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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
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.
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.
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
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
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.