Q. David Bowers (derived from the PCGS Coin Guide): The gold dollar, the smallest denomination regular issue United States gold coin, first appeared in 1849, when the government introduced two new denominations, the dollar and double eagle, to exploit vast quantities of yellow metal coming to the East from the California Gold Rush. Gold dollars were minted continuously from 1849 through 1889, although mintages were largely restricted after the Civil War.
Today most of the demand for gold dollars comes from type coin collectors, who desire one each of the three different design variations. Type I gold dollars, with Miss Liberty's portrait identical to that used on the $20 double eagle, were made from 1849 through 1854, while Type II dollars, with an Indian princess motif, were struck in 1854 and 1855, plus in 1856 at the San Francisco Mint only. Type III dollars, featuring a modified portrait of an Indian princess, were made from 1856 through 1889.
In the early years, from 1849 through the Civil War, the gold dollar was a workhorse denomination. Those of the Type I design, 13 mm in diameter, were used often in everyday change, and most examples seen today show wear. In 1854 the diameter was enlarged slightly to 15 mm, to make the coin more convenient to handle. The Indian princess design, introduced in that year, created problems, as it was not possible for the metal in the dies to flow into the deep recesses of Miss Liberty's portrait on the obverse and at the same time into the central date digits on the reverse, with the result that the majority of pieces seen today are weakly struck on the central two digits (85 in the date 1854, for example). To correct this, the Type II portrait, with Miss Liberty in shallower relief, was created in 1856.
Among the three design types of gold dollars, by far the scarcest is the Type II. The total mintage of Type II gold dollars amounted to fewer than 2 million pieces. Contrast that to the Type I gold dollar, for which over 4 million coins were struck at the Philadelphia Mint in 1853 alone! Similarly, the Type III gold dollar was minted in quantities far larger than the Type II.
Collecting gold dollars can be an enjoyable pursuit, although a good bank balance is necessary to complete the task. Particularly elusive are certain Charlotte and Dahlonega mint coins, with 1855-D, 1856-D, 1860-D, and 1861-D being prime rarities. Among Philadelphia Mint coins the prize date is the 1875, of which just 20 Proofs and 400 business strikes were minted.
In general, Uncirculated gold dollars are rare for all dates prior to 1879, except that because of the enormous mintages, more Uncirculated pieces were saved by chance for such issues as Philadelphia Mint coins of the early 1850s. After 1878 a popular speculation arose whereby jewelers, numismatists, and members of the public enjoyed hoarding gold dollars (and to a lesser extent $3 pieces). Although gold dollars minted from 1879 through 1889 have generally low mintages, in proportion far more Uncirculated pieces survive than do issues of earlier dates.
As noted, the most popular way to buy gold dollars is to acquire them as part of a type set. This is as good a place as any to mention that a nice basic gold type set, consisting of major design types from the mid-19th century onward, consists of the following: three types of gold dollars, Liberty Head or Coronet quarter eagle and Indian quarter eagle, $3 gold, Liberty Head half eagle, Indian head half eagle, Liberty Head $10, Indian $10, Liberty Head $20, and Saint-Gaudens $20. Each coin in this set is very affordable. If you want to become more technical, you can expand the set to include additional varieties of $5, $10, and $20 gold coins.
Many clever counterfeits exist of gold dollars (and other gold coins), and if you are not an expert yourself, insist on buying coins from a reputable professional numismatist who guarantees everything sold.