{"id":38173,"date":"2022-09-09T15:26:56","date_gmt":"2022-09-09T22:26:56","guid":{"rendered":"https:\/\/goldco.com\/?p=38173"},"modified":"2024-09-03T13:15:49","modified_gmt":"2024-09-03T20:15:49","slug":"getting-started-with-gold-and-silver-coin-grading","status":"publish","type":"post","link":"https:\/\/goldco.com\/getting-started-with-gold-and-silver-coin-grading\/","title":{"rendered":"Getting Started With Gold and Silver: Coin Grading"},"content":{"rendered":"

When it comes to buying gold and silver, there are some things you\u2019re going to want to know about even if you\u2019re never going to put that knowledge to use. If you\u2019re like most people looking to protect your wealth, one of those pieces of knowledge that\u2019s useful to have is knowing about coin grading.<\/p>\n

For those people looking to protect retirement savings with gold and silver, especially when buying gold and silver through a gold IRA<\/a>, coin grading isn\u2019t going to come into play. It\u2019s important to remember that a gold IRA, like any other IRA, cannot own collectible coins, only bullion coins. Bullion coins aren\u2019t graded, while collectible coins are. And we\u2019ve discussed the difference between bullion coins and collectible coins<\/a> before.<\/p>\n

But knowing about coin grading can help you determine when someone is trying to offer you collectible coins versus bullion coins. And if you decide after buying gold and silver bullion coins that you want to branch off to do a little gold and silver coin collecting, knowing about coin grading can come in handy.<\/p>\n

Mint State vs. Proof State<\/h2>\n

There are two primary types of coins when it comes to grading: mint state and proof state. Mint state means coins that come straight from the mint with minimal, if any, extra handling.<\/p>\n

For circulating coins, these are coins that come straight off the production line into bags to get sorted or shipped. Some special mint state coins, such as those used to produce mint sets, may see special handling to make sure that they don\u2019t receive bag marks, but otherwise these coins are going to get knocked around a fair bit in handling.<\/p>\n

Proof coins, by contrast, receive special care from the outset. The dies used to produce them are often polished to produce a mirror finish on the flat parts of the coin\u2019s surface. Dies are replaced more often, and are often used on special presses operated by a single individual.<\/p>\n

The blanks used to make proof coins are often polished first, then struck multiple times to ensure that the coin\u2019s details are ultra-crisp. Each coin is then inspected under a magnifying glass or microscope to ensure it is free of defects, and handled with white gloves. Rejection rates can be high, as often only the most perfect coins are released for sale.<\/p>\n

As you might expect, the prices for proof coins reflect that extra care and handling, as well as the smaller number of coins produced. Proof coins are normally considered collectible coins, although there are proof versions of bullion coins produced too, such as proof versions of the American Silver Eagle and American Gold Eagle bullion coins.<\/p>\n

Where some people can be led astray, however, is in believing that proof coins will always be significantly more valuable than mint state coins. Yes, proof coins generally retain higher premiums than mint state coins, but that generally is the result of collector demand.<\/p>\n

It can happen that during times of rising gold and silver prices, the intrinsic metal value of proof coins rises so much that the premium on proof coins versus mint state coins doesn\u2019t rise as much, or that the price of proof coins doesn\u2019t rise as much as that of mint state coins. So if you\u2019re looking to buy proof coins, that is something you\u2019re going to want to be aware of.<\/p>\n

Coin Condition<\/h2>\n

Coin condition largely won\u2019t matter if you\u2019re buying gold and silver coins for a gold IRA. Many of those coins will come directly from mints, or pass through wholesalers and distributors in packaging that keeps them relatively free from damage.<\/p>\n

Most people who buy gold and silver coins are also going to buy them for their gold and silver content, not for their numismatic value or collectibility, so condition generally isn\u2019t a consideration. Still, there are some people who may get their hands on a particularly good example of an American Silver Eagle or American Gold Eagle and want to have it examined by a numismatic grading service.<\/p>\n

This isn\u2019t going to be something you can do with gold and silver coins held in an IRA, because those coins are going to be in the physical possession of a bullion depository<\/a> that works with your IRA custodian to safeguard your IRA assets. But if you buy gold and silver coins to store at home, getting your coins graded is certainly something you are free to do.<\/p>\n

In general, coins are graded on the following scale:<\/p>\n