Has the Market for 18th and early 19th Century Gold Eagles Been Overinflated?

There are only two things that typically determine the price of an item, the desire of a buyer to sell and the ability of a seller to hold out for more. Gold bullion eagles from this time that are certified to be in uncirculated or proof condition routinely sell for so very much, their sale is limited to a very small pool of investors who invest in gold Eagles as a hobby and for profit.

But how do big-time investors who purchase gold Eagles, no matter their motivations for buying, know whether the numismatic market is over-priced? The first sign is that people who have been very active in gold Eagle investing are suddenly no longer able to buy gold bullion Eagles in anything like a reasonable condition.

Consider the prices that some very, very rare gold eagles from the 18th and early 19th century command. Those coins that have just a handful of known examples often sell for prices well into six-figures. While all gold coins from this era are rare compared with more modern coins that were machine stamped in the millions, but there are significant differences between various dates and types.

For instance, the number of relatively common (with 1,000 or so existing coins) early gold Eagles that are still “affordable” (under $10,000) for relatively new collectors have disappeared almost entirely in less than a decade since the turn of the century. Most of these coins graded between extremely-fine (EF-40) and almost uncirculated (AU-55), which is considered a good baseline standard for a collection. However, this increase in the “start-up” cost for gold Eagle investments in a numismatic collection of note has priced a lot of people out of the market, leading many experts to believe that the “common” early gold Eagles have been over-inflated and are heading for an imminent price crash.

On the other hand, the price of fairly rare and extremely rare early Eagle coins has kept steady with the cost of inflation and adjusted when new coins enter into public knowledge by being cataloged and certified by a third party agency. Though there are several coins that are so rare as to only come up to market every few years or so, these coins seem to retain a solid range of values when they come up to market.

The last category of coins, the mistakes and odd-balls, are extremely collectible, from any era. However, the coins from this era were made by hand and thus, more prone to such problems. As such, the odd-ball and error coins are not actually as rare as some of the dates that are less often publicized. Nonetheless, numismatists who want to buy gold Eagles with these unusual marks or errors will pay quite a bit for them – in fact quite a bit more than they would have even just a few years ago. This sector of the market, though historically significant, is also considered by some professionals to be the other over-heated end of the early gold Eagle market.

Numismatic markets tend to adjust themselves very slowly, but eventually, dealers find that they are unable to get rid of the coins that once sold for even more than the asking price without putting them on deep discounts. How a general down-turn in the economy will affect prices remains to be seen, but it is expected that very low levels of selling among the most expensive gold bullion Eagles will bring the prices back into line with reasonable demand that jibes with the actual rarity of such items.

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Victoria Lopez

April 4, 2009