ON THE INVESTMENT POTENTIAL OF THE 1852 TYPE II ADELAIDE POUND
Whether profit motive or collector interest drives one’s desire for numismatic acquisition, there is no doubt, I think, that the cream of our industry is Australia’s rare and historic coins and banknotes. Holey Dollars and Dumps, Adelaide Pounds, Square Pennies, rare gold, silver, and copper proofs and patterns, the 1922/21 threepence, the 1923 half penny, and the 1930 penny make up what is generally considered the connoisseur’s collecting interest. Nevertheless, in recent years, large superannuation firms and lucrative tax benefits have helped to increase interest in our national currency, resulting in rocketing prices and spiralling returns for select examples. This increased investor interest has drawn many coins beyond the price range of the average collector, and continues to provide greater and greater average returns to those agents in possession of them.
With respects to Australia’s investment rarities, of my particular interest is the Type Two Adelaide Pound. This article will analyse the investment potential of Australia’s first gold coin, beginning with an evaluation of its relative rarity amongst its valuable brethren, and concluding with a dissertation into historical and recent trends in its price.
An industry leader posits that around two hundred Type Two Adelaide Pounds remain in existence, and are in an average grade of Extremely Fine ; at any given time, about three per cent of its population is on the market either in dealers’ catalogues or in auction. Many inferior pieces have been mounted, while other specimens are poorly struck, especially around the rim and in the legend. When placed side by side to other numismatic rarities, it quickly becomes clear that Type Two Adelaide Pounds do not appear as frequently as 1930 pennies and 1923 half pennies, but show up in greater numbers than rare proof sovereigns and half sovereigns, and Square Pennies.
An interesting comparison lies with the 1855/56 Type One Sydney Mint Sovereigns, which are Australia’s first official gold coin. Both the Adelaide Pound and its official counterpart are scarce or rare in any grade and, for pieces in Extremely Fine, relative prices have historically hung in between 1.05 and 1.20 (that is, the Extremely Fine Type Two Adelaide Pound has historically been valued at five to twenty percent more than an 1855/56 Sydney Mint sovereign in Extremely Fine). In a discussion with Belinda Downie, of Coinworks, it was generally agreed that the high relative price between Adelaide Pound and Sydney Mint sovereign was a market anomaly that did not account for each pieces’ absolute rarity. A collector and investor demand deficiency was cited as the cause.
Between the Type Two Adelaide Pound and the Square Pennies, the Penny is clearly the winner. Since 1994, twenty-one Square Pennies, one hundred twenty-three Dumps, sixty-five Holey Dollars, about three hundred and fifty 1930 pennies, around six hundred 1923 halfpennies, and one hundred twenty-three overdate 1922/21 threepence have appeared in Noble Numismatics’ auctions. At the same time, almost one hundred Type Two Adelaide Pounds have appeared in those auctions since then; around fifty of those pieces were in Extremely Fine or better, and only three were graded Uncirculated.
Now, while there are at least a dozen other auction houses in Australia alone, Noble Numismatics’ auctions are widely considered a microcosm of the industry, from which many a numismatist draws trends from its results. From the above data, it is clear that while Adelaide Pounds are less frequently available than 1930 pennies, 1923 half pennies, Dumps, and 1922/21 threepence, Square Pennies and Holy Dollars certainly give the Type Two Adelaide Pound a run for its money.
Historically, the Type Two has enjoyed moderate capital gains. Between 1979 and 1999, an example in Extremely Fine netted its owner an average return of about 8.4% per annum, compounded annually over those years. , While this figure is not profoundly exceptional (especially with respects to the boom of high yield term deposits in the mid 1980s), consistent long-term growth is an important benchmark by which the suitability of an investment is determined. In his August 1981 Numismatic Catalogue, Robert Jaggard listed three Type Twos available for sale in the relative grades of Uncirculated ($16 000), good Extremely Fine ($9 500), and Extremely Fine ($7 500). Over following month, one coin sold, while the coins in Uncirculated and Extremely Fine did not sell; he also acquired another example in about Uncirculated, with an advertised price of $11 750. Also for sale at this time were two 1855 Type One Sydney Mint Sovereigns in Extremely Fine and good Extremely Fine, each selling for $6 500 and $7 750 respectively. The relative price between the Type Two Adelaide Pound and the Type One Sydney Mint in identical grades stood at 1.15; that is, the Type Two Adelaide Pound was selling for 15% more than its Sydney Mint counterpart. By November and December, the Type Two remained unsold. Meanwhile, a good Extremely Fine example of the Type Two Adelaide Pound sold for $8 750 in the P. J. Downie Auction of August that year (Auction #25).
Across the Harbour Bridge to Martin Place, Jim Noble auctioned off four Type Twos in his Spink Auction Number 11 in November 1983. They graded Extremely Fine, Extremely Fine with a tiny scratch, good Very Fine, and Very Fine, and sold for $8 800, $5 800, $5 500, and $4 200 respectively. Quality stood out: The Extremely Fine example sold for above estimate, while the three pieces of inferior quality sold quite below estimates. By April 1986, growth in Type Two Adelaide Pounds had slowed. One piece, in Extremely Fine, held an estimate of $8 500; in that same auction, a Very Fine Type One 1855 Sydney Mint sovereign had an estimate of $5 000. Later than year, prices rose slowly. In Noble’s November auction, four Type Twos were available, each with estimates ranging from $8 000 for the coin in Very Fine and $14 000 for the example in good Extremely Fine. By 1989, prices had fallen back somewhat: the Uncirculated Type Two Adelaide Pound catalogued at $10 000; in Extremely Fine and Very Fine, the coin was valued at $7 000 and $5 000 respectively . In the same catalogue, the 1855 Uncirculated, Extremely Fine, and Very Fine Type One Sydney Mint sovereigns catalogued at $9 000, $4 000, and $2 000 respectively. In Extremely Fine, the relative price between the Type Two Adelaide Pound and the 1855 Sydney Mint Sovereign stood at 1.11. It is pertinent to note that during the high gold price days of the eighties, general interest in gold coins from both investors and collectors was significantly higher than it is today; this facet of the market reflected itself in the generally higher levels of prices paid for many average gold coins.
With the upcoming 150th anniversary celebrations of the minting of Australia’s first gold coin, interest in the Type Two (and Type One) Adelaide Pounds accelerated. In 1993, the Uncirculated and Extremely Fine Adelaide Pounds catalogued at $20 000 and $12 000 respectively, representing rises of 18.9% and 14.4% per annum compounded annually over the previous four years . Between 1989 and 1993, the return on risk-free investments fell from a high of about 18% to a modest 4.5% ; in that respect, the Type Two’s return was phenomenal. This trend had stalled by 1997, by which stage prices remained pretty much unchanged . Indeed, in March the following year, Kurt Jaggard was advertising an Uncirculated Type Two for a modest $17 500. By winter 1999, the piece had failed to sell. Meanwhile, Monetarium of Kogarah had for sale, amongst others, a Type Two in Extremely Fine for $12 500 . As the coin’s anniversary approached, its value began to rise in bounds: In Summer 1999-2000, Monetarium advertised a Type Two in Choice Uncirculated at $27 500 against a catalogue value of $25 000 . Extremely Fine Sydney Mint Type One sovereigns were selling at around $15 000 at this time, yielding a relative price of about 0.83. At the peak of the Adelaide Pound’s popularity in 2002, an example in good Extremely Fine was selling at $28 500 and two years later, in the winter of 2004, Monetarium advertised an about Uncirculated Type Two at a massive $39 500. The Extremely Fine Type One Sydney Mint sovereign sat stagnantly at about $15 000; the relative price between the Adelaide Pound and the sovereign stood at about 1.67, the highest since 1979.
Inferior Type Twos have performed ambiguously at recent auctions. Between June and December last year, around twelve inferior Type Twos went to auction, ranging in grades of Fair and Poor to good Very Fine. Six of those pieces came from Downies’ important Reserve Bank auction, where they sold for between $2 005 for specimens in Poor to $10 023 for a piece in Fine; incidentally, another example in Fine in that same auction sold for only $8 440; the example in Fair curiously sold for $4 484. All these specimens were ex-mount and exhibited some damage to outer rims. Of the few Adelaide Pounds to appear on eBay, none have reached prices of more than $10 000; all were in very miserable condition. In June, Kurt Jaggard sold via auction a piece in good Fine for $11 650, while, the following month, International Auction Galleries sold an example in about Very Fine for $14 950. In Downies’ September auction, a piece graded Very Fine with an estimate of $20 000 was passed in, while a polished piece in Noble’s November auction in otherwise the same grade sold for $17 475.
Of the better examples to surface, two pieces, one in good Extremely Fine and another in near Uncirculated, sold for $29 125 and $75 725, respectfully, through Kurt Jaggard’s Monetary auctions, while another piece, graded Choice Uncirculated, sold for $80 500 through International Auction Galleries; this particular piece is interesting in that reverse and obverse were upset by forty-five degrees. In that same auction, an about Uncirculated/Uncirculated example failed to generate interest; this piece was marred by adjustment marks, and the market determined its value by withdrawing its bids. A similarly faulted piece in the same grade failed to sell in Status International’s November auction, with an reserve of $30 000, although the following lot, graded good Extremely Fine, sold for $36 115. During that month, a superior example was listed on eBid for $35 000, but it failed to attract attention. In Noble’s November auction, another Type Two reached $33 785 before the fall of the hammer. One of the finer specimens to surface was the example from Downies’ Reserve Bank auction, which was graded Uncirculated and sold for around $75 000.
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As it stands, the Type Two Adelaide Pound remains a valuable numismatic piece to own. According to Greg McDonald’s Thirteenth Ed. of his catalogue, prices in Fine, Very Fine, Extremely Fine, and Uncirculated sit at $7 500, $16 000, $32 500, and $70 000, respectively. Similar rarities have followed the Type Two’s strong upward movements in price, and have, in some cases, exceeded it. While I cannot provide a recommendation as to whether one should acquire a quality Adelaide Pound for investment purposes, I can say with some confidence that owning Australia’s first gold coin is certainly a pleasure. ■
Jaggard, K., 1998, Collectors, Volume 12, March 1998, KJC Coins, 5
Jaggard, K., 1999, Collectors, Volume 18, Winter 1999, KJC Coins, 4
Jaggard, R. 1981, Numismatic Catalogue, August 1981, Jaggard Coins Australia Pty Ltd, 9
Jaggard, R. 1981, Numismatic Catalogue, September/October 1981, Jaggard Coins Australia Pty Ltd, 3, 6
Jaggard, R. 1981, Numismatic Catalogue, November/December 1981, Jaggard Coins Australia Pty Ltd, 6
McDonald, G., 1993, Australian Coins and Banknotes, 1st Ed., Greg McDonald Publishing, 14
McDonald, G., 1997, Australian Coins and Banknotes, 5th Ed., Greg McDonald Publishing, 22
McDonald, G., 1999, Australian Coins and Banknotes, 6th Ed., Greg McDonald Publishing, 25
McDonald, G., 2000, Australian Coins and Banknotes, 7th Ed., Greg McDonald Publishing, 25
Noble, J. 1983, Australian and World Coins Sale 11 November 1983, Spink Auctions, 52
Noble, J. 1986, Australian and World Coins Sale 18 April 1986 Spink Auctions, 84
Noble, J. 1986, Australian and World Coins Sale 20 November 1986 Spink Auctions, 57
Skinner, D. H., 1979, Australian Coin Guide, Renniks, Sinner and Warnes, 38
Skinner, D. H., 1989, Australian Coin and Banknote Values, Renniks Books, 21
About Monetary Policy. Citing website. Retrieved 7th May, 2006 from http://www.rba.gov.au.
Monetarium’s Monetary Journal, April/May, 1998, Monetarium, 14
Monetarium Monetary Journal, Spring 2002, Monetarium, 8
Belinda Downie: Private communication.