my trip to the coin dealer today

After reading that the spread between old U.S. Gold coins and bullion gold has really tightened up over the past year, I thought I would take advantage of this relative "sale" (so to speak) on old U.S. Gold Coins and pick up two U.S. Twenty Dollar Gold Pieces for my type collection.

Today, I made a trip to my local coin dealer in an attempt to find some new treasures. I was looking for gold coins that had a lot of visual appeal and original mint luster.

For the St. Gaudens hunt, I picked through about 30 raw and about 30 graded uncirculated coins. I was surprised how many of the raw supposedly "uncirculated" coins looked like they had been cleaned (with what looked to me to be hairlines). And amongst all the raw and graded coins, original mint luster was hard to find. Most of the coins looked sort of flat and lifeless (perhaps from over-dipping?). Fortunately, the dealer had two NGC graded MS65s, which I thought were beautiful and very lusterous. When I asked the price, he told me $2,295, which I thought was great (was expecting higher), so I picked the best one of the two MS65s. Here is a photo, which I just took with my iPhone (the composite image was done in Adobe Photoshop).



For the Liberty Gold hunt, I also picked through a pile of raw and third party graded uncirculated coins and once again noticed that a lot of the raw coins (and even some of the lower graded TPG coins) looked like they had been improperly cleaned (with those tell-tale hairlines again). That must be a common problem. However, one of the raw Liberty coins in the batch really jumped out at me and appeared to have really nice luster (and no obvious signs of improper cleaning). Because that coin was in the dealer's raw uncirculated bin, it was priced at $1,628 (wow!) only about $150 over the melt value. The only other Liberty gold coin that I liked was an NGC graded MS64 dated 1904, however the price of that was over $2,800 -- and I honestly liked the raw 1897 more, as it had a lot more luster and very clean fields. Here is a photo ...



So I ended up buying an NGC graded MS65 1925 St. Gaudens for $2,295 and a raw Uncirculated 1897 Liberty for $1,628. I believe I got a really good deal on the Liberty coin as I thought it looked as nice as (maybe better than) all of the NGC MS63s and even some MS64s. If I could get NGC to slap a MS64 grade on this coin, I could make a substantial paper gain (not sure if that is realistic or not).

The dealer was telling me that very high grade (MS64 and MS65) $20 Liberty Gold coins are quite a bit more rare (and thus a lot more expensive) than similarly graded St. Gaudens Gold because the Liberty Gold actually circulated (with fewer saved) while the St. Gaudens (especially those dated in the 1920's) were often saved and didn't circulate. That fact never really occurred to me, although it makes perfect sense.

Looking at the NGC-slabbed price guide for $20 gold coins of these dates, it's clear how this dynamic does affect prices. In MS62 condition, the prices between these 2 coins are nearly identical. But when you get to MS65 condition, an 1897 Liberty is valued $15,000 more than a 1925 St. Gaudens (holy cow!). By the way, based on the prices I was getting at the dealer, clearly you have to knock these NGC referenced "values" down by 10% or more to get what these coins actually trade at.


In any case, I was so happy with my pickups today, I thought I would share my little adventure.

 

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Congratulations, WL ! I'm happy for you. Yes, those are awesome type coins.

Surprisingly, this is a good time to buy those sort of coins. After WW 1, the US bailed out Europe with mountains of US gold, mostly $10s and $20s. With spot so high, Euro banks are breaking out all that US gold and selling them back over here. This is creating a bit of a glut and keeping prices relatively low.

 

Looks like some great pickups.

 

good buy on the Stants

 

I would say you scored. Especially on that raw 1897 Liberty Head, a beautiful coin at a great price. Love the Saint as well, one of my all time favorite designs.

 

nice coins,,, I think the question will be , will you be happy with that price 5 , 10 ,20 years from now ????????

LOL... the anwser can prob go both way no one knows the future only time will tell

 

Wonderful pickups and 2 dream coins I would love to have gold wise.

 

Liberty Gold is a fabulous design and you didn't do too shabby when you plug in the "spot" price. Congrats on some marvelous additions to your collection....

 

Hey thanks for all the great and positive responses!

900Fine, interesting note about European Banks. I had no idea. Where do you find out this stuff?

Coppertop, one thing I didn't mention, is I actually sold three 2009 American Gold Eagles (which I bought for roughly $1,000 each in late 2009) to the dealer to fund this purchase. I bought a pile of AGE's as an inflation hedge in 2009 and wanted to take advantage of the tightened spread between bullion gold and old U.S. gold. And although I LOVE bullion as a way to make a lot of money, it's not very interesting or romantic (and doesnt really tickle my coin collectiing fancy). So technically, I didnt really pay as much out of pocket. The three AGE's that I bought for a smidge over $3,000 in 2009, I sold to the dealer for $4,446. So with the proceeds from my sale, I bought these 2 gorgeous old gold coins and walked away with $523 in my pocket. So I guess that means I actually paid $2,477 for these two gold coins, an outlay in cash that was actually made in late 2009. (What does that work out to ... $1,239 for each coin?). Ahh, the joys of having lots of bullion in an inflationary environment!


By the way, does anyone know the best way to edit out the NGC holder clips from coin rims when photographing NGC slabbed coins? I have been struggling with that.

 

Simply beautiful.

 

Winged i think you were wise to secure your investment by selling the newer bullion coins to and secure it in highgraded numatic values coins

That liberty you def scored on that one... I wonder if its BU ( ms-60 through ms-63 ) looks really nice at that price.

If i were you i'd try to resell them both...
1850-1900 for the liberty
2550-2600 for the guadens

then go back and buy some more.
You would be surprised how many people just pay book prices.. You could list them on heritage , i think the BUYER pays the 10% prem...

this 1897 liberty ms-61 is already selling for $1525 on ebay with a day left ... it will prob do $1900... lets keep a eye on it,,.

 

Coppertop, the funny thing is, I can buy and sell bullion easily, it's all pretty much the same and I have lots of it. However I have a really HARD time selling unique and/or interesting numismatic value coins that I like (I enjoy looking at them too much). I can count the rare coins I have sold in my life on one hand. I do think you're right though, we (I) could make a lot of money selling the good stuff on eBay (esp. after scoring a good deal).

It's bizarre, I am ALREADY attached to these two new gold coins and I have only owned them for about 10 hours. I honestly don't think I could sell them. I guess I am just another coin addict. Add me to the long list of 12-steppers on this board.

 

Awesome! I have been dreaming about picking up a double eagle again. I have my eye on a 5 dollar Indian too. But have to put it all off until I get my most recent MPC paid for. Congrats again. Your post was nice to read. I liked all the detail.

 

Sunflower, funny you mention the $5 Indian. I tried to buy one of those yesterday as well. But looking through the dealers selection, I could not find one I really liked. (I actually bought a $2.5 Indian off eBay a little while back, but ended up returning it.) One of my problems was how often the TPG slabs obscurred part of the coin -- I just didnt like the effect. Another problem was how some of the Indians were struck off-center so part of the design or date was missing. I think finding a well-struck, well-centered, Indian with original mint luster might be a hard find -- and the TPG slab issue is a bit of a problem (for me at least) with these smaller coins. In any case, good luck with your future hunt! (And cool that you collect MPCs, they are interesting to look at)

 

WingedLiberty
Vary nice coins.

The only way I have been able to not show clips in photos is to crop coin image just inside of clip. You loose some of the rim but in most cases you will have a nice picture. I don't like the clips a all. I would rather loose the edge a little and not have the clips show.
Big Ed

 

Thanks for that BigEd -- I think that NGC should work on refining their slabs so none of the coin rim is obscurred.

By the way, here is the 9 year chart of the "premium over spot" on old U.S. Gold Coins. Premiums are closing in on historic lows of only 10% over spot (where the historical average is more like 50% or more). Some good bargains out there for collectors!

 

I got the e-mail too. I don't get it. They are saying the "premium over spot" is lower. Well DUH! Isn't that because gold has gone up so much?
I mean lets say you have a 1oz gold coin worth $2000 and gold is $1000/oz. My "premium over spot" is 100%.
Ok so now gold goes up to $1500/oz. The coin still costs $2000. Now my "premium over spot" is around 33%.
Does this make that $2000 coin all the sudden a good bargain?

 

No, but I sure can rationalize purchasing it a whole lot better......

 

claygump, think of it this way ...

If you buy an old gold coin for $1,628 and the melt (bullion) value is $1,486 ... then a considerable amount of the "risk" has been squeezed out of the purchase (as you have a hard "floor" very close to the market value of the coin, from the gold in the coin). The other benefit is when premiums get this small (around 10%), as bullion rises, so does the value of the coin because all of the air (fluff) has been squeezed out. So with these small premiums over melt, you basically you have 2 ways to make money, the value can rise due to scarcity and demand, or the value can rise due to bullion price rises.

So which would you rather own?



Or consider this scenerio ...

if we use the same "premiums over melt" on an uncirculated Barber Half Dollar, it would be like we had the opportunity to buy an Uncirculated Barber Half Dollar for 10% over the melt value in silver.

So if you walked into a coin shop today and you could either buy a:

- 1/2 oz. silver round for $21 ($21 melt value) OR
- An uncirculated Barbar Half Dollar for ($21 melt value + (10% premium over melt)) = $23.10

Which would you pop for?



Would you think the Uncirculated Barber Half Dollar for 10% over melt was a good deal?

Most of us on here LOVE coins (the beauty and history) so I think whenever you can find a beautiful piece of history for 10% over melt value, I will always say it's a great deal!

To me, it's sort of like being able to buy a piece of art, a painting or scupture, where the value of the materials (which you could sell anytime) covered 90% of what you paid for the art. You just don't have that much at "risk".

 

Heck, if silver hits $50 an ounce. I will head on up to the Comstock and start working old claims.