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The History Behind the Indian Head Gold Coin

The History Behind the Indian Head Gold Coin

Posted by Bullion Shark on Dec 22nd 2021

Indian Head Gold

The Indian Head gold coin is one of the most striking gold coins ever minted within the U.S. Since its initial release in 1908, the Indian Head coin has continually appreciated.

This quality makes it an excellent addition to any coin collection. Still, it's crucial to understand the history of a coin before investing in it.

So, let's take a deep dive to learn more about how the Indian Head gold coin came to be and how valuable it is today.

A Brief History of U.S. Gold Coins

Nowadays, it's rare to see gold coins in active circulation. That's because the price of gold is in a constant state of fluctuation. Consequently, the value listed on gold coins is almost immediately rendered incorrect.

Some of the earliest coins used in the U.S. were made of gold. However, many of these coins weren't minted in the U.S. In fact, one of the first widespread gold coins used throughout the states were Spanish doubloons!

Let's take a quick step back in time to discover how early Americans transitioned away from using foreign coinage and why gold coins are no longer a popularly circulated form of currency in the U.S.

Early America and Foreign Gold

During the Colonial Period, the primary currency in the U.S. was foreign coinage. After all, the colonists hadn't yet claimed independence from Great Britain, so there was no national currency to be had.

Some of the most popularly traded coins throughout the colonies included Spanish dollars. These were also called eight-escudos or pieces of eight.

Consequently, many of the earliest U.S. gold coins were minted from Spanish currency that was melted down and reformed. The first gold coin created in the U.S. was made from Spanish pieces.

The First U.S. Gold Coins

The very first U.S. gold coin was the Brasher Doubloon. Ephraim Brasher, a goldsmith living in New York, created the first Brasher Doubloon in 1787.

To do so, he melted down several Spanish escudos. Over the following years, Brash would only make a few more of these coins, each with a unique design.

It's crucial to note that the first of these coins was minted five years before the founding of the Philadelphia Mint, the first national mint in the U.S. It's also worth noting that this unique coin is almost 90% gold.

Due to its rarity, historical significance, and gold content, the 1787 Brasher Doubloon is considered the most valuable U.S. gold coin. In June of 2020, this coin was valued at about $15 million.

The limited amount of Brasher Doubloons, and its private minting, ensured that it was never a well-circulated form of currency. But it would take more than half a century for the U.S. Mint to produce gold coins for circulation.

U.S. Mint Gold Coins

Between 1838 and 1933, the U.S. Mint produced nine gold coins. In order of their production and release, they are:

  • $10 Liberty Gold Coin
  • $5 Liberty Gold Coin
  • $2.5 Liberty Gold Coin
  • $1 Gold Coin
  • $20 Liberty Gold Coin
  • $10 Indian Head Gold Coin
  • Saint-Gaudens Double Eagle
  • $2.5 Indian Gold Coin
  • $5 Indian Head Gold Coin

The Indian Head gold coins and Gold Indian coins were some of the last in-circulation gold coins ever used in the U.S. You can learn more about these U.S. gold coins by checking out BullionShark's brief guide.

Contemporary U.S. Gold Coins

After 1933, the U.S. Mint stopped producing gold coins. This change came after the onset of the Great Depression when the price of gold nearly doubled over just five years.

During this time, gold coin circulation came to a standstill. Those with gold coins in their possession soon realized that their value was far more than the one listed on their reverse sides.

Consequently, coin hoarding became commonplace. And because the price of gold continued to increase, the U.S. Mint couldn't afford to produce new gold coinage.

It would take more than 70 years for the next U.S. gold coin to arrive. In 2007, the U.S. Mint began releasing First Spouse Gold Coins. This production would continue until 2020.

But this new slew of gold coinage wasn't designed for circulation. Instead, it was released as a purely collectible item. This change has set the tone for all future U.S. gold coin releases.

In short, modern U.S. gold coins can be worth their weight in precious metal, but it's doubtful that retailers will ever accept them as a valid form of payment.

As such, the Indian Head gold coin was one of the last of its type to enter circulation. Due to its historical significance, and artistic design, it's one of the most prized U.S. gold coins and an excellent investment for collectors.

History of the Indian Head Gold Coin

The Indian Head gold coin enjoyed two minting periods, both of which were plagued with controversies and economic problems. Delving into this coin's unique history is a fantastic way to understand its current value.

Indian Head Gold Coin Beginnings

The birth of the Indian Head gold coin began in 1904. This was the year that President Theodore Roosevelt (better known as Teddy or T.R.) lamented about the plain, unattractive quality of then-current U.S. coinage.

Not long after, the U.S. mint hired famous sculptor Augustus Saint-Gaudens and commissioned him to redesign four gold coins. The coins in question were the:

  • $2.5 Liberty Gold Coin
  • $5 Liberty Gold Coin
  • $10 Liberty Gold Coin
  • $20 Liberty Gold Coin

Except for the $20 Liberty gold coin (also called the Double Eagle gold coin), these coins featured the same obverse image of Lady Liberty. However, few found this image flattering or inspirational.

Roosevelt was determined that the new gold coins would have varied images, differentiating them from their previous incarnations. However, Saint-Gaudens's death in 1907 massively delayed production.

After much internal squabbling between the Mint Director and engravers, the Mint released prototypes for the new Indian Head gold coins.

Notably, the two smallest denominations, the $2.5 and $5 Indian Head coin, shared the same obverse and reverse images: A Native American man in a headdress on the obverse side and a proud eagle on the reverse side.

But there would be other issues that further delayed this coin's release. One of the most significant was the absence of "In God We Trust" on the faces of the coins.

This motto wouldn't become a legal requirement for U.S. currency until 1955. But in 1907, the U.S. Congress was already debating its inclusion.

Seeking to jump ahead of another potential controversy, the Mint quickly altered the design of the Indian Head gold coin once again, including the motto on the reverse side of all denominations.

After all was said and done, very little remained of Saint-Gauden's original design. Even worse, the updated design lacked a raised border, making the coins nearly impossible to stack. Still, in 1908, the Mint began production.

The First Release

The first Indian Head coins that the U.S. Mint produced were the $2.5 and $5 denominations. These were minted in Philadelphia, Denver, and San Francisco. In 1909, New Orleans began producing $5 Indian Head coins.

This initial release lasted from 1908 to 1915. But annual production ranged between about 30,000 to slightly more than 4,000,000. This might seem like a sizeable amount, but it's comparatively low.

For perspective, consider the VDB Lincoln Cent (the wheat penny). Annual production of this coin varied from a low of about 400,000 to more than a trillion minted.

Additionally, the average U.S. worker earned about $0.22 per hour of labor in 1908. As such, the common people couldn't afford an Indian Head gold coin of any denomination.

But while Indian Head gold coins didn't enjoy massive circulation, they did become a financially sound investment for those that could afford them. They also became popular Christmas gifts among the wealthy elite.

However, 1914 saw the start of World War I. With it, the U.S. saw the end of the gold standard. War efforts and precious metal scarcity put a quick end to Indian Head gold coin production.

The Philadelphia Mint produced its final first run of Indian Head gold coins in 1915, only a year after the Great War began. However, the San Francisco Mint continued to produce small quantities in 1916 and 1920.

Still, it seemed like the Indian Head gold coin would become a thing of the past. However, though it took a decade, they were destined to return.

The Second Release

After World War I, the U.S. experienced a massive economic boom. This era of prosperity would later become known as the Roaring Twenties. Much of this financial success stemmed from industrial improvements.

As a result, the demand for Indian Head gold coins slowly rose during the first few years of the 1920s. By 1925, the Denver Mint was producing $2.5 Indian Head coins. Most of these coins were used as gifts.

And by 1926, production had switched to the Philadelphia Mint. Still, larger denominations weren't a high priority. This became doubly true in October of 1929 when the stock market crash kicked off the Great Depression.

By 1930, the San Francisco Mint was the only U.S. Mint producing small quantities of Indian Head gold coins. In 1933, the U.S. Mint would completely cease production on gold coins.

Sadly, this would mark the end of U.S. gold coins for more than half a century. After all, gold coins weren't a popular form of circulating currency, and precious metal prices made them too expensive to produce.

Other Early 20th Century Gold Coins

As we've discussed, the Indian Head gold coin wasn't the first or the last U.S. gold coin. But it was one of the last gold coins ever produced and designed for circulation. After 1933, the U.S. Mint stopped making them.

Still, other types of gold coins are available from this general period. For example, other 20th-century U.S. gold coins include the:

  • $10 Liberty Gold Coin
  • $20 Liberty Gold Coin
  • Saint-Gaudens Double Eagle

$10 Liberty Gold Coin

The $10 Liberty gold coin, also called the eagle, is the first gold coin produced by the U.S. Mint. It began production in 1875, only three years after the U.S. government established the U.S. Mint.

This large coin is one of the only Liberty coins to see significant design changes during its 138-year run. It also saw size and gold content decrease throughout its production.

For example, the 1795 $10 Liberty gold coin had a diameter of 33mm (1.3in) and was 91% 22-karat gold. By 1838, the diameter was 27mm (1in), and the gold content was slightly less at about 90%.

The oldest of these coins is often referred to as the Turban Head $10 Gold Eagle due to its distinct design of Lady Liberty on the obverse face. They can fetch more than $400,000 at auction.

More recent coins (those produced from 1838 until 1907) tend to sell for about $1,000 per piece. Still, these values are likely to increase as gold values rise and the coins grow older.

$20 Liberty Gold Coin

The $20 Liberty gold coin, also called the double eagle, is the highest-denomination U.S. gold coin (with the exception of its successor, the Saint-Gaudens Double Eagle).

Each of these coins is made of about 90% 21-karat gold, making them some of the most valuable coins available to collectors. Production of these coins lasted from 1849 until 1907.

The obverse side of these coins featured a profile image of Lady Liberty, while the reverse side showed a stylized version of the Great Seal of the United States.

While the initial value of this coin was only $20, the average double eagle gold coin is now worth several thousand dollars today. Rarer coins (like those minted at the New Orleans Mint) can fetch more than $1 million.

Saint-Gaudens Double Eagle

The $20 Saint-Gaudens Double Eagle was one of the only coins Saint-Gauden designed that escaped significant design changes. It was initially meant to take the place of the $20 Liberty gold coin.

However, the old Liberty design proved popular throughout the Saint-Gaudens Double Eagle coin's production years. Many U.S. investors of the time felt the new design was pretentious.

But despite a lack of interest from U.S. investors, the coin saw a longer production than the Indian Head gold coin. That's because it became a popular investment for foreign banks and investors.

But times have changed, and the Saint-Gaudens Double Eagle is now highly prized for its gold content, historical significance, and aesthetically pleasing design. It's often worth more than its predecessor, the $20 Liberty gold coin.

The Saint-Gaudens Double Eagle was produced between 1907 and 1916. World War I put a temporary end to the coin, but economic revitalization helped it return in 1920.

Still, just as with all other U.S. gold coins, minting ended in 1933. The most valuable double eagle is from this last tiny batch. It sold in 2021 for more than $18,000,000.

Indian Head Gold Coin Value

The value of any given Indian Head gold coin depends on two factors:

  • Condition, and
  • Mint location

Naturally, the better the condition of a coin, the more value it has. Unfortunately, older coins are rarely in mint condition.

But due to the hoarding that occurred during the Great Depression, some Indian Head gold coins never entered circulation, preserving their condition.

One of these coins can easily fetch several hundred dollars if it's in Extremely Fine condition. But uncirculated coins (also called mint state coins) are often worth thousands of dollars.

Minting location also impacts value. Indian Head gold coins minted in Philadelphia don't have a mint mark, but those minted at the Denver Mint have a small 'D' initial on the reverse side.

The Denver Mint produced far fewer Indian Head gold coins than the Philadelphia Mint. Consequently, Indian Head coins with the Denver mint mark are rarer and often more valuable.

To help you better understand the values of these historic coins, let's look at the most and least valuable Indian Head gold coins.

Most Valuable Indian Head Gold Coins

The most valuable Indian Head gold coins tend to be in mint condition, have mint marks, or be part of a small production period. For example, the 1933 Indian Head Eagle is one of the most valuable pieces from this series.

The average 1933 $10 Indian Head gold coin can sell for more than $60,000. That's because only about 300,000 of these coins were minted in 1933.

It was also the last time during the 20th century that U.S. gold coins were minted. Both of these factors contribute to its high value.

Pre-1929 Indian Head coins also tend to be quite valuable, especially 1907 coins featuring Saint-Gauden's original design. Coins produced in small batches also tend to enjoy higher values due to their rarity.

Least Valuable Indian Head Gold Coins

The Indian Head gold coin value doesn't tend to depreciate over time. The only major exception to this rule is a coin that sees significant wear.

But most of these coins never entered circulation, which reduces the likelihood of finding worn Indian Head gold coins. Still, the least valuable Indian Head gold coins tend to:

  • Show significant signs of wear
  • Contain the least amount of gold
  • Be free of mint marks

The most inexpensive Indian Head gold coins tend to start at about $400. Considering their historical significance and gold content, this base value is liable to rise with time. Now might be the perfect time to invest!

Becoming a Gold Coin Collector

If you're interested in owning a valuable piece of U.S. history, you may want to consider investing in U.S. gold coins. A gold coin collection is only likely to appreciate with time, making it a sound investment.

Benefits of Collecting Gold Coins

There are several potential benefits of collecting gold coins. Let's explore some of the most significant of these advantages.

For example, collecting gold coins:

  • Help you diversify your investment portfolio
  • Appreciate with time
  • Don't incur capital gains taxes like other assets

While the stock and cryptocurrency markets remain highly volatile, gold remains consistent in terms of appreciated value. As such, it's a worthwhile investment, especially for those seeking long-term profitability.

Types of Gold Coins to Collect

Though we've explored many U.S. gold coins available to collectors, they're not the only kinds of gold coins worth investing in. Other worthwhile options include:

  • Ancient gold coins like the Umayyad gold dinar
  • Foreign gold bullion coins like the Canadian Gold Maple Leaf
  • Historically significant gold coins like the 1343 Edward III Florin
  • Recovered gold coins from shipwrecks

The best investment opportunities for you depend on your preferences and budget. If you don't have several million dollars to drop on a single coin, you may want to consider choosing rare modern gold coins.

For example, Gold Buffalo coins sell for between $100 and $5,000. They're far more affordable than the average Saint-Gaudens Double Eagle or pre-1838 Double Eagle.

Starting Your Coin Collection

When you're ready to start collecting valuable gold coins, it's typically best to start small and work your way up. Remember, the sooner you invest, the more appreciation you can enjoy.

Buying a set of relatively inexpensive gold coins today could help you buy more valuable and historically-significant coins a few years down the line. Of course, your personal preferences will also play a role in coin selection.

For example, if you're interested in the 1920s, you'll likely gravitate toward coins minted during that decade. But if you're more interested in the Colonial Period, you'll want to choose the oldest U.S. coins.

No matter how you decide to start your coin collection, one thing will always be true: It's never a bad idea to invest in gold coinage. Gold either holds its value or appreciates with time, unlike silver or platinum.

The BullionSharks marketplace is an excellent way to find affordable, high-quality gold coins for your burgeoning collection and investment portfolio.