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Rare Coin Grading Scale

The U.S. Gold Bureau Collected Data on Collecting Rare Coins & Explains the 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.

Certification 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 by President Roosevelt in 1933, 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 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 Description Value
1909 D (Denver) 3,423,560 MS60 $5 Half Eagle $600.00
1909 O (New Orleans) 34,200 MS60 $5 Half Eagle $29,100.00
*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

Key Date / Semi - Rare Dates

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 D 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.

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.