In the coin field, insider information is not only legal, it’s essential. Here are four important coin market insider tips in an easy-to-understand and simple format. Pay very careful attention. Heeding these points will raise your level of knowledge from swindler’s mark to informed amateur.
In today’s coin market, rare and valuable US coins usually need to be “certified” by an independent coin grading service to be saleable. For a fee, these organizations rate coins on a scale of one through 70, where one refers to a coin which is so well worn, it is barely identifiable as to its type, and 70 is a perfect coin.
The two leading grading services are NGC (Numismatic Guaranty Corporation), founded in 1987, and PCGS (Professional Coin Grading Service), founded in 1986.
These organizations assign a consensus rating on that one through 70 scale and then encapsulate the coin in a sonically sealed tamper-evident holder.
When these services first started grading in the mid-1980s, their standards were very tight. Graders were bashful about stepping up to the plate and assigning high grades.
But grading is an educative process, and over years, as graders’ confidence and knowledge increased, so did the grade levels assigned by the services they worked for.
So, there are some coins in old grading service holders that can be resubmitted today for upgrades. This is especially significant in the area of Mint State (MS) or uncirculated coins (60 through 70). A MS-65 (Gem) graded coin might be valued at a multiple of its MS-64 counterpart. Case in point: An 1880 Morgan silver dollar from the New Orleans Mint carries a $1,300 value in MS-64. But its counterpart graded MS-65 sports a $15,000 price tag. The visual difference to a beginning collector between MS-64 and MS-65 is not noticeable. It might be a tiny scrape on the front of the coin that precludes it from receiving the MS-65 designation.
But if you have a coin in an MS-64 holder that could be regraded MS-65 by today’s standards, that difference of thousands of dollars can be very noticeable to you.
NGC holders from the 1980s are thick and often called “fat” holders. The earliest PCGS holders are slender and contain coins that rattle in them. PCGS holders from the late 1980s and early 1990s have green inserts and are referred to as OGH (old green holder) coins.
Collectors and investors also like coins in old holders because this provides an assurance of stability. After all, if a 100-year-old coin is as brilliant as it was the day it was struck and resided in the same sealed holder for 30 years, the chances are that it won’t be turning an ugly color in the holder any time soon.
- Some types of lights can deceptively improve a coin’s appearance.
The difference in price between a lightly worn coin that had a perspiration-soaked thumb that wiped across its surface and its Mint State pristine counterpart without that fuzzy thumbprint can be many thousands of dollars. An incandescent light bulb or pinpoint light source such as a Tensor lamp will help you to spot light circulation or friction on a coin.
The bare filament of chandelier bulbs will give a coin a glowing effect and hide circulation wear. Floodlights increase brilliance and decrease your ability to identify details. The combination of a chandelier and floodlights could make an About Uncirculated-58 (barely circulated) coin appear to be MS-63 or better.
For more inside information on coin collecting:
- Coins in holders with green oval stickers can be worth huge premiums.
The concept of grade inflation described above is a wake-up call to anyone buying coins—Grading standards have not been consistent over time, even at the top independent grading services. Coin grading is a process of subjective evaluation. But it’s a consensus of subjectivity, which makes it somewhat objective.
Coin grading is performed on a spectrum or continuum. Some MS-65 coins are nearly MS-66 and others are low-end and are marginally deserving of the next lower grade.
To help consumers navigate this minefield, the founder of NGC and co-founder of PCGS, John Albanese, created CAC (Certified Acceptance Corporation). CAC affixes a green oval hologram to the holders of NGC and PCGS holders when it feels the coin is graded solidly and is not low-end. CAC-verified coins often bring premiums of 10% to 15% and more than their non-CAC counterparts.
- You can sometimes detect certain counterfeit coins by comparing the suspected fake to a known genuine coin.
Counterfeit grading service holders housing counterfeit coins are becoming increasingly common. Both the bogus grading service holder and coin itself are often made in China. The counterfeit problem is being tackled by the coin industry.
Sometimes the easiest way to tell real from fake is to compare a real coin in its holder side-by-side with a fake coin in its holder. The difference can be startling when a side-by-side comparison is made.
These photos, courtesy of the Anti-Counterfeiting Education Foundation, show a fake American Buffalo one-ounce gold coin in a fake grading service holder and its genuine coin counterpart in a genuine holder. The fake coin actually displays more detail than its genuine counterpart.
Reputable dealers with brick and mortar stores and counterfeit-detection skills aided by state-of-the-art equipment that assists in authentication can be relied upon to sell real coins in real holders. Deal with sellers who guarantee the authenticity of the coins and precious-metal bars that they sell. Do not buy coins from unknown dealers on eBay, Amazon, Alibaba or any other online auction facilitator. It has also become commonplace advice to steer clear of China-based online merchants. About 95% of the counterfeits currently encountered in the U.S. market come from China-based merchants.