U.S. Numismatic Coin Basics
Major Factors Determining Numismatic Value
1. SCARCITY: Numismatic coins are, by their nature, becoming harder to find every day. Therefore their value is likely to increase substantially over time. The number of coins originally issued (mintage) is not always an accurate indication of scarcity. It is the interplay of demand with the remaining supply that determines scarcity. Population reports also help indicate monthly changes in a coin’s scarcity or “survival” rate.
2. CONDITION: The condition of a coin is one of the key factors in determining value. The grading of a coin is performed under exacting specifications that require specialized training. The recognized specifications of the grade are a decisive factor in the value of a numismatic coin. Numismatic experts use a numerical scale from 1 to 70 to describe condition, giving the obverse (front) and reverse (back) of each coin equal examination.
3A. SUPPLY: The degree of collector and investor demand plays a key role in determining a coin’s value. Rare coins are no longer minted, so the supply is very limited due to: attrition loss, mishandling, donating collections to museums, hoarding, government melt down and government intervention.
3B. DEMAND: A coin’s rarity, historical significance, quality and track record can all influence demand for a coin. Coin collectors often build life-long collections with no immediate intention to sell, whereas investors are more concerned with growth and return. Certified coins are placed into a hermetically sealed, tamper-proof plastic holder with its grade and certification permanently displayed.
Three major coin categories:
1) Circulated coins: Graded 1-59, hobby level, minimal value
2) Uncirculated coins: Graded “Mint State” 60-70, never used in circulation
3) Proof coins: Graded Proof 60-70, special mintage using polished dies and planchets (coin blanks) Coins Grading Intro