In the first part of this two-part article on collecting modern U.S. commemorative coins, I discussed why many of these coins have tended to under-perform on the secondary market. The reason, in essence, is that the Mint makes so many of them that they are often quite common. However, I also explained that there have been encouraging signs in the last couple years which suggest that the Mint will adjust authorized maximum mintage levels to better reflect anticipated demand. In the past, the demand for many of these programs has not held up over time, which is one of the reasons they have declined in value.
Based on some of the reader comments on that article, which were read with interest, I think that some people may have thought I was suggesting that modern commemorative coins are not a good investment, or not worth collecting.
To the contrary, I enjoy and collect these coins, and in this second part, I would like to explain why I believe modern commemorative coins are a worthwhile area for specialization, and why I believe many of them are undervalued and neglected in a bullion-obsessed coin market. I will focus on the First Spouse Gold Coin series, but a similar case can also be made for the $5 gold coin series (which includes many very low mintage coins) and the silver dollar series (which has many lower mintage issues that can be purchased today for little over melt value). What these series have in common is that they are largely overlooked by current collectors, which often provides opportunities for future value.
I think that one thing that confuses some collectors of modern U.S. coins, especially commemorative coins, is the difference between authorized maximum mintage levels and final mintages. Authorized levels are set in law by the U.S. Congress in consultation with Mint officials. They are an attempt to anticipate demand for specific coin programs. Final mintages, which are what matter when it comes to determining value over time, along with other factors, are determined by how many of the coins are actually sold.
As explained in part one, Mint officials and the Congress have clearly over-estimated demand for many coin programs in the past. And they are now trying to develop more accurate estimates, as seen in lower authorized mintages for some future programs.
But what is important to focus on is the adjusted final sale numbers, which determine how many of the coins actually exist and thus help shape their value. And getting those numbers is not easy, especially if you are trying to estimate the numbers before sales of the coins end at the Mint.
As a collector of modern coins where final mintages are so important, I have often been frustrated by the delays in obtaining accurate final sales/mintages numbers. I understand there are delays in reporting the adjusted figures, but I have never understood why printed coin value guides like the Whitman “Red Book” rarely have this information on recent U.S. coins. Instead, one must turn to the hobby periodicals and especially to web sites for timely mintage information. (See the Coin Update News weekly US Mint sales reports.)
An important related aspect of the mintage issue deals with situations when sales are ended early, for whatever reason. Those coins usually have much lower than anticipated final mintages and generally will command strong secondary market prices. This type of situation has developed several times with one of my favorite commemorative series, which is the First Spouse Gold Coins. This is one of those modern series that certain collectors love to criticize as little more than over-priced bullion. But so far (with the exception of the 2007 issues) collectors of this series have proven the critics wrong, as many of the coins continue to generate interest and command high premiums after they are no longer available from the Mint.
The James Buchanan’s Liberty proof and Jane Pierce proof coins both had their sales ended early recently. The Buchanan is the lowest proof issue of the four-coin Liberty subset within the first spouse series, and the Pierce coin, depending on sales during the final couple weeks they were available, is expected to be the third-lowest proof issue of the entire series. These coins will probably do quite well on the secondary market.
The same thing happened in 2009 with the Julia Tyler coins. The uncirculated Julia Tyler, with last reported sales of 2,861, is the lowest mintage gold coin issued by the U.S. in the past 100 years. It is more than twice as scarce as the uncirculated version of the Jackie Robinson $5 gold coin, or the $10 bi-metalic Library of Congress coin, both of which sell for $3,000 and more. One can still obtain a Julia Tyler for well under $2,000, though a PCGS MS70 sells for about $3200.
However, there are two troubling issues related to the First Spouse series. One is the rising price of gold. As gold gets closer to $1500 and then $2000, the Mint issue price of the spouse coins will eventually be well over $1,000. One wonders how many people will be able to afford to keep up their collections at those prices.
Unless the program is ended by Congress, which would be terrible for collectors of the series, the coins will likely continue to be issued in very small numbers. This is likely to result in more very low mintage coins, but if few people can afford to collect them, future values may not hold up. Only time will tell.
The second issue is that the design of some of the coins is a bit lacking from an aesthetic point of view. Some of the obverses, such as the final approved design for the forthcoming Eliza Johnson coin, are not as appealing as they could be, and the reverses of many of the coins have been another source of controversy. Some historians feel the coins have tended to depict women strictly in traditional roles, whereas many first spouses were involved in all kinds of substantive activities. In addition, some collectors feel that the obverses could depict an important historical event from that presidency rather than another image of the spouse.
At the moment, collectors of this series are waiting to find out when the first 2011 first spouse coin, the Eliza Johnson coin, will be released. When it is released, the Abigail Filmore coin is expected to be withdrawn from sale. Approval of the design of the Johnson coin was delayed because members of the CCAC (Citizens Coinage Advisory Committee) had difficulty reaching agreement. In addition, the Mint has not yet announced what the authorized maximum mintage levels will be for this year’s coins.
Collectors hope the levels will be kept at last year’s level of 15,000 (20,000 for the Lincoln coin). During the first year of issue, the authorized maximum mintages were 40,000, which was too high, and Mint officials took demand into account and later lowered the authorized mintages to the levels described above. Final sales have always been even lower than the adjusted authorized maximum, was has helped produce some very scarce coins.
Louis Golino is a long-time collector, numismatist, and numismatic writer. His articles have been published in Coin World, Numismatic News, and other publications. He has also written widely about international politics for newspapers and web sites.