A rare and important Navajo chief's blanket is to provide the top lot in Bonhams' Native American Art auction, which will be held on December 3 in San Francisco.

Navajo blankets can be categorised into three phases according to the different yarns used

The finely-woven piece is believed to be one of the earliest third-phase Navajo blankets in existence. Textile scholars categorise Navajo weaving into three "phases" depending on types of red yarns that they contain, with the third and final phase characterised by more complex red diamonds and partial diamond patterns.

Formerly part of the Silverman Museum Collection, the example at auction was collected by Thomas S Twiss, an agent of the Indian Bureau, circa 1850, around the time it was made. As Charles Amsden notes in his book on the subject: "This (if the history is accurate) is the earliest known Chief Blanket to depart from the traditional pattern of plain stripes."

The blanket would have been created by women yet reserved for the usage of chiefs, and is more finely woven that other examples from the Navajo people. It is expected to sell for $125,000-175,000.

The world record for a Navajo textile at auction was set by another chief's blanket in June - one of just four first-phase examples in existence. It soared 244.8% above the previous record price to sell for $1.8m. The current world record for any Native American artefact is $2.2m, which was set by a rare Tinglit helmet in 2008.

Paul Fraser Collectibles is currently offering an authentic strand of hair from the famed Apache leader Geronimo.