Collecting rare coins is a satisfying hobby, and like collecting small works of art. It can also be financially rewarding, but it can be a good way to lose money. Coin grading is the most important part of collecting. It is the first thing an aspiring collector should learn. Coin condition is everything.
Condition is a key component of coin grading.
The biggest factor in rare coin grading is condition. In addition to rarity, the amount of wear determines a rare coins condition and price. If all the fine details remain intact, it will be worth more than those with even a little of the detail worn away. Since coins are a production item, the strike may not be the same on all items in the same pressing. If it is at the end of a production run and the dies have worn, the strike will not give the amount of detail new dies produce. The basic place to start is the date. If a coins date isn’t visible, it is the basal state and considered scrap silver or gold. From that point, grading coins is determined by how much detail is visible.
American Numismatic Association
The American Numismatic Association (ANA) is the major coin collector’s organization in the United States concerned with rare coin grading. The ANA has a code of ethics for its members, dealers and collectors regarding the buying and selling practices they are to abide by. It also endorses the Sheldon coin grading system and commercial coin grading services. They publish the ANA Grading Standards for United States Coins by Kenneth Bressett and Q. David Bowers. It is the standard to grade United States coins.
Rare Coin Grading
The Sheldon Scale is an alphanumeric system coin grading classification first developed by Dr. William Sheldon. The best coins are classified as uncirculated, mint state or MS 60-70. Everything about a MS70 coin is perfect. It has no wear and is a perfect strike. These coins are extremely rare. About uncirculated is AU 50-58. These show minor amounts of wear on the higher spots. Extra fine, EF or XF 40-45. Very fine, VR 20-35. Very good, VG 8-10. Good, G 4-6. About good, AG 3. Fair, F 2 and poor, PR1. Proof coins have a similar section of their own. Rare coin grades determine the price and value of the coin. As with any system, collectors and dealers will put the same coin in lower grades if they are buying, and higher if selling. This could make a 10 percent or more difference in price. That much difference could take a long time to recover.
The Best Rare Coin Grading Services
Coin grading companies grade and rate rare coins for a fee. The best coin grading services are approved by the ANA. They grade the rare coin, package it in a plastic container with the type, date and pertinent grading information, and certify the grade. The two biggest grading firms are Professional Coin Grading Service (PCS), and Numismatic Guaranty Certification, (NGC). They examine the coin to determine it’s not counterfeit then grade it. They package it in tamper evident sealing and attach a label certifying the coin and the grade. A good grading company is the last word for determining the rare coin grade.
It is extremely important for those who buy rare coins, gold coins and other coins for investment purposes to pay for the correct grade. A substantial loss could occurs if the grading is even one grade lower. When buying for investment purposes, buy only coins certified by an approved grading company. Unscrupulous dealers try to fake and counterfeit certification and mint labels and certification packaging for extremely rare material. Buyer beware.