

Posted by Mint News Blog | Filed Under: Silver Eagles

The Coin Analyst: Finding the Best Silver Values in Today’s Heated Metals Market

By Louis Golino on September 15, 2011 11:50 PM

Back From The Dead: Formerly Unpopular Gold Coins That Have Become Popular

By Doug Winter on September 6, 2011 8:54 PM

 

High Gold Not at Peak Yet

By Patrick A. Heller August 23, 2011

As I write this Tuesday morning, the price of gold has topped $1,900 overnight for the first time ever. Thus far in the month, gold is up almost 16 percent and silver more than 7 percent. This is definitely not a normal August for precious metals.

The typical August is part of the summer doldrums, where gold and silver prices are relatively stable. Many people are on vacation. There are no special gift-giving times in Far Eastern nations. Jewelry manufacturers usually don’t place holiday season precious metals orders until September. There is a feeling that one can always wait until tomorrow or next week to trade gold and silver.

Since gold and silver have been so strong this month (and in absolute terms), it is fair to ask if prices are near a peak.

Investing in Gold Online Seminar Recording Gain a few smart and safe tips about becoming familiar with gold! Get your seminar today!

In my judgment we are nowhere close.

In other articles and newsletters, I have detailed global financial crises that are now growing worse on almost a daily basis. These problems are not getting genuinely fixed. As a result, the financial uncertainty will continue to prompt more people to seek the safety of gold and silver. However, there are several fresh developments that indicate prices could continue to rise.

Even as the spot price rose in COMEX trading yesterday, the number of open silver contracts rose about 5,800. This is a sign that one or more major players are taking on JPMorgan Chase’s short positions by snapping up any new short contracts that are offered for sale. This implies that JPMorgan Chase’s previous tactic of shorting silver contracts without owning the physical metal is no longer successful at driving down the price. Instead, what will likely happen now is that more buyers will come into the market.

On Aug. 12, the latest Thomson Reuters/University of Michigan preliminary August indication of consumer confidence reported the lowest level since May 1980. The U.S. Dollar Index continues to trade within 1 percent of the 73.70 level which would give a technical signal for the U.S. dollar to quickly fall further in value.

There is widespread negative public reaction (and that is stating it mildly) to the revelation of how much the Federal Reserve secretly loaned to major U.S. and foreign banks in 2008 to avoid the collapse of the banking system. Altogether, the Fed advanced up to $1.2 trillion at the peak on Dec. 5, 2008. According to Bloomberg, this amount exceeded the combined profits of all federally insured U.S. banks for the entire decade through 2010. It also dwarfed the $46 billion of Federal Reserve crisis lending on Sept. 12, 2001, the day after the attacks on the World Trade Centers and the Pentagon.

The top beneficiaries were Morgan Stanley at $107 billion, Citigroup at $99.5 billion and Bank of America at $91.4 billion. Among the top 30 borrowers, the Royal Bank of Scotland received $84.5 billion and Swiss bank UBS borrowed $77.2 billion. Even Germany’s Hypo Real Estate Holdings collected $28.7 billion.

What the public may be sensing from this new disclosure is just how precarious the global banking system really is. People are literally alarmed at the size of the bailouts and also that the details were kept secret. It leaves them uneasy about just how much other bad news the U.S. government is hiding today.

The strongest indicator to me that we are not near peak prices is the behavior of our customers. At previous major market peaks, there was a frenzy of the general public rushing to buy gold and silver – with little attention to due diligence. Although there are more people buying precious metals every day, it is nowhere near a frenzy. Also, the buyers still tend to be those who have done their due diligence to understand why they are buying. They are not just buying because the news is reporting gold at new high prices on almost a daily basis.

In contrast, we are repeatedly setting records for the largest number of customers selling gold and silver to us in a single day. The sellers today, however, are often seeking cash flow to help pay the mortgage, utilities, or for food and are taking advantage of the higher metals prices. We had long lines of customers selling precious metals to my company at the peak in late 1979 and early 1980, but they were then mostly taking advantage of unexpectedly high prices rather than necessarily seeking to help put food on the table and a roof over their heads.

I don’t expect gold and silver prices to peak until we see the general public seeking to buy gold and silver simply because the prices have been rising. We are not close to that point yet.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at CoinUpdate (http://www.coinupdate.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).

« Older Posts — Newer Posts »