Grade Inflation or Why is midrange UNC gold all junk?

John, where's the rub I'm not familiar with this coin type ?

 

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I presume you are referring to the 1838 quarter eagle. This coin was graded MS-63. Look at the area above the eagle’s head. There are lots of scratch lines running in multiple directions. The coin is graded MS-63. That means you are limited to a few marks there, not a patch of marks in multiple directions. This did not make the PCGS standards let alone CAC, which is supposed to be higher.

The dealer wanted more than the PCGS retail amount for this coin. Really? It was off a what list I gave him. He knew he was not working with “a country bumpkin.” He knew I knew how to grade, yet he hit me with this. It ended the relationship.

Classic Head gold is hard to grade because many Classic Head gold coins have strike issues. The issue is, “Is it wear or is it the strike?” That is not always easy to determine, but in this case, there was no doubt. Look above the eagle.

 

I particularly dislike PCGS or NGC CAC coins. I've found CACs to perhaps be problematic. Possibly not all CAC's are this way but I tend to see them as over-hyped coins that can be actually of a lower grade. At the FUN coin show in Jan 2023, I talked extensively with a coin dealer who showed me 2 very pretty 19th century $20 golds. These were NOT the kinds of coins I've seen at online auctions but were clearly (to me) a cut above. Both were ms-63's NGC or PCGS & neither was CAC'd. Unfortunately I didn't buy them.

I have no idea when the coins I look at are graded. I can only say that these are "recent slabs" usually.

 

Actually I've been looking at/for Classic Head gold. I'd say this coin could be a low-end 63 today but I dislike the amount of minor bangs for a Quarter Eagle. Small module coins like this should get less marking than a larger coin: which is why it's hard to find an absolutely unblemished $20.

Still many 63's in $5 Liberties today have a major scuff, often right across the face and still get a 63. This coin has no "major hits" but does have quite a few lite bag marks.

I really don't see wear on the Eagle reverse, but then I'm have to talk to an expert on the 38 Classic Heads. I think latter ones were usually well-struck.

 

Sigh......

 

While I'm not a strong US buyer, for many years all of the US gold and even foreign gold, I've looked at, has been slabbed.

Except for my {past} Aunt of course. She ran a Kielbosa shop and one day got an 1898-P double eagle in change. Her son still has it.

 

Isn't rub on HIGH points, not in the fields ?

How does one recognize those marks as rub and not as random bag marks ?

 

It might be better to start with Morgan Dollars than gold because there are more of them to examine. An isolated hit with no rub around it is a bag mark. A patch of lines which begins to dull the luster of the coin influences one to call the coin “AU.”

Here’s an issue. Which is worse, a tiny rub or a bunch of bag marks? If the coin has eye appeal, IMO, I’ll take the tiny rub and will pay more for it. I’ve seen so-called Uncs. with so many marks that one could not tell if the coin had a rub.

I am on an iPad and can’t post pictures. I will pick this up later with pictures.

 

The Classic Head type of gold (1834 to 1838 ($5) or 1839 ($2.50) is VERY hard to find in TRUE Mint State. Here's the only one I have. It is graded MS-63



This is graded MS-61. It has a slight rub in the left obverse field. Stacks' said "It looks better" in their auction lot description. It does in person.



This is graded MS-61, and it is flat out over graded. It's the very scarce Crosslet 4 variety which is a bear to find. I wanted a piece that didn't "shame" the rest of the set, so I way overpaid for it. This coin was once in an AU holder, where it belongs, but PCGS so fit to give it a grade-flation number.



This 1836 quarter eagle is graded MS-62. The luster is unbroken, but it has a number of small surface marks. It is also a late die state which does not help the grading process. When does the mint surface begin and end? I bought this from the late Cathine Bullowa many years ago. She graded it AU, but told me she thought that it might be Unc.



This is graded MS-60. It's an AU.



This is graded MS-62+, CAC. What do you think?



If midrange Unc. gold is junk, my collection is junk.

 

I think it might have been minted early on a Monday morning? Maybe after a big party weekend?

 

Isn't that why it's a 63 and not a 66 or 67?

 

Designer William Kneass and latter Christian Gobrecht had a lot of trouble with the Classic Head design. Gobrecht tinkered with the bust of Liberty until he replaced the design.

 

I really enjoyed re-reading this, BS, because I just happened to pick up an MS-63 CAC OGH 1923 Saint at FUN 2026 (pics here elsewhere).

A key factor to keep in mind is the supply availability in all the grades AND in the aggregate. You have 3 types of buyers for most PM coins, but especially for pre-1933 gold:

• The Registry buyers....price-insensitive, often determining pricing in all the Mint State grades and sometimes lower if total supply available is very small (i.e., Type 1 DEs or Fab Five Saints). Might only be 500-1,000 "serious" players here, give-or-take.

• Type Collector buyers....individuals here can buy 1 or 2 coins.....or dozens. 25,000 to 50,000 potential buyers here maybe with an average of 5-10 coins (or maybe more).

• Investment buyers.....the largest pool but will ONLY buy if at gold bullion melt or close to it. Don't care for numismatics, just want to hold gold...might be OK paying a 3-5% premium for a few coins but that's it. Price-sensitive.

If the Registry guys can't find enough coins to satiate their demand...the price for the other 2 groups will be prohibitive and either eliminate them or cut them back in quantity and frequency of purchases. If Type Collectors aren't satiated....then the Investment buyers and tele-marketers and info-mercial people won't be able to sell/buy the coins as bullion subsitutes (think Fairmont TV commercials).

 

You could make a case that the standards have TIGHTENED in recent years, GD...especially with CAC.

Do you have any thoughts on CAC as a "check" on the TPGs ? How about CACG as a viable 3rd TPG with an (early) reputation for being very methodical in clinging to a classical approach to grading ?

 

I think CACG PO'd a bunch of dealers.

These were people who thought they had a good relationship with the stickering operation. Thought they knew what was being looked for. And submitted a bunch of coins early on to cross over and reap the benefits of a "better" grading service.

And they got absolutely slaughtered in their first submissions.

One dealer took his lumps... took three shows to sell what he could and he wholesaled a bunch of it at a loss. Now he's back submitting only to PCGS. If he can buy it for fair money he will certainly buy a CACG coin and resell it but across his four cases at the shows there's only a tiny handful. 90% is PCGS.

What's also interesting (but he won't discuss it) is it used to be 50/50 PCGS/NGC...

 

You know.....
Funny how Künker will grade a coin with following description.
Frankreich
AV 20 Francs 1812-A
Pairis Mint
Napoleon I

In USA holder from NGC graded MS-65/ Vorz.+ (EF+)
Thus German EF+= USA MS-65 go figure, I agree with German standards.

 

Early on many people were submitting previously graded coins that were Mint State and they were coming back as AU or even Details.

Minor blemishes -- like rub on a single high point -- that were maybe "net graded" by positive offsets like great luster...were now dropping coins into an entirely different grading bucket (AU vs. MS).

Perhaps some here who deal with CAC and CACG can opine further.

 

Not in my opinion. As gradeflation has continued, CAC sticker system has gone along with it. Please refer to my #20 post.

That coin IS NOT an MS-63, and the market agreed with me. The dealer who offered it usually sells coins within hours or days. That one hung around in his inventory for over three months. He wholesaled it at Winter FUN.