Coin collectors and investors prefer to source out coins that have a good grading. Such a rating allows the coin to be indemnified with a market value that is to the benefit of coin collectors and investors.
Grading Procedure
Grading a coin is the necessary procedure undertaken to determine the rightful condition or grade of a coin. Hence, it is important to have the coin graded to ensure its rightful value from its scarcity and demand factors which determine the coin’s value to any coin dealer, collector or investor.
There are several processes in grading a coin. The coin must be checked for authenticity; the coin must be confirmed as a rare gold coin which is in demand. Next, the scarcity of the coin would enhance its grade; hence, there must be only a known limited quantum of such coins. Finally, the condition and sharpness of the coin influence its grade where detailed checking is made to confirm its beauty and value.
Types of grades
Originally, only two types of coins were graded; the Mint and the circulated. But the grading process has been fine tuned over time to make finer grade distinctions. A rare coin is given a “grade” which numismatists have devised to indicate the coin’s appearance based on five primary components such as strike, luster, surface preservation, eye appeal and coloration.
Over time, the industry practiced the letter grading system for the various types of coins found in the market. Basal State is for (PO) Poor condition coin; Fr for Fair coins; AG for Almost Good; G for Good; VG for Very Good; F for Fine conditioned coins; VF for Very Fine condition; EX or XF for Extra Fine condition; AU for Almost Uncirculated coins; Unc for Uncirculated coins and BU for Brilliant Uncirculated coins.
Sheldon grading
With the continuing growth of the 19th and 20th centuries’ coin collector market, a better coin grading system was obvious. The Sheldon Scale grading system emerged to provide a better and more standardized grading procedure. It has a numerical value from 1 to 70 with a scale of 1 to refer to an ordinary coin while a score of 70 indicates perfection. There are also uncirculated grades used on Mint State (MS) coins which begin with MS60 to increase to MS70 with a corresponding improvement in quality.
The untrained eye may have problems differentiating a MS 63 coin from a MS 65 coin as a one-point grade difference can result in thousands of dollars difference in value. This is where independent 3rd party grading professionals like the PCGS and NGC step in to assist coin collectors in making a reliable purchase.
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