On September 8, the U.S. Mint began accepting orders for the eagerly anticipated 2016-W Standing Liberty Centennial Gold Quarter, the second of three coins to mark the 100thanniversary of the very popular Liberty-themed coin series that began in 1916.
Unlike the previous coin in this trio, the 2016-W Winged Head Liberty Centennial Gold Dime that launched on April 21, the gold quarters had a household limit of one, and their mintage was set at a maximum of 100,000; the dimes had a household limit of ten and mintage limit of 125,000. In addition, the dimes had an issue price of $205, while the quarters cost $485.
Those changes were made in response to complaints from buyers who were unable to order gold dimes before they sold out 45 minutes into the first day of sales. Although dealers and individual buyers find ways to get around the household limits, a lower limit does tend to impact sales, usually by slowing them down, especially when a lower limit is combined with a higher mintage.
On the other hand, a lower mintage plus a lower household limit typically results in a quick sellout, such as with the 2015-W American Eagle Platinum Proof coin. And if coin sellers see high demand from collectors and the opportunity to profit, even a coin with a higher mintage like the 2016-W American Platinum Eagle Proof coin can sell out quickly.
Demand and Sale Projections
Prior to the launch of the gold quarter, there was a lot of speculation about how the combination of one piece per household and a mintage of 100,000 would impact demand, sales, and aftermarket potential for the coins.
Most people were unsure how long it would take for the coins to sell out, or even if it would achieve a sell-out. At one end of the debate, were suggestions from some coin news Web sites that the coins could sell out in hours or even minutes.
There were also those who did not expect a sellout at all. A good example is an analysis in the September 6 issue of Numismatic News by collector Robert Matitia, which argued that the coins would only achieve sales of about 65,000 by the end of the year, and, as happened with the 2014-W Kennedy Gold Half Dollars that were sold into 2015, sales would continue into 2017.
Mr. Matitia argued such sales trends would reflect the market for these tribute coins that he sees as limited since not everyone can afford gold coins that cost $500, and he did not expect dealers and flippers to purchase as many gold quarters as they did gold dimes. He anticipated initial sales of around 35,000 quarters, based on dealer calculations of demand, which reflects sales of the dimes that are readily available today from numerous companies.
As it turned out, sales on the first day the quarters were available (September 8) totaled 47,884, or 47.9% of the total mintage, assuming that all coins were actually struck*. It also appears most of those coins were sold in the first six hours, with sales slowing greatly after that. By September 11, sales reached 53,378 according to unofficial figures, representing an increase of about 10% over first day sales.
With most eBay sales for these coins in the $580-620 range the first couple days the coins were available from the Mint, and prices expected to decline from there given the lack of a quick sellout (though there were some sales closer to $700, and at the low end at $535), there seems to be little opportunity for flippers to earn much of a profit.
Only dealers and others pre-selling coins graded 70 for $700-750 will see significant short-term profits.
And depending on the percentage of graded coins that receive the top grade of MS or SP-70, which I suspect will be quite high based on what happened with the gold dimes, I anticipate that before long top-graded examples will sell for only a small premium over issue price.
Much as happened with the Kennedy gold halves, sales of the gold quarters will probably slow considerably in the coming weeks, and there will likely be a good number of cancelled orders and returned coins, too.
It is also important to note that the pace of sales on the first day was at least initially slowed down considerably by widespread problems that were reported with the Mint’s Web site. Many buyers reported being unable to complete their orders during the first hour unless they kept trying repeatedly, but after the first hour the site worked smoothly.
Ian Russell, President of Great Collections, said: “I wouldn’t have gone with the 100,000 mintage, one per household — seems like a very high number. Look at the market for the gold dime released earlier this year (with a) 125,000 mintage, 10 per household, and we can buy them for around the issue price uncertified.** It will be very interesting to see if it sells out — I’m guessing no — but you never know.
“On the flip-side, the Mint produced just 25,000 total of the two (American Liberty) medals released a few weeks ago. With the attractive design, tie-in to the gold issue, low price point — clearly they could have sold multiples of the 25,000 mintage.”
Collectors who want the gold quarter to hold for the long-term clearly represent the main component of demand for these coins. And that is based on their overall positive view of this gold tribute and the high level of interest among collectors in Standing Liberty quarters, many of whom feel they need the gold version to complete their sets.
For example, some collectors felt the gold dimes did not faithfully represent the original 1916 design, because of the limitations of the digital and computerized processes used today compared to hand-tooling and plaster models that were used 100 years ago, as discussed in my April 15 Coin Update article. But early reaction to the appearance of the quarters (at least based on photographs and those who saw the coins displayed at coin shows) has been much more positive.
Hopefully, those impressions will be confirmed when coins begin to reach buyers in the coming days.
Plus, the Standing Liberty quarter is probably even more widely admired and collected than are Winged Head Liberty dimes, and the former coin has had an enormous impact on American numismatics, in part because the first year’s coins featured a bare-breasted version of Liberty, the only classic U.S. issue that has that motif.
Whenever an important modern coin is released, analysts look to the trajectory of past issues to see if they can shed any light on what will happen with the new coin.
In this regard the comparison between the gold quarters and the 2015 Kennedy gold half dollar is useful but only up to a point.
Sales of the Kennedy gold halves were harmed by the sharp drop in gold prices in the months after their release, the perception that their mintage of 75,000 was too high, and the widespread view that there was little profit potential in ungraded coins. Moreover, the chaos and controversy surrounding coins purchased at the ANA summer show and other Mint locations so they could be sold with special coin show grading labels did not help.
Many dealers overbought the Kennedy gold coins and were forced to sell at a loss, especially if they went in big on show label coins that saw their value drop sharply. Dealers have told me that the incident resulted in the loss of many millions of dollars.
With the gold quarters, on the other hand, dealers seem to have better gauged how much demand exists for the coins, so that they don’t end up with excess inventory as happened with the gold dimes.
As for collectors, the rather high premium over melt of 46% (which resulted in an issue price $60 higher than the $5 Uncirculated commemoratives currently selling for $425) likely reduced the appeal of the coins for some buyers.
It is likely the Mint will increase the household limit for the quarters at some point in an effort to boost sales, but I doubt that will have much of an impact as the market trajectory of most coins is established early on. A large drop in gold prices is more likely to boost sales by lowering the price of the coin, though that seems unlikely given gold’s current bullish trend.
It is also likely the Mint will lower the mintage for the forthcoming 2016-W Waking Liberty Gold Centennial Half Dollar to something on the order of 60,000 based on both a higher price-point for this issue (which will approach $1,000) and the sales of the Standing Liberty quarters.
Looking forward, I doubt the gold quarters will drop to melt value as have many ungraded modern commemorative $5 gold coins, unless it takes a very long time for them to sellout, which would further depress retail prices.
From a marketing perspective, some combination of a slightly higher household limit of perhaps two or three coins and/or a lower mintage would have brought out more dealers and flippers and created a temporary pop in value, but the approach the Mint went with helped ensure that the playing field was more level.
These are without question coins intended to be enjoyed and held for the future. And they provide a useful lesson for modern coin collectors: namely, that there will always be a trade-off between giving more buyers a chance to purchase from the Mint and seeing your coins increase in value quickly. For the true collector, that is an easy choice.
*I contacted the Mint regarding whether all 100,000 gold quarters were struck in advance of the launch but did not receive a response. If the coins go into backorder status at some point, that will mean they were not all made in advance.
**Due in part to a likely bump in interest from the launch of the gold quarters, the most recent eBay sales of the gold dimes have been between $250-280, which a healthy premium over the $205 issue price. And prices for ungraded and 70-graded coins are now the same, at least on eBay, though dealer prices vary.
Louis Golino is an award-winning numismatic journalist and writer specializing on modern U.S. and world coins. His work has appeared in Coin World, Coin Week, and the Numismatist, among other publications. His first coin writing position was with Coin Update.