Rare Coin Values: Grading

If you are interested in collecting rare coins, then you will need to know the basics of coin grading. Although many dealers are honest, they cannot know everything about every rare coin, and this can lead to over-graded coins, or coins that are valued above their actual worth. When you are collecting rare coins, the risks of your coin being over-graded can mean that you buy a coin for more than its market value. This can be a problem because your coin will automatically depreciate. Avoiding this problem is simple, if you can learn a few facts about coin grading.

What is Coin Grading?

Coin grading is the process by which a rare coin is given a value. The worth of the coin is dependant upon a good grade, but many coins are actually not as good as their grade implies. It is estimated that more than half of all rare coins sold in the current market have been over-valued. Before the rare coin market grew, you could find three grades of coin: Good, Fine and Uncirculated. The good meant that the coin was a little worn so it held a lesser value. Fine suggested that the coin was in circulation, but still had some of its mint-condition features. Uncirculated suggested that it was a Mint Source coin, or had sharp details and a deep shine.

Grading Rare Coins

More recently, different values or grades have been placed on some coins. The change is due to the large numbers of people trading the items. This grading system is known as the Sheldon-Scale and is a way of standardizing the grading of rare coins. This grading is based upon a numerical system that ranges from 1 to 70. Here is a brief review of the grading scale.

  • M60 - M70 means the coin is in Mint state
  • AU55 - AU58 means it was probably circulated
  • EF45 and XF is extremely fine
  • VF30 is very fine
  • F12 is just Fine
  • AG and G mean that the coin is worn

How to Spot a Good Coin

If you are looking at coins in a dealership and are unsure about how they should be graded, then you may want to look for some signs. A Fine or Near Mint condition coin (between EF and AU) should be very bright and should only have one or two small marks on the surface. There should be no scuffing, and coins should be bright and lustrous.

Mint condition coins should have sharp detail and will show little to no evidence of wear and tear. A lower-end mint condition coin may have a dull luster, but they should not be overly heavily marked. They should only have one or two hairlines. A coin that is graded as good may be covered in scratches. The design may be heavily worn and some of the scuffs may develop into severe marks or scratches.

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