Rare Coin Grading Scale
When a coin is certified, it is given a condition score from 1 to 70, which establishes the coin’s grade, based on the sharpness of the original strike when the coin was minted, as well as the presence (or lack thereof) of any imperfections, such as dings, scratches or even fingerprints.
Coin Certification by NGC or PCGS Has Many Benefits
- First and foremost it authenticates your coin as being a true United States Government issue and NOT a copy, fake, replica, or counterfeit.
- Second, once the condition of the coin is determined, it is sealed in a protective holder to preserve your rarity from damage.
- Third, your coin is assigned a bar code/serial number. If your coin is ever lost or stolen, you can prove ownership with this number.
- Finally, each time PCGS or NGC grades a coin they count the coin and include it in "Population Reports" so you will know how many other coins are like yours.
These "Population Reports" are critical in determining if your coin is a Common, Semi-Rare, or Rare coin. You will also know if a coin that you own has a "Finer" (higher quality) example and how many.
Due to the Gold Recall Act of 1933 also known as Executive Order 6102 by President Roosevelt, the gold coins that were returned to the government were believed to have been melted down and turned back into bars. Since no records were kept of which coins, and how many of each were melted, population reports help us know how many coins are still around. This is critical in knowing if you have a True Rarity.
Coins Intended for General Circulation
Coins intended for general circulation are referred to as Business Strike coins. These coins have a matte finish, just like a nickel or quarter that you may have in your pocket right now. The subset of these coins that are at or near the top condition is called Mint State. A coin from the Old West that is in superior condition, with minimal visible scratches, for example, may achieve a grade of Mint State 64, written as “MS64.”
Proof coins differ in appearance from Mint State coins. The term “Proof” refers to the method of manufacture and not the condition of the coin. Proof coins are struck on a highly polished planchet (as blank coins are called) giving the fields a mirrored effect while the image or portrait has razor-sharp edges and a frosted finish.
Historically, proof coins were sometimes minted and given to members of Congress, placed on display at exhibits and gifted to foreign dignitaries. These coins were never intended for general circulation and are generally considered to be quite rare.
Modern Proofs are made by the United States Mint in gold, silver and platinum. The mintages of these coins are nearly always a small fraction of the Business Strike coins that are circulated as bullion. Oftentimes, the Mint will set a production limit or only produce them for a certain period of time. These Proofs are intended for collectors and investors and trade at a much higher premium above the spot price of gold, even before they are certified.
Proof coins that are certified are denoted with the letters “PR” or “PF” and are most valued by investors when they achieve the coveted Proof 70 status since these are the rarest of the rare.
The Three Tiers of Grading Services
Coin grading and encapsulation services are generally regarded as belonging to one of three tiers:
- Top Tier - PCGS and NGC
- Second Tier - ANACS and ICG
- Third Tier - All others, including ACG, INB, NTC, PCI, SEGS, SGS, etc.
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Investor's Guide
The Sheldon Grading Scale
The Sheldon Coin Grading Scale is the 70 point coin grading scale used in the numismatic assessment of a coin's quality. It is used by nearly all the major coin grading companies above, including the main two, NGC and PCGS. The scale was invented by William Herbert Sheldon.
Grading is a system by which one can describe the present condition of a coin in comparison to its original condition at the time of manufacture. From the moment coins are minted, coins get marks and blemishes from contact with other coins and from being in circulation. Grading gives collectors a common language by which they can describe their coins to others.
For many years, coins were graded only with words and adjectives. For example, terms such as choice, superb, and gem were used to describe uncirculated coins; but it was difficult for a reader of a catalog to get a mental picture of what the coins really looked like. Even professionals were confused.
Today, numismatists and all of the third-party grading services in the United States use a 70 point numerical scale that was adapted from an old method of grading Large Cents. It's called the Sheldon Scale after its originator, William Sheldon. This scale uses the first 59 numbers to deal with circulated coins and the last 11 numbers for uncirculated coins. Every number is not used.
What Makes a Coin Rare?
When it comes to Rare coins there are 3 types:
- Mintage above the average of 483,350 = "Common Date."
- Mintage at or below the average of 483,350 = "Key Date."
- Mintage of 25% of the average, or 120,837 or less ="Rare Date."
So the real question becomes what determines the rare coin type. The answer is two-fold, original mintage figures & certified population figures. Original mintage figures tell you how many of that specific type of coin were minted. Certified population figures tell you how many of that specific type of coin have been certified at a certain grade level.
Most people feel that if a coin is 100 years old it must be rare. However, age alone has nothing to do with rarity. Rarity is determined by Supply. Here is an example where supply, not age, determines rarity. Let's take a closer look:
Pre - 1933 Rare Gold Coin Example
| Year | Mint | Original Mintage | Grade | Face Value | Value |
| 1909 | D (Denver) | 3,423,560 | MS60 | $5 Half Eagle | $600 |
| 1909 | O (New Orleans) | 34,200 | MS60 | $5 Half Eagle | $29,100 |
*MS60 = Mint State 60 (see the next section on Grading Scale)
As you can see in this example, Age Does Not determine Rarity. It is the Supply or Mintage/Production Figures that determine Rarity. This is why it is important to know the "Numbers" on the coins you buy.
Most people will look at only the price of a coin and say "I Can Get That Same Coin Cheaper!" This may be true for Common Date Coins, but when it comes to True Rarities - it is simply not the case. The reason is supply.
Knowing the Numbers: Collecting Rare Coins
You must become familiar with the Series of coins that you are buying to determine Rarity. Having a Dealer that will take time to explain all the Numbers is invaluable.
When it comes to Pre - 1933 gold, we know that our country was on the Gold Standard. So when you went to the bank to cash a check you received a gold coin. The United States Mint was responsible for minting or producing our money. As our country grew so did our need for Money. More and more gold coins were produced to reflect the growing wealth of our country. So some gold coins that were produced year-to-year had mintage figures in the millions.
For example, the $2.50 Indian Head Quarter Eagle was produced from 1908-1915, and then again from 1925-1929, at both the Philadelphia and Denver Mints. Total production of this coin was 7,250,261. If you own 1 of these coins, which type do you own? Rare, Key Date, or Common Date. To answer that question, look at the Numbers.
There were 7,250,261 Total Coins Produced, 12 Different Dates from 2 Mints producing 15 Unique Coins. The average mintage figure for the 15 unique coins is 483,350.
Common Dates of Pre - 1933 Gold Coins
| Year | Original Mintage |
| 1908 | 564,821 |
| 1911 | 704,000 |
| 1912 | 616,000 |
| 1913 | 722,000 |
| 1915 | 606,000 |
| 1925 D | 578,000 |
| 1929 | 532,000 |
Common Dates of Pre - 1933 Gold Coins
| Year | Original Mintage |
| 1909 | 441,760 |
| 1910 | 492,000 |
| 1914 D | 448,000 |
| 1926 | 446,000 |
| 1927 | 388,000 |
| 1928 | 416,000 |
Rare Dates of Pre - 1933 Gold Coins
| Year | Original Mintage |
| 1911 | 55,680 |
Coin Grading Scale for Rare Coins
| Grade | Description |
|---|---|
| Poor - 1 | A coin so worn that it is almost unidentifiable. It is not considered collectible except for extremely rare issues. |
| About Good - 3 | This coin is flat with little detail remaining ad with the rims worn down into the lettering. |
| Good - 4 | A heavily worn coin with flat details but with intact rims. |
| Very Good - 8 | A well-worn coin with the main features clear and bold. |
| Fine - 12 | This coin will have moderate to heavy even wear but will have bold design features. |
| Very Fine - 20 | You will find moderate wear on the high points of the design. All the major details are present. |
| Choice Very Fine - 30 | This coin shows light even wear on the surface and on the highest parts of the design. All the lettering and features are sharp and clear. |
| Extremely Fine - 40 | The coin’s design is lightly worn. Traces of luster may show. |
| Choice Extremely Fine - 45 | The coin has wear on all the high points of the design but all of the design elements are sharp. The coin must have some mint luster to qualify for this grade. |
| About Uncirculated - (AU50) | The coin will have traces of wear on most of the high points but it must have at least half the original mint luster. |
| Choice About Uncirculated - (AU55) | The coin has wear on all the high points of the design but all of the design elements are sharp. The coin must have some mint luster to qualify for this grade. |
In the circulated grades, One to Ten points separate each grade. In the uncirculated grades, every number represents a grade. Each of the following numbers corresponds to a word description:
In the Uncirculated grades, the numbers are preceded with the designation MS for Mint State. The grades used are MS60 through MS70 with MS60 representing a coin that is uncirculated but may have heavy marks and dull luster.
An MS65 coin will have few marks and none of them can be distracting. An MS65 coin will be very pleasing to look at. At the top of the scale would be MS70, which would represent an outstanding looking coin with absolutely no marks. This perfect grade is almost never used. Coins that fall into the near-perfect category are given the grades MS67, MS68 or MS69.
History of Coin Grading
Coin grading has a rich history that dates back to the early days of numismatics when collectors used subjective terms like "Fine" or "Poor" to describe the condition of their coins. This lack of standardization often led to confusion and disputes among collectors. The introduction of the Sheldon Scale in the 1940s by Dr. William H. Sheldon revolutionized coin grading by providing a numerical system from 1 to 70, which offered a more precise and universally understood method of evaluating coin condition. This system was quickly adopted by major grading services, such as the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC), cementing its place as the industry standard.
Details of the Grading Process
The coin grading process is meticulous and involves several stages to ensure accuracy and consistency. Expert graders, often with years of experience, examine each coin under magnification to assess its condition. They look for wear, luster, strike quality, and any imperfections such as scratches or dings. After an initial evaluation, the coin is cross-examined by multiple graders to ensure a consensus is reached. The coin is then encapsulated in a protective holder with a label that details its grade, providing a reliable and tamper-proof certification of its condition.
Differences Between Grading Companies
While PCGS and NGC are the most renowned grading services, there are notable differences in their grading standards and procedures. PCGS is known for its strict grading standards and rigorous evaluation process, which can result in slightly lower grades compared to NGC for the same coin. NGC, on the other hand, is praised for its comprehensive population reports and market-friendly policies, such as crossovers and re-grading. Second-tier companies like ANACS and ICG also offer reliable services but may not carry the same market prestige or resale value as PCGS and NGC-graded coins.
Market Impact of Grades
The grade assigned to a coin can significantly impact its market value, often by several orders of magnitude. For instance, a coin graded MS65 might be worth twice as much as the same coin graded MS64. High-grade coins, especially those in Mint State (MS) or Proof (PR) condition, attract premium prices due to their rarity and aesthetic appeal. Collectors and investors are often willing to pay substantial premiums for coins that achieve near-perfect grades, like MS70 or PR70, as these coins are considered the pinnacle of preservation and craftsmanship.
Common Grading Errors or Controversies
Coin grading, while highly standardized, is not without its controversies and errors. Instances of over-grading or under-grading can occur, leading to disputes among collectors and dealers. To protect themselves, investors and collectors are advised to educate themselves on grading standards and to seek second opinions when necessary. Joining reputable numismatic communities can also provide valuable insights and support in navigating these issues.
Cleaning and Conservation
Cleaning and conservation can significantly affect a coin's grade and value. Professional conservation can enhance a coin’s appearance by removing contaminants without damaging the coin, potentially improving its grade. However, improper cleaning, especially using abrasive materials or chemicals, can leave scratches or alter the coin’s surface, drastically reducing its value. Collectors should be cautious and seek professional conservation services if necessary, always avoiding DIY cleaning methods that can lead to irreversible damage.
Impact of Coin Holder on Grade and Value
The encapsulation of a coin in a protective holder, or slab, is crucial for maintaining its condition and verifying its authenticity. These holders are designed to protect coins from environmental factors such as moisture, dust, and physical damage. Furthermore, the holder includes a label with the coin’s grade and a unique serial number, providing an additional layer of security. While the holder itself doesn't influence the grade, it ensures the coin remains in the certified condition, which is essential for preserving its value in the market.
Grading of Modern vs. Historical Coins
Grading modern proof coins differs significantly from grading historical coins due to differences in minting technology and the coins' intended purposes. Modern proofs are meticulously crafted with a high degree of precision, often resulting in higher grades like PR69 or PR70. Historical coins, however, bear the marks of time and circulation, making high grades rarer and more valuable. The historical context and scarcity of older coins play a crucial role in their grading, with factors like original mintage figures and survival rates heavily influencing their assessed condition and market value.
Special Labels and Designations
Special labels and designations, such as "First Strike," "Early Release," or "Pedigree," can add significant value to a coin. These labels indicate that the coin was among the first struck from a new die or released within a specified time frame, which can be particularly appealing to collectors. Additionally, designations like "Cameo" or "Deep Cameo" for proof coins highlight superior contrast between the coin’s fields and devices, further enhancing their desirability. Collectors should look for these designations as they often denote a higher level of rarity and quality.
Role of Artificial Intelligence and Technology
Emerging technologies, including artificial intelligence (AI), are beginning to play a transformative role in coin grading. AI systems can analyze high-resolution images of coins to detect minute details and inconsistencies that human graders might miss, providing a more objective and consistent grading process. These technologies can also speed up the grading process and reduce human error, potentially leading to broader acceptance and trust in the graded results. As AI continues to advance, it is likely to become an integral part of the numismatic industry, complementing the expertise of human graders.
Educational Resources for Collectors
For collectors eager to deepen their understanding of coin grading, numerous educational resources are available. Books such as "The Official ANA Grading Standards for United States Coins" provide comprehensive guidelines and insights into grading criteria. Online courses and webinars hosted by numismatic associations offer interactive learning opportunities, while forums and social media groups enable collectors to share knowledge and experiences. Engaging with these resources can help collectors make informed decisions and build a more discerning eye for quality and authenticity in their collections.
Authentication Beyond Grading
While grading assesses the condition of a coin, authentication ensures it is genuine. This process involves verifying the coin’s weight, dimensions, and metallic composition, often using advanced techniques such as X-ray fluorescence (XRF) analysis. Authentication can also involve tracing the coin's provenance and identifying any signs of tampering or alterations. Reputable grading services offer authentication as part of their encapsulation process, providing collectors with confidence that their coins are not only accurately graded but also authentic and historically significant.
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