We’ve Hit the Gold Mine (No Pun Intended)
By Brian Zweig
$10 Gold Liberty
In today’s numismatic market, some of the best values are “super grade” United States gold coins. Specimens grading MS65 and higher are not just a pleasure to hold and study—they represent outstanding opportunity. Only a tiny percentage of all vintage U.S. gold coins qualify for such lofty grades, and supply rarely matches demand. Two of our recent Spotlight coins confirm this fact. Earlier this year, we had the privilege to offer you two important groups of high-grade gold coins: MS65 $5 Liberty Half Eagles and MS66 $20 Saint-Gaudens Double Eagles. Both sold out very quickly. Now, we’re excited to offer another Gem Uncirculated rarity: the MS65 $10 Liberty.
History of the $10 Liberty
The $10 Liberty was one of the first and last circulating gold coins struck by the United States Mint. When our fledgling nation began producing gold coins in 1795, the $10 piece was one of two gold denominations struck (the other was the $5 Half Eagle). In 1933, when the Federal Government discontinued circulating gold coins, it was one of two denominations still in production (the other was the $20 Double Eagle). The $10 Liberty holds the distinction of being the longest-running gold coin in American history.
The Liberty was also mentioned specifically in the pivotal Coinage Act of 1792. This piece of legislation established the U.S. Mint and set the U.S. dollar as the country’s official currency. The Coinage Act also called for three decimal base units of currency measurement: the cent (1/100 of a dollar), the dollar ($1), and the Liberty ($10). Much like the British monetary system had specific names for various multiples (e.g., shillings vs. pence vs. pounds), the United States wished to establish its own nomenclature.
Very few $10 Liberties were produced in the late 18th and early 19th century—and for three main reasons. The first is that the U.S. government had a very limited supply of gold. What little specie the Mint had was often turned into smaller coins, like $2.50 Quarter Eagles and $5 Half Eagles. The Mint’s goal was to get as many coins into circulation as possible—and the best way to accomplish this was with lower-denomination pieces. It’s no surprise that the most frequently-produced coins from this era were copper and small silver units.
Secondly, gold coins were more likely to be handled by merchants and not ordinary citizens. This group preferred to use coins that were widely recognized and universally trusted. Spanish, English, and French coins were predominantly used in global trade, as they were very familiar to merchants. There was no doubt as to their fineness, conversion rates, and authenticity. U.S. gold coins were of similar quality and consistency, but were relative newcomers on the block. Thus, initially, they saw little use outside of the country.
Thirdly, European instability (like the Reign of Terror and Napoleonic Wars) sent metals prices skyrocketing in the old world. Savvy brokers discovered an arbitrage opportunity where they could buy up U.S. gold coins and melt them down profitably in Europe. It took several years for the Federal Government to catch on, but eventually Thomas Jefferson ordered a halt to all $10 Liberty production in 1804. The coin was put on hiatus until precious metals prices had stabilized in the late 1830s. Also, to avoid any further issues with fluctuating metals markets, the weight of the $10 Liberty was trimmed back slightly.
Mintage Numbers and Demand
Mintages remained small in the 1840s and 1850s, as $10 still represented a substantial amount of money. The $10 Liberty had enormous buying power for the average American; one could buy the equivalent of $600 to $800 worth of consumer goods in 2017 dollars! Even though the U.S. Mint had more gold bullion to convert to coins, it chose to focus on $2.50 Quarter Eagles and $5 Half Eagles. The $10 pieces remained a banker’s or merchant’s coin.
This trend continued throughout the 1860s and 1870s, but eventually the $10 Liberty saw a major uptick in production in the 1880s. America was becoming a global economic powerhouse and demand for its currency increased considerably. Banks and institutions looking for a stable store of value gravitated towards gold coins denominated in dollars. Even though coins struck by France and Germany were commonplace during this era, there were concerns about their political stability. American gold coins were perceived to be even more secure.
$10 Liberties remained in high demand for the next several decades—and a substantial percentage of each year’s production found its way to Europe and South America. This would prove fortunate for collectors, as many (if not the majority) of $10 Liberties that remained stateside would eventually be destroyed. President Franklin Roosevelt’s 1933 Executive Order—which called for the redemption of privately-held gold bullion—resulted in millions of gold coins hitting the melting pot. If a $10 Liberty still exists today, there’s a good chance it spent some time overseas.
Even though vast quantities of coins were destroyed, the $10 Liberty is still a common coin. Numismatists estimate that over two million of these coins remain in existence, but the majority are in circulated condition. Today, coins exhibiting moderate wear (e.g., Very Fine or Extremely Fine grades) sell for a relatively modest premium over their melt value. Nonetheless, the $10 Liberty becomes a true condition rarity in higher grades. Owing to the coin’s broad unprotected surfaces, most $10 Liberties show numerous abrasions. Even if a coin never entered circulation, it likely acquired numerous surface marks and would only grade MS61 or MS62.
The coin becomes prohibitively rare in MS65. Of all 306,000+ $10 Liberties graded by the NGC, fewer than 2,800 (less than 1%!) qualify for this lofty grade. The drop-off is even steeper in MS66; just 389 coins for the entire series have been certified as MS66. This makes MS65 the highest grade a collector could expect to locate or afford. Simply put, $10 Liberties essentially do not exist any better than Gem Uncirculated; this is about as nice as they come. In the rare event that an MS66 does appear on the market, one should expect to spend $7,000 to $12,000 per coin.
The Temperature May Be Rising, But These Prices Aren’t!
Today, MS65 $10 Liberties are selling for well under $3,000 per coin—but that wasn’t always the case. In 2008, when spot gold was still under $1,000 per ounce, MS65 $10 Liberties peaked at $8,400 per coin. According to the NGC’s historical price guide data, this coin has been trading for $5,000 to $8,000 per coin for much of the past decade. It just recently corrected down to the $3,400 per coin range within the past month or two; this represents the lowest price within the past ten years!
If our past Spotlight MS65 $5 Liberties and MS66 $20 Saints are any indication, these $10 Liberties will be spoken for very quickly. Considering the step from MS65 to MS66 is so steep—due to extreme rarity of MS66 Liberties—MS65 Liberties are an incredibly affordable opportunity. To secure your MS65 $10 Liberty gold coins at some of the lowest prices in over a decade, call us at 800-831-0007 or email us.
*Prices subject to change based on market fluctuation and product availability. Prices reflected are for cash, check or bank wire. Offer expires Friday, August 11, 2017.