Coin grading explained
It is important to know the grade of a rare coin before you buy it because this gives you an indication of its value. A coin’s grade is based on how much wear it has had since it was minted. Determining the condition of a coin and giving it a rating is a subjective business that varies from person to person. Fortunately there are several scales in existence that try to standardize coin evaluations. Knowing what these scales are and how the grading works will help you to distinguish differences between coins before you make a coin investment.
The most popular and widely used system for determining the grade of a coin is the Sheldon scale. It was created in 1948 by William Herbert Sheldon from the U.S.in an effort to introduce more precise grading descriptions. The Sheldon scale ranges from 0 to 70, where 0 is a featureless disc barely discernible as a coin, and 70 is a perfect coin with no wear whatsoever.
The Sheldon scale is used in conjunction with what are known as “adjectival grades.” These are subjective coin grades that were used prior to the introduction of the Sheldon coin grading scale. They are used to help clarify the numeric equivalent. Some examples of adjectival grades are Poor (P), Fair (FR), About Good (AG), Good (G), Very Good (VG) etc.A coin grade is therefore composed of both letters and numbers so that the grades become P1, FR2, AG3, G4, G6, VG8 and so on.
At the top end of the scale are coins that are uncirculated, which means they were never used in commerce. These coins are known as Mint State (MS) coins and fall in the scale from MS60 to MS70. A Mint State coin can range from one that is covered with nicks and scratches (MS60) to a flawless one without any marks (MS70). You may also come across the symbol PR or PF. It stands for “Proof.” Proof coins are also uncirculated but they are made in a different way which gives them a shiny appearance.
At present, there are two American companies that dominate the coin grading trade, as they are perceived as the most reliable and credible at grading coins. They’ve been in business since 1985 and operate in over 70 countries around the world. They are Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (or NGC). A South African Grading company has been established, South African Numismatic Grading Services (SANGS), which also grades South African coins for collectors and investors. Coins are usually submitted to one of these grading services for certification. An expert will examine the coin, assign a grade, and then encapsulate the coin in a hard plastic slab with a label indicating the coin type, date, mint mark, variety and grade.
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