The Five Components of Coin Grading
Winter Copyright © November 2001
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A "grade" is a shorthand devised by numismatists to indicate
the appearance of a coin. In other words, if one collector tells another
that he has an About Uncirculated-50 Charlotte half eagle, both collectors
should have an expectation of what the coin should look like, even if one
has never seen it, due to the implications of its grade.
For many years, there were a relatively small number of adjectival
grades. Grading became more "scientific" in the 1940's when the
numerical grading scale was invented by Dr. William Sheldon. This scale,
which ranged from 1 to 70, was originally devised to ascertain values of
1793-1814 Large Cents by ascribing a basal value to each variety and
multiplying this value by the grade in order to determine a price.
The Sheldon grading scale is now used by most numismatists. Newcomers
tend to complain that there are "too many grades" but
experienced graders appreciate that there can be a huge range in quality
between specific ranges.
To better understand coin grading, it is important to study the major
components of grade. When I grade a coin, I employ five important
individual components which, when taken into consideration as a whole,
help me determine my opinion of a coin's grade. These individual
components are strike, surface preservation, luster, coloration and eye
Strike: The strike of a coin refers to the process of stamping a
design onto a planchet or a blank. A coin can have either a strong or a
weak strike. Much of this depends on a coin's design. As an example,
certain designs (such as the Type II gold dollar) have the highest relief
element on the obverse directly aligned with the highest relief element on
the reverse. This means that weakly struck coins are the rule for these
designs. Other designs (such as the Indian Head quarter eagle) may be
found with sharp strikes on certain issues and weak strikes on others.
Generally speaking, strike is not a major element in determining the
grade of a coin unless it is in a series in which value is related to
strike. In a series such as Mercury Dimes, where a PCGS MS-66 1945 dime is
worth $15 and the same coin with a full strike (designated in this series
as "Full Bands") is worth $7,500, strike is a huge element. In
all but a handful of circumstances, strike does not play a critical role
in determining the value or United States gold coins.
Surface Preservation: The number of marks on a coin and their
placement are important factors in determining grade. There is no set
formula that says "X" number of marks on a coin's surface means
that it grades "Y." But there are some fairly normalized
standards in terms of the importance of an abrasion's location.
If a very nice coin has a deep mark that it is well-hidden on the
reverse, it tends not to be severely penalized. But if the exact same mark
was located in a prominent focal point on the obverse (the cheek on a
Liberty Head double eagle, as an example) it would be penalized
Coins that have a very open, uncluttered design tend to show marks more
obviously than those with tight, compact designs. For this reason, the
intensity of the marks on a Liberty double eagle play a greater role in
determining grade than on a Type Three gold dollar.
Certain types of coins are known for showing greater concentrations of
marks than others. As an example, the quarter eagles struck from 1821 to
1834 did not see ready circulation. They tend to have reasonably clean
surfaces. Indian Head quarter eagles, on the other hand, saw a greater
degree of circulation. It is much harder to find examples that do not have
the marks, scratches and scuffmarks associated with circulation and/or
On United States gold coins, surface preservation is very important in
Luster: Depending on the design, mint of origin and the metal
used a coin may have a variety of surface textures. These include satiny,
frosty, semi-prooflike and prooflike. When analyzing the surface of a coin
in regards to grade, there are two things to look for: the amount of the
original surface (or "skin") that is intact and the amount (and
location) of marks.
There is really not one type of surface that is "better" than
another. In certain series, such as Morgan dollars, premiums are paid for
pieces with mirror-like surfaces. In most other series, prooflike coins
may be regarded as interesting but not necessarily worth a premium.
On 19th century United States gold coins, I am most fond of a frosty
texture. This texture can be found on issues from all mints but it is most
closely associated with Philadelphia and San Francisco.
Luster is especially important in determining if a coin is Uncirculated
or not. A Mint State coin is, technically, free of wear and should not
have major breaks in the luster. However, this is often not the case for
coins graded Mint State-60 and Mint State-61. These coins will typically
show breaks in the luster; perhaps as a result of a light cleaning or
"rub" that occurs from improper storage in an album. A coin that
is not Uncirculated will show a greater amount of breaks in the luster
and, obviously, a smaller amount of luster.
Luster is another very important component in determining the grade of
a United States gold coin.
Coloration: Color is the most subjective factor in
determining grade. A coin is either well struck or it's not well struck;
this is not open to debate. But a gold coin that shows deep green-gold
color may be attractive to one viewer and unattractive to another. In my
opinion, attractive original coloration greatly enhances the appearance of
Gold is a relatively inert metal and not subject to as much variance in
coloration as silver or copper. However, a wide range of colors may be
present on gold coins.
Coins from the Charlotte and Dahlonega mints have very distinctive
coloration as a result of the amount of silver or copper that was part of
the gold found in these sources. Philadelphia and San Francisco pieces
have much different coloration.
The majority of United States gold coins have been cleaned or dipped at
one time. As a result, they no longer display original coloration. As
collectors become more savvy, they are often attracted to coins with
pleasing natural color. In many series, it is almost impossible to find
original pieces. In the near future, it is likely that totally original
pieces will be accorded a strong premium over "typical"
Color is not as important a factor in determining the grade of a gold
coin as it is on a silver or copper coin.
Eye Appeal: The four individual components listed above, when
combined, form an all-encompassing component that is called "eye
appeal." This is a fairly self-explanatory term. A coin that has good
eye appeal may be very strong in one area (excellent luster, for example)
and good in another (nice but not great color). If a coin is negative in
one area (very heavy marks, for example) but acceptable in all others, it
is still likely to be noted as having below-average eye appeal.
The concept of eye appeal seems subjective but it is really not. Most
sophisticated coin buyers will agree that a certain coin has good or bad
eye appeal. But it does require a certain level of knowledge to make this
There are some specific dates or types that almost always come with
poor eye appeal and a coin that is somewhat attractive may be considered
to have good eye appeal "for the date." As an example, all known
1870-CC double eagles have heavily abraded surfaces. A coin that has
typical marks but none located in very prime focal points may be looked at
as having good eye appeal for the issue. But if this were any other date,
the exact same coin might be regarded as having poor eye appeal. It takes
in-depth knowledge of a specific series to make this determination.
Grading is an important subject and this article could easily have been
two or three times longer. If you have any questions regarding the five
components of coin grading, please feel free to email me at firstname.lastname@example.org
and I will do my best to answer them.
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