By Doug Winter – RareGoldCoins.com

For many years, it’s been no secret that I haven’t been a big fan of the 1857-S double eagles that trace their origin from the famous S.S. Central America shipwreck. I’ve written that price levels of these coins haven’t made sense to me and I’ve have had problems with their appearance. More than a decade after they were first released onto the market, has my opinion changed?

I believe that this is (finally) a sensible time to purchase an S.S.C.A double eagle. But there are some important parameters for the collector to follow when considering a purchase. Some of these are as follows:

1. Be Selective. There are over 5,000 1857-S double eagles from this shipwreck and they range in grade from Extremely Fine to Mint State-67. With this wide variety of grades, there are a tremendous number of coins to choose from. At any given major auction, there are typically three to five available and it isn’t terribly hard to find them in specialist dealer’s inventories. I have noticed a huge variation in quality for coins in the same grade. As an example, I’ve seen some in MS63 holders that I’ve loved and I’ve seen some in MS63 holders that I thought were horrible. Spend 10-20% more and buy a coin that is high end and attractive. In some instances, you will be able to buy nice, high end examples for little or no premium.

2. Find the Sweet Spot. In my opinion, the “right” grade range for one of these 1857-S double eagles is MS63 to MS64. There is not much of a premium for these two grades over AU and lower Mint State grades and when you buy a coin that grades MS63 to MS64 you are getting good value. In the current market, AU58 examples can bring as much as $3,500-4,000. An MS63 is worth around $7,000-8,000 while an MS64 is worth $8,000-9,000. It seems to me that an MS63 at around 2x the price of an AU58 is good value. And it also seems to me that an MS64 at around $1,000 more than an MS63 is good value as well.

3. Stick With Coins in Original Holders. It is important to focus on 1857-S double eagles that are in their original gold foil PCGS holders. And having the original box and other packaging is an added benefit. Avoid coins that are not in these holders and stay clear of NGC graded S.S. Central America double eagles. They may be nice coins but they have been cracked from their original holders and probably upgraded.

4. Avoid Coins That Have “Turned” in the Holder: All of the coins in this treasure were conserved after they salvaged. The conservation process has been well-documented and, in some cases, the work was outstanding. But there are other coins that have “turned” in the holder. These can be identified either by very hazy surfaces or unnatural splotchy golden color. Avoid these coins and look for pieces that are bright, lustrous and evenly toned. At this point in time, coins that haven’t turned are probably not going to.

5. Disregard The Die Varieties. All 1857-S double eagles from the shipwreck are attributed to a distinct die variety. There are over 20 varieties known. Some are probably rare but it is even rarer to find a collector who cares. I’d suggest not paying a premium for these.

6. If You Are Buying a PL or DMPL Example, Carefully Study the Market. A very small number of 1857-S double eagles were designated as either Prooflike (PL) or Deep Mirror Prooflike (DMPL) by PCGS. These are some of the most visually arresting coins from the shipwreck. I have seen a few pieces in the last few years bring extremely high premiums. These are no doubt very scarce and very flashy coins but I question the premium that they are currently bringing. If you do decide to purchase such a coin, carefully check auction prices for comparable examples and make certain that the price you are paying is in line with the last auction trade. (more…)

By Gainesville Coins – www.gainesvillecoins.com

The Advantage of Physical Assets

Precious metals have long been treasured both for their beauty and rarity. As a result, these metals have been used by many civilizations as a store of wealth, and in some cases, a foundation for currency.

Historically speaking, these stores of wealth have not experienced the kind of boom and bust cycles present in other forms of investment. This observed stability exists for several reasons. First, precious metals such as modern bullion have intrinsic value. The fact that precious metals consist of something that actually has value makes them more stable than fiat currency which is made of near-worthless paper.

In addition, these metals in many cases have practical applications. Modern industrial processes make use of metals such as gold and platinum for their unparalleled conductivity and use in manufacturing electronics. Moreover, in the case of economic turbulence, when investors do seek investments other than those vulnerable to market fluctuations, they wisely turn to the stability of precious metals. This increased demand has the effect of increasing their values, making them an even better investment.

Finally, when precious metals are minted as collectable coins such as the popular Gold Eagle or Gold Buffalo, they are sought after not only for their intrinsic value, but for their rarity as a collectable item. Again, because there is a fixed supply of any one coin, increased demand for such an asset increases its value. It is for these reasons that for hundreds of years, gold and silver coins have enjoyed a remarkable history of defining purchasing power and backing international finance. For more on this subject, see our article addressing the superiority of precious metals.

Technology and Precious Metals

The influence of the Internet on the trade of precious metals has been vast. It is no longer necessary for collectors to buy and sell coins only locally. The Internet has several venues through which to vend or purchase these assets to buyers or sellers around the world. (more…)

News and Analysis regarding scarce coins, coin markets, and the coin collecting community, #22

A Weekly Column by Greg Reynolds

Until CoinFest occurs at the end of the month, there will not be a live event conducted by any of the four leading auction firms of rare U.S. coins. Plus, I am not aware of any private sales of newsworthy rarities over the last week. So, this is a good time to address another topic. Often, I hear about collectors who have decided to start acquiring U.S. coins and who are unsure as to how to proceed.

Sometimes, adults who collected coins as kids wish to return. In many other instances, people who have never before bought a rare or very scarce coin wish to get started. Further, people who collect paintings, sculptures, baseball cards, antique silver objects, or rare books, frequently find themselves drawn to coins. This week’s theme of suggestions for beginners will, I hope, be of interest to many intermediate collectors as well.

I. U.S. Coins valued from $250 to $1000

The focus here is on advice for a collector who seeks U.S. coins valued at over $250 each. Of course, I realize that not everyone can afford to pay $250 for a coin. I am not ignoring people who cannot. I strongly believe, though, that collectors who buy $10 to $100 coins may learn by reading this column. In order to understand the coins that a collector owns, the collector needs to understand coins that he (or she) cannot afford. It is important for all collectors to learn about the values and traditions relating to the coin collecting community. Besides, I will devote a future column or article to coins valued in the $10 to $100 range.

Advice and suggestions put forth here are geared towards a collector who is just starting, though may be of use to any collector who is willing and able to spend $250 or more per coin. Suppose he (or she) has decided to collect U.S. coins and thus will not be considering (at least not yet) colonials, territorials, patterns, or world coins. Also, further suppose this collector is not likely to will spend hours studying books on die pairings or other technical matters.

In general, the average collector spends a limited amount of time reading about coins, and is much more likely to read articles than books. Indeed, most collectors I know do not take the time to read entire books on coins, though I would recommend doing so.

Most collectors wish to have fun. It is true, however, that beginning collectors tend to enjoy coins more after they spend a few weeks or months learning.

So, herein, consider a collector who plans, over a period of years, to buy plenty of coins in the $250 to $1000 range, plus a few that cost more or less. Such a collector is flexible. On occasion, this collector may spend $1000 to $3000 per coin. The emphasis here, though, is on getting started collecting U.S. coins in the $250 to $500 range.

Rather than focus on my own advice, I have asked experts to provide their respective opinions. I selected experts who are knowledgeable about a wide variety of U.S. coins in copper, nickel, silver and gold, and have each played different roles in the coin business. Moreover, it is beneficial for collectors to be aware of the views of several experts, especially from highly qualified people that may not be available to most collectors. Below, please find recommendations from John Albanese, Kris Oyster, Nick van der Laan, and Andy Lustig.

Before putting forth detailed recommendations from these four, I relay Ira Goldberg’s more general advice. Ira is a partner in the Goldbergs auction firm and he has been a leader in the coin auction business for decades. (more…)