Due to the quickly escalating prices of gold and silver today, a growing number of people are gaining financial stability and profits by investing in rare gold and silver coins such as those offered by Monaco Rare Coins. There is a wide choice of coin types, value, commemorative worth and potential for increasing profitability rates in the precious metals coin market. According to Jeffrey Bernberg, President of the Professional Numismatists Guild (PNG), for safe and successful investing, you need full knowledge and understanding of both the market for these rare coins and the coins’ varying composition and value. Unless you are well informed when entering this worldwide market as an investor, your experiences and investing results may not be pleasant or profitable. As a novice rare gold and silver coin investor, you can benefit greatly by choosing to do business with a PNG member dealer. Each PNG member dealer must abide by a strict ethical code when performing all sales transactions of rare coins.
Three Major Factors Basic to Investing in Rare Gold and Silver Coins
In order to make the best possible choices when buying and selling rare gold and silver coins, an investor must know the true cost per ounce of the compositional metal. It is also crucial to know the precious metal value versus the current collector valuation of the coin. The investor must also be assured of prompt, accurate delivery of the product. Any reputable professional dealer, such as a PNG member, will guarantee insured shipping and handling of your rare coin purchases before purchase. The PNG advises all precious metal coin investors to heed professional stipulations and guidelines concerning: (1) Rare gold and silver coin pricing; (2) Differences between bullion and collector coins; and (3) Product delivery offers and options:
• Rare gold and silver coin pricing. – Gold bullion coins are generally traded at a very limited premium rate above the spot gold price. This is due to the fact that these coins are issued by the mints of sovereign governments. Included in their transactional pricing is a governmental minting fee. The spot gold pricing is calculated on the basis or .999 quality gold bars weighing 100 ounces or more. Coins of gold bullion that weigh one ounce and less will be traded at a rate of 3 – 15% percentage points above spot price. Factors considered in this pricing are coin size and the size of the coin trade order being placed. Commonly traded precious metal denominations in such coins are one tenth, one quarter, one half and one ounce.
Several of the most frequently traded gold bullion coins today are the American Eagle, the Canadian Maple leaf and the South African Krugerrand. The most successful investors in this market will typically consult more than one reputable and reliable gold and silver coin dealer before settling for a given price. Responsible, experienced gold bullion coin dealers may transact the sale of an American Eagle gold coin weighing one ounce for a price around 5% higher than the day’s spot (or melt) valuation. They will most likely buy these coins from selling clients for a price approximately 2% lower than the selling price. Especially for this reason, many coin collectors prefer to trade in rare gold and silver coins, or collector coins.
• Differences between bullion and collector coins. – Fine-quality rare gold and silver coins are very popular in the current precious metals trading market. Gold and silver coinage minted and issued by the US Treasury for circulation may have a surprisingly high value if in excellent condition. They may even trade for amounts that are thousands of dollars more than their metal content value. Investors must be capable of discerning the differences among silver or gold rare coins having a sizable collector premium or value due to their rates of trading frequency over time, their national significance, and their salability as collector’s items. In contrast, the changing values of bullion coins constantly fluctuate in sync with the price changes in gold, platinum and silver metals.
• Product delivery offers and options. – All responsible, professional precious metal collector coin dealers will inform you of any possible or expected delay in mint delivery dates of coin investments when you purchase them. Most collector coins purchased should be delivered to the buyer within 10 to 14 days following purchase. In general, the PNG is not in favor of investors having their rare coin investments stored by dealers. They most often recommend that customers arrange for safe storage of precious metal coin investments in professional, accredited and trustworthy depositaries. Small amounts of collector coins may be stored in a customer’s bank safe deposit box, at least temporarily.1
Longevity and Popularity of Rare Gold and Silver Coin Collecting
Julius Caesar is reported to have been an avid coin collector, as was King Louis XIV of France much later in history. Rare coin collecting is one of the most popular and enduring forms of collecting humankind has enjoyed and benefited from. The coin collecting, or numismatic, market gained its name from the Greek word for money, “nummi.” There are actually three varieties of popular rare coin collecting enthusiasts: (1) coin collectors who are hobbyists seeking fun and entertainment; (2) coin collectors and dealers with the major motive of realizing profits; and (3) archaeologists, sociologists and historians who seek rare coins as artifacts for educational study. If you take into consideration the vast numbers and varieties of coins produced throughout the ages for driving local, regional and countrywide economies, the possibilities for rare coin collections is inexhaustible and intriguing.
The Grading Process for Determining Rare Gold and Silver Coin Value
The single factor having the greatest impact in determining the value of a rare gold or silver coin is its overall condition, or grade. Other items of importance to the value are the issue date and mint mark. Professional coin grading is a fairly complex process. This coin grading separates coins into ten different classifications that correspond to their condition: uncirculated or mint state, about uncirculated, extremely fine, very fine, fine, very good, good, about good, fair, and poor. The generally accepted method for professional grading of rare precious metals coins is the Sheldon scale. First developed by Dr. William H. Sheldon in 1949, this coin grading method rates coins from low to high worth, using a numerical scale ranging numerically from 1 to 70.
It was Dr. Sheldon’s intention that his rare coin grading scale be used exclusively for determining the value of large cent coins. Using the 1794 cent as the model for his scale, he assigned it a value of $1 and a grade of 1, or poor, if in recognizable condition. This same one cent coin was selling for $4 when in good condition, so he gave it the grade of G4. If in very good shape, it priced for selling at $8 – $10, so he decided the grade to be VG8 or VG10. He then estimated that a coin in perfect condition would sell for the price of $70, so his measuring scale ended with 70.
In the 1970s the ANA adopted Dr. Sheldon’s system for grading the US series of coins in its entirety. Although many rare coin experts have expressed a strong preference for adopting a 100-point system to better suit the decimal system, the Sheldon scale is still the nation’s accepted scale of coin value measurement, particularly for higher grades of rare coins.
Common Grading Terms for Mint State Coins
Traditional mint value designations for gold and silver coins are also equivalent to their corresponding Sheldon scale ratings. Mint state (MS) coins have never been put into circulation for commercial use. They usually have and maintain a lustrous surface quality, even when somewhat toned with age. Excellent quality MS coins have no bag marks, scratches or flaws in detail. MS coin quality can be graded further from mint condition of 70 to 60, for example:
• MS70: A gold or silver coin with this grading is essentially a flawless minted coin. It has no damage, surface scratches or marks and has never been circulated.
• MS69: A coin with this grade has only slight irregularities, usually in surface texture or design purity.
• MS68: This grade of coin may have slightly noticeable imperfections, particularly in the design strike.
• MS67: Coins with this grade often have recognizable imperfections in design detail.
• MS66: Coins with this grading designation usually have surface abrasions or slight lines or breaks in design detail.
• MS65: Coins in this grade category are considered better than average in overall quality. They have never been circulated and show imperfections only in minor design detail. This grade is the highest awarded to coins other than those produced strictly for collecting.2
Additional Helpful Information for Rare Gold and Silver Coin Collectors and Traders
Many uncirculated gold and silver coins are struck from highly polished dies. For this reason, their surfaces may actually reflect images and light. This mirror-like surface quality is known as Deep Mirror Proof-Like (DMPL) by dealers and collectors. One coin famous for its DMPL quality is the Morgan Silver Dollar minted from 1878 to 1921. These coins have the unique distinction of selling for a premium due to the DMPL. Morgan silver dollars are currently one of the most popular coins traded in the rare coin market. They have become America’s most sought-after and collected coin. Another frequently bought and sold collector coin is the US $20 Type 1 Double Eagles gold coin of varied mint dates. A third very heavily traded rare coin on the market is the $20 Gold St. Gaudens coin minted pre-1933. These three gold and silver coins and others are predicted to continue trading for astoundingly high profitability in future precious metal coin markets.
The rare gold and silver coin market is an extremely good trading venue and opportunity for all investors from every walk of life today. There is truly something attractive and available to everyone at a vast range of prices, both on the Web and through offline dealers. Especially with the wide array of coin evaluation and trading information now offered by such expert groups as The PNG, the American Numismatic Association (ANA), the Professional Coin Grading Service (PCGS), the Numismatic Literary Guild (NLG) and others, anyone can become knowledgeable about rare coin collecting and trading.
The PCGS was instrumental in establishing a safe, reliable “sight unseen” market for rare coin trading. They first carefully authenticated coins, graded them and had them secured within plastic slabs. These slabbed or encapsulated coins can then be distinguished from coins without such holders, called raw coins. Dealers and coin collectors have the assurance of knowing each coin they acquire has an accurate grading and is authentic if it has a PCGS slab. PCGS experts also ensure that coins are graded according to the same criteria no matter what the current state of the rare gold and silver coin trading market may be. With the highly experienced guidance of Monaco Rare Coins professionals, anyone can make the exciting and lucrative move to becoming a profitable rare gold and silver coin investor. Contact them today for the ultimate in rare coin investing advice and success.
- 1 http://coins.about.com/od/goldrarecoininvesting/a/Three-Things-You-Should-Know-Before-You-Buy-Gold-Coins.htm
- 2 http://www.netplaces.com/coin-collecting/grading-coins/
- 3 http://www.netplaces.com/coin-collecting/welcome-to-coin-collecting/defining-coin-collecting.htm