Coin Grading

The key to the value of a gold or precious metal coin is its condition. That’s why grading is so important.

Graded coins are normally far more valuable than ungraded coins, especially an ungraded, unprotected coin, which can be subject to the elements and/or damage. Collectors prefer coins in the best condition possible, for obvious reasons. A coin in mint condition will retain more of the fine detail of the original engraving, too. Obviously old and ancient coins are easier to read in better states of preservation, and there is generally more pleasure in owning a coin in almost perfect original condition than there is with a worn specimen. There are fewer “old” coins in mint condition than in worn condition. 

Whilst ungraded coins have no guarantee of grade and condition, graded coins are certified by a professional grading company with a recognised grade on a scale between 1 and 70.  Graded Coins come in sealed, protective transparent containers to preserve the beauty and quality of the coin.  As the coin cannot be released again, the coin remains at its certified grade forever.

Value Depends on Condition

These two factors combine – low supply and high demand – so that prices for perfect condition coins are higher than for similar worn coins. In many cases, coins worth hundreds of pounds in mint state might be almost worthless in worn condition.

Standard Terminology

For many years dealers and collectors have used an almost universal scheme for describing coin grades. There are some differences between different national grading systems, but these mainly boil down to differences in the descriptions used, rather than any real underlying differences.

Other Factors

Weak striking sometimes needs to be taken into consideration. A weakly struck coin in mint condition might show less detail than a better struck coin in only ‘EF’ condition.

With hand-hammered coins, such as ancient coins, many were struck off-centre, and well centred coins are usually preferable to off-centred ones. This relates more strictly to the original state of the coin, rather than its preservation, but remains an important part of the description of the overall state of the coin, and therefore affects its desirability.

In the past, coin grading was a fairly vague process and coins were just categorised as either uncirculated (stored since they were minted), good (mostly well preserved) or fine (detail is clear and there is still some lustre).  But as time went on it became evident that a clearly defined and internationally accepted grading system needed to be established. 

Nowadays, a coin is given a grade (which affects its market value) based on its appearance and overall condition. 

There are five critical elements that help determine this:

1. The surface condition: the number of marks and scratches on the surface and the severity of these. 
2. Strike: This can be either a weak or strong strike and refers to how strongly the design is stamped onto the coin. 
3. Colouration: This looks at how much the coin has changed from its original colour.  Any discolouration could be due to age, improper cleaning, storage, or handling of the coin (even natural oils from one’s fingers will lower the grade rating).
4. Lustre: How much of the original shine is still intact.
5. Eye appeal:  General – this incorporates all of the above elements.

Abbreviations

When a coin is graded it is given a numerical value between 1 and 70.  A PO-1 represents a barely identifiable coin whilst a MS70/PR-70 represents a perfect coin with a full strike and no markings (these are rare, although Rosland does obtain them for various coin types).  Most dealers and collectors use “shorthand” abbreviations for coin grades, both in speech and in print.  For example, PO stands for basal (poor) state and MS stands for mint state.  The table which follows, or similar, can be found in most decent coin catalogues.  This tables shows the above terms aswell as examples of AU & MS-numbered grade ratings.

• (P-1) Poor – Barely identifiable; must have date and mintmark. 
• (FR-2) Fair – Worn almost smooth, but lacking the damage ‘Poor’ coins possess. 
• (G-4) Good – Heavily worn.  Inscriptions may have merged into the rims in places; exact details are mostly gone. 
• (VG-8) Very Good – Very worn, but all major design elements are clear, if maybe faint.  But little, if any, central detail. 
• (F-12) Fine – Very worn, but wear is even and overall design elements stand out clearly.  Almost fully-separated rims. 
• (VF-20) Very Fine – Moderately worn, with some finer details remaining. All letters should be readable. Full, clean rims. 
• (EF-40) Extremely Fine – Lightly worn; all devices are clear, major devices clear & bold. 
• (AU-50) About Uncirculated – Slight traces of wear on high points; may have contact marks and little eye appeal. 
• (AU-58) Very Choice About Uncirculated – Slightest hints of wear marks, no major contact marks, almost full luster (quality of shine), and positive eye appeal. 
• (MS-60) Mint State Basal – Strictly uncirculated but that’s all; ugly coin with no luster, also with obvious contact marks, etc. 
• (MS-63) Mint State Acceptable – Uncirculated, but with contact marks and nicks, slightly impaired luster, but overall appealing appearance.  The strike is average to weak. 
• (MS-65) Mint State Choice – Uncirculated with strong luster, very few contact marks, but excellent eye appeal.  The strike is above average. 
• (MS-68) Mint State Premium Quality – Uncirculated with perfect luster, no visible contact marks to the naked eye, with exceptional eye appeal.  The strike is sharp and attractive. 
• (MS-69) Mint State All-But-Perfect – Uncirculated with perfect luster, sharp, attractive strike, and very exceptional eye appeal. A perfect coin except for microscopic flaws (8x magnification) in planchet (pre-strike), strike, or contact marks. 
• (MS-70) Mint State Perfect – The perfect coin. There are no microscopic flaws visible to 8x, the strike is sharp, perfectly-centred, and on a flawless planchet.  The coin is bright, full, original luster and outstanding eye appeal. 

Other Coin Grading Terms

Proof – Proof is not a grade, but a term for a specially struck coin, often with matt design against mirror finish background, produced originally as pre-production samples, now often marketed for collectors.

Good – Although “good” is used in American grading meaning a coin which is not good, it is also used in connection with the above terms, so that, for example, “good Fine” means “better than Fine”.

Almost or About – “almost” or “about” means “not quite as good as”, so for example “almost Fine” means “not quite Fine”.

Dealers’ Terms

When selling by mail order, most dealers allow a reasonable approval or return period. Rosland, for example, offers 12 days for non-bullion coins.

Professional Grading

It is vital that a reputable coin grading service evaluates coins.  Presently the NGC (Numismatic Guaranty Corporation) and PCGS (Professional Coin Grading Service) form the top tier of a three tier grading service. They are the two most reliable and consistent services and use a consensus method of grading. Added to this, they guarantee the grades and authenticity of the coins. A NGC or PCGS coin grading and approval have a higher demand in the market.

The coins are placed & sealed in holders known as ‘slabs’.  The NGC/PCGS holders are made of colourless plastic and are designed to be stackable.  Anti-counterfeiting measures include a holographic emblem on the back, the design of which has changed over time.  In addition to this, as an example, the current PCGS design depicts the name “PCGS” and a Saint Gaudens double eagle. On the front in pastel blue, the coin information provided includes its type, denomination, grade, and a unique serial number assigned to that particular coin, as well as a machine-readable barcode.  PCGS maintains a census of all coins they have graded since their inception, revealing the incidence of each date, mint mark, and reported variety of coin.

Although ungraded coins are undoubtedly cheaper, they are a hugely risky investment and as is pointed out, the true value of a coin lies in having it graded correctly, by an established and knowledgeable coin grading service.  Rosland only uses NGC and PCGS for coin-grading.

“Graded Coins come in sealed, protective transparent containers to preserve the beauty and quality of the coin”