Why are indian $5 incuse design gold coins so expensive?

[stinkycheese1]

No doubt, the incuse designed half eagles $5 gold coins seem very expensive. There seems to be a big premium of numismatic value on these coins, even for common date coins.

 

The $2.50 designs can be found in MS condition it seems alot easier.

 

I have a 1908 $5 indian I bought raw as AU 55. There was a former PCGS grader who worked for that coin shop. I sent the coin into PCGS where it was graded AU58.

 

I can't remember the exact price I paid, but I know it was alot. I remember not being able to afford the mint state values, which seemed to be at the time 800 to 1000 or so dollars. I think I paid around 300+ dollars.

 

What factors make these coin so expensive? I fished around on the internet and found some information about it on coinfacts.com

 

I realize many factors effect a coins value, condition, mintage, etc.

 

Here's the mintage:

Mintage:

Circulation strikes: 557,845

Proofs: 167

 

Only 557 thousand were minted. And I'd imagine a bunch were probably melted down after 1933 when gold was illegal to own. Could this be why they carry such a premium?

 

Here's more information about them on coinfacts:

http://www.coinfacts.com/half_eagles/indian_head_half_eagles/1908_indian_head_half_eagle.htm

 

 

Finally, here's a picture of mine.

 

Thanks for answering my questions!

 

[MunkyMan95]

Demand, mintage, and bullion value all factor in. Even for a common coin in XF40, they can have a modest premium over bullion value.

[Arizonadesertrat]

Not many MS coins were saved---they weren't popular with collectors or the general public at the time. Hence, most surviving Indian half eagles are circulated.

[jman425]

For the gold content, the Lib is a better value, but the Indian incused design is unique to American coinage, if I'm not mistaken.

I had to return a raw high MS Indian head because it was later discovered to be a counterfeit made in the Mid-East with real gold. Even fooled a few dealers before a specialist took a quick look and broke me the bad news.

[stinkycheese1]

For the gold content, the Lib is a better value, but the Indian incused design is unique to American coinage, if I'm not mistaken.

I had to return a raw high MS Indian head because it was later discovered to be a counterfeit made in the Mid-East with real gold. Even fooled a few dealers before a specialist took a quick look and broke me the bad news.

 

Ugh, that's terrible. Sorry for your loss.

 

I can't collect gold without being paranoid about the counterfeits...

 

EdIt: That's why I like the indian head design, its unique! Did you know people used to not like the design because they thought the incuse design could harbor bacteria and germs and such?

 

[construct]

Not many MS coins were saved---they weren't popular with collectors or the general public at the time. Hence, most surviving Indian half eagles are circulated.

 

If the field populations in QDB's type coin book are to be trusted, most surviving Indian half eagles are mint state.

 

Circulated: 150,000 to 250,000

Mint State: 250,000 to 350,000

 

Gold didn't really circulate much in the early twentieth century. Indian half eagles were no exception.

 

If the figures above are correct, these coins have lower than a 5% survival rate.

[Arizonadesertrat]

Yes, I noticed those figures too. I wonder how he arrived at field population estimates. I haven't seen lots of MS Indian half eagles in dealer inventories, and MS Indian quarter eagles seem to be more plentiful (but his field pop for these in MS is 120,000 to 160,000).

[construct]

Yes, I looked at QDB's field pops for the other late date designs after posting that. Mint state makes up slightly less than half the total for quarter eagles, less than 20% for eagles, and more than 75% for double eagles. I have no idea how to account for the differences. I see mostly MS coins for all these series in dealers cases when I look. His figures for the eagles are the most surprising to me, but his figures also indicate a much higher survival rate for eagles than for the others.

[michael]

with no rims to protect the coin the fields received much/many more marks than a non incuse coin with rims

 

and hence true choice to gem unc. indian half eagle's are really scarce to rare and the prices reflect this

 

the quarter eagle indians are not as scarce as the 5 dollar indians but are also scrace in true choice to gem unc.

 

also these are hard coins to grade and one particular slabbing service (in my opinion) many times puts slider unc. coins/coins that are close but not full choice unc. in ms 62-64 holders and so you got to be really careful when buying these coins even slabbed in unc. holders..........

 

 

[astrostu]

Yes, I looked at QDB's field pops for the other late date designs after posting that. Mint state makes up slightly less than half the total for quarter eagles, less than 20% for eagles, and more than 75% for double eagles. I have no idea how to account for the differences.

 

I can at least fill in why there are so many MS double eagles: They sat in bank vaults. They were mainly used in transactions between banks and over-seas, where they sat in vaults and rarely circulated.

 

I can guess as to why it's less for eagles than quarter-eagles: It's just like currency these days where the $1 bill (45% of bills) is the most widely-used, and second comes the $20 (22% of bills) ... not the $5 (9% of bills) nor $10 (11% of bills). I'm guessing it may be the same phenomenon where the $10 coin was the highest people would carry and then just get change for it. Another possibility could be that the denomination of $2.50 is "weird" and it's simply easier to use several $1s or $5s as opposed to $2.50s, just like most Americans don't use $2 bills in normal transactions today. However, I could be very wrong on my suppositions, so don't take them as gospel.

[BillJones]

Michael summed it up pretty well. The incuse $2.50 and $5.00 Indian design did not retain its Mint State status very long once these coins were released. The fields are the highest part of the coin which resulted in wear and marks on them if they circulated or were even stacked or handled. The Indian's cheek bone is higher than the rest of the coin and very prone wear. The top feathers on the eagle's wing are also wear points.

 

If you are trying to form the classic eight piece gold type set (four liberty coins, three Indian coins and the St. Gaudens $20), the $5 Indian is BY FAR the hardest coin to find in strict Mint State. When I was 16 years old I purchased the best $5 Indian that I could find. It eventually went into an MS-63 holder, but I never considered to be a real strict Unc. A couple years ago I purchased one in an MS-64 holder that I viewed as a "real Unc." The coin cost $3 grand then, but given the rarity, that's not unreasonable.

 

The bids on these coins have gone up and down a lot over past couple of years. Some dealers have called it "promotional activity" (HYPE), but there really aren't very many REAL Mint State $5 Indians around. It does not take much collector pressure to push up the price of the small number of Mint State coins.

[RWB]

1) Suggest you borrow a copy of Renaissance of American Coinage 1905-1908 to get the full story on the Saint-Gaudens and Pratt gold designs. The ANA library has them. You can also buy the book from many of the major hobby book sellers (cover price is $64.95).

 

2) Several factors affect the availability of Indian head $5 today. As has already been suggested, coin use patterns had a large effect on where coins circulated and on how long they spent in commerce. In the early 20th century, gold coin circulated very little in eastern and major mid-west cities – paper and checks were much easier to handle. The population of the western states and south was small and those were the only areas where gold coins were routinely found in circulation. (Keep in mind that all gold coins were intended to contain enough metal to equal their face value. Worn gold was routinely withdrawn from circulation by the US Mint and recoined.) Double eagles were used primarily for bulk cash transactions and as substitutes for gold bars in international trade. Although many banged around in shipping boxes and counting houses, few entered commerce.

 

Ten dollar eagles fell into much the same group, although they did see limited circulation. Half eagles circulated in the west, but in the east they were commonly used as Christmas and New Years’ gifts. Every holiday season there was a large demand at banks for new half eagles. These same coins were then isolated from commerce until the recipients spent the gold during January and February. The lightly circulated coins made their way back to treasury vaults, where they sat. Some were used the following holiday season, but most were held as backing for gold notes and eventually melted.

 

Quarter eagles suffered much the same fate. Both of the Pratt coins were subject to greater circulation wear than the preceding Longacre design. For most years the Mint refused to strike $2.50s because of the excessive wear and almost complete absence of use in commerce. (In some respects, this parallels the situation with gold dollars during the 1870-80s – when most apparently were used in jewelry either domestically or for export to Britain.)

 

As far as harboring bacteria and filth, that argument was used for every new coin design by those who disliked change. The really grubby money was paper.

 

[michael]

 

If you are trying to form the classic eight piece gold type set (four liberty coins, three Indian coins and the St. Gaudens $20), the $5 Indian is BY FAR the hardest coin to find in strict Mint State. When I was 16 years old I purchased the best $5 Indian that I could find. It eventually went into an MS-63 holder, but I never considered to be a real strict Unc. A couple years ago I purchased one in an MS-64 holder that I viewed as a "real Unc." The coin cost $3 grand then, but given the rarity, that's not unreasonable.

 

The bids on these coins have gone up and down a lot over past couple of years. Some dealers have called it "promotional activity" (HYPE), but there really aren't very many REAL Mint State $5 Indians around. It does not take much collector pressure to push up the price of the small number of Mint State coins.

 

 

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