What to look for (and the scams to avoid) when pricing numismatic coins for collection and investment
If you are considering investing in collectible coins, the Federal Trade Commission — the nation’s leading consumer protection agency — has an urgent message just for you: research, research, research.
According to the agency, collectors and investors cannot afford to purchase numismatic coins without doing an in-depth investigation first.
When it comes to collectible and rare coins, there isn’t a one-size-fits-all pricing index. That means accurate value estimates can sometimes be difficult.
Placing a dollar value on bullion coins and bars like the American Gold Eagle is pretty simple: take the weight in ounces and multiply it by the current spot price and add a few percent for markup.
Yet finding the right dollar value for a collector coin can be a bit more complicated. The spot price is a start — though barely scratching the surface — as several other factors are used in determining a collector coin’s true value in U.S. Dollars.
Some determinants are rather subjective, meaning it’s up to the individual assessor. A coin from the Civil War will be more valuable to certain groups of people, for example.
Important Factors for Determining a Coin’s True Worth
- Aesthetic Value> – Subjective opinions like the aesthetic beauty of a rare coin is another major factor in determining its value. One of the reasons the Chinese Silver Panda sells so well is because of the striking design on the front and the intricate Chinese symbols on the reverse. Collectors want to buy coins they can show off, which is why appearances matter in numismatics.
- Grade – Akin to a coin’s aesthetic value is its grade, or condition. Professional graders are often hired to examine a coin’s wear based on a set of criteria. Then they assign the coin a number from 1 to 70, with higher numbers being better. Seemingly minor distinctions between grades can mean big differences in the value of a coin.
- Mint Year – The year a coin was produced is also very important. Sometimes one mint year was less circulated (and more rare) than another, and just a single year’s difference can have a dramatic effect on a coin’s value.
Common Coin Cons
Buying, selling and investing in collectible coins can be profitable. And like any market, there are plenty of scammers looking to swindle unsuspecting coin shoppers.
Here are two common coin cons to watch out for:
- False Grading Claims – Dishonest individual coin sellers may try to inflate the grade of their coins, or deflate the condition of a coin you are trying to sell them. Some dealers use in-house graders or unprofessional grading services that give estimates that are unfairly favorable to the dealer. When buying a rare coin, walk away if the case appears to have been tampered with, the documents seem altered, or the dealer refuses to let you examine the coin case before buying.
- Current Value Misinformation – An unscrupulous dealer may overprice their coins or deceive their customers about its current value. For instance, they may charge $850 for a $5 Indian Head gold coin in perfect condition, when you could buy the same piece online for half the price.
Build Your Coin Collection with Secure, Online Ordering
One way to ensure you are getting top-graded collectible coins is through Provident Metals.
Our gold and silver coins are sold in prime condition at unbeatable prices. Browse our online store to pick your favorites — anytime, day or night — then use our secure payment system to have them shipped straight to your door.
The advantage of buying bullion online is that you can quickly do your own research to make sure you are getting a fair and accurate price before finalizing an order. In addition, our knowledge center and blog give customers a range of resources to make informed investment decisions.
If you want to sell or trade to us, we offer top dollar for your bullion and numismatic gold, silver, platinum or palladium. At Provident Metals, we are always looking for ways to replenish our inventory with quality precious metal bullion and coins.