Coin grading

Coin grading is the process undertaken to ascertain the ‘grade’ of a coin - its condition. This is generally a formal process, carried out by professional, recognised individuals and companies to ensure an impartial and accurate decision has been made. It can be more informally applied however, and the term 'coin grade' will sometimes be used by those making a more general statement about condition. Coin grading can have a significant impact on a coins value with some collectors, so it is taken seriously by all involved.

At BullionByPost we stock a wide selection of graded coins including graded Sovereigns, perfect for collectors looking for professionally appraised items.

For coin collectors or numismatists it is important to be able to classify and grade coins and, confusingly, today there are many varied and widely accepted systems. All have the objective of clearly defining the quality of a coin's original strike, its state of preservation, lustre, colour, and overall attractiveness.

Mints primarily produce coins to serve as circulated currency. Historically, before mass production, tests or proofs were produced to ensure quality and correct any faults. These original proof coins are very rare and incredibly collectible.

Today, proof coins are deliberately struck for collector purposes. These exquisite coins are made to exacting standards, and are given repeat impressions or pressings for extra clarity of design. They are then immediately stored in tamper-proof containers or capsules to ensure the highest quality condition. Proof coins are therefore the most commonly chosen coins to be graded.

Coin grading can - and often will be - carried out on all types of coins however, including bullion and even circulating currency coins. We often see some confusion over coin grading automatically improving the value of a coin - this is not the case. A highly graded bullion coin, such as an MS9 or MS70 coin may command a small premium over a non-graded coin, but it is not guaranteed. Anything below that grade would likely be worth no more, and given the cost to have a coin graded be end up not being worth it.

An example of professionally graded coin, which has then been slabbed.

As coin grading deals with appearance, it is highly subjective, and experts will sometimes disagree over a coin’s grade. It should also be noted that as coin grading deals with collectable coins it is also subjective as to it's overall value. Some collectors will like to buy a coin that has been professionally graded and slabbed as above. This ensures the coin has been independently appraised, and sealed in that condition.

Other collectors may prefer to have the coin as it was originally sold. In the case of proof coins for example, the issuing mint will typically provide the coin in a unique presentation box, and may have produced an accompanying booklet or certificate. The slabbed coin would no longer fit in this box.

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Coin Grades

As mentioned above, there are several different coin grades that may be used. Originally coin grades were mainly described in simple words, but the system has evolved over the years to become much more precise.

In the early years of coin collecting, three general terms (other than proof) were used by numismatists to describe the grade of coins:

1 Good - where circulation has worn the surface of the coin but where major details were still visible.

2 Fine - where features were less worn and some of mint's original lustre still shows with the major and minor detail visible.

3 Uncirculated - where the features of the coin were sharp, and the lustre approaching the state of a new coin.

These three terms are still used but, as the popularity of coin collecting grew, numismatists refined the classification to eight new levels of coin grades:

1 - Good
2 - Very Good
3 - Fine
4 - Very Fine
5 - Extremely Fine
6 - About Uncirculated
7 - Mint State
8 - Mint State (perfect)

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The Sheldon Coin Grading System

In 1948, US numismatist Dr. William Herbert Sheldon sought to expand the scope of coin grading. Not content with eight grades, Sheldon further refined the system to a total of 70 grades.

The 'Sheldon System' was rapidly adopted in American coin collecting circles and has also become widely accepted across the world as the de-facto standard of quality for graded coins.

The Sheldon system is used today by the Numismatic Guaranty Company - NGC. They are one of the world's most respected coin grading companies, and many collectors will be familiar with their coin grades and slabs. The NGC follow the Sheldon Coin Grading System.

This means a coin should have a two letter designation to denote the type of coin and quality of finish. This will be followed by the number between 1 and 70. There may be other unique designations such as a + or * for high quality appeal or the quality of the strike. Therefore most collectors would look for coins in the 60 - 70 range for something of high quality. Older circulated coins like the Sovereign however may be found more commonly in the 40 - 50 range.

Read a full breakdown of the NGC's coin grading system.

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European Coin Grades

Many European countries have also developed their own particular grading systems. This can range from translations of the terms in the Sheldon Scale, to quite different terms, or even numerical based systems! If buying from a European collector it can be worth double checking in case the grade given to the coin might mean something different than you expect. The rise of the internet has of course centralised and standardised many of the practices however, making it easier than ever to check the grade for any coin.

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Coin Valuation

Coin collecting is a worldwide multi-billion dollar industry. For ease of trading, pricing and insurance purposes, accurate classification is important to all those involved to ensure a coin valuation is accurate.

There are multiple professional grading services around the world, but the Professional Coin Grading Service (PCGS), and the Numismatic Guaranty Company (NGC) are the best-known two. These companies will grade a coin for a fee, certify the grade, and then seal the coin is a special tamper-proof holder as part of the certification process.

Different coin grading services also have their own additional grades within the Sheldon system, with unique tiers, sometimes exclusive to specific coins.

BullionByPost has a growing collection of rare coins, covering periods of British, European and American history, including a number of graded coins. Customers can call our support team on 0121 634 8060 or email support@bullionbypost.co.uk for further information.