US Coins

Guest Commentary: Gold coin grading set has proven the challenge of a lifetime

During the 1979 to 1980 “gold rush,” my Birmingham, Mich., store, bought and sold large quantities of gold and silver bullion, as well as “raw” U.S. gold coins of all denominations.

Back then, the only government-issued bullion “coin” with exactly 1 troy ounce of gold was the Krugerrand, which South Africa began minting in 1967. When bullion coins were not available, we often suggested pre-1934 U.S. gold coins.

Our U.S. gold came from both local and out-of-state dealers and we depended heavily on their grading skills.

It was a great relief when third-party grading services emerged during the mid-1980s. Thanks to Professional Coin Grading Service and Numismatic Guaranty Corp., the first of such services, when we sold a PCGS or NGC coin as an Mint State 63 coin, we would gladly buy it back at the same grade.

A coin received for grading at PCGS or NGC must first be “authenticated.” Only “genuine” coins can receive grades.

Several experts express their grade opinion about a coin. When team consensus cannot be reached, an in-house or outside expert is appointed as a “finalizer.”

The specialty of our store during the “rush” was $20 double eagles, both Coronet and Saint-Gaudens. We tried to have several examples of both coins available in MS-60 through MS-65.

As new coins were purchased, we saved the best examples for our display. This was the modest beginning of our gold “grading set.” Besides the $20 coins, we also had a selection of the other coins found in a “12-Piece U.S. Gold Type Set.”

When I retired from retail selling in 1992, I continued to bird-dog additions for the grading set. With 12 coins, and 30 potential grades for each, I had a potential of 360 holes to fill. Filling them all is impossible, because, first of all, PCGS has never graded any pre-1934 U.S. gold coin as MS-70. Only 22 such coins were graded MS-69. And no Indian Head, Small Head gold dollar, Indian $2.50 quarter eagle, nor Coronet $20 double eagle has ever been graded MS-68.

At the low end, PCGS only graded 20 such coins as Poor 1, and only 42 as Fair 2. No Coronet gold dollar, Indian Head, Small Head gold dollar, or Saint-Gaudens double eagle has ever received the grade of Poor 1. And no Coronet gold dollar or Indian Head, Large Head gold dollar has ever received the grades of either Fair 2 or About Good 3.

Some coins were surprisingly hard to locate. According to the PCGS Population Report, 237 Indian Head gold $3 coins were graded MS-60, yet these coins are rarely seen. I am very grateful to my dealer-friend Greg Mellon who purchased for me a lovely example of this coin in Milwaukee.

Many other friends scouted for coins and helped to fill in the grading set. Todd Murty, an engineer, found several coins that I needed at Florida United Numismatists and other large shows.

During 2013, a $3 coin graded by PCGS as Poor 1 was offered in an auction. For years, this was the “Holy Grail” of my gold grading set. My software-developer friend Steve Ollie aggressively bid on this coin and won it.

By the mid-1990s, our grading set was still expanding at both ends. I kept the inventory on an oversized file card folded in half for coin shows.

When Steve saw my amateurish “inventory,” he decided that the coins in this grading-set, which he called “The Matrix,” should be part of a computer data base.

Steve’s program generated a one-page summary and also could print several useful reports, such as listings by coin-type and/or grade and/or date and/or year and/or Mint mark.

The output allowed us to print an “X” for those places on the grid where PCGS had never issued a grade, such as for an MS-69 $3 coin.

Any group of coins can be the beginning of a grading set. One can collect as many grades as possible of a specific coin, such as an 1880-S Morgan dollar. The 1880-S dollar is one of the few coins that PCGS has graded in all grades from Poor 1 to MS-69.

Or, a faster and less expensive way to build a grading set for any coin-type is to concentrate on only the grade, and ignore the date and Mint mark. It would not take half a lifetime to build most of a PCGS grading set of slabbed Lincoln cents or Mercury dimes.

You may see more coins graded 1, 2 or 3 in the future. Articles about grading sets and low-ball coins have prompted dealers to send more of their well-worn coins to PCGS for grading, and not just throw them into the melting pot.

For coins with extremely high and low grades, a patient collector will find an occasional coin in a large show, such as the FUN convention, or in an auction, where the competition can be fierce.

A gold coin grading set is for the advanced collector, not for a dilettante or investor. Persistence is required, even for a collector that has deep pockets and a schedule that allows him to attend several large shows and coin auctions every year.

Richard Rosenbaum is a longtime professional numismatist with decades of experience in buying and selling gold coins.

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