This page provides information useful to the coin collector and investor, such as, coin investment analysis, history of coins, coin grading, buying and selling coins, etc...

GLOSSARY OF GOLD AND SILVER RELATED TERMS

To alloy a precious metal is to introduce a quantity of another metal into it. Gold may be alloyed with base metal or with silver. As an example, White Gold is an alloy of gold and nickel or palladium.

To heat metal until it becomes soft enough to work into desired shapes, or to receive stamped designs (such as in coin striking). The degree of annealing varies depending upon the metal's use, as some uses call for greater softness or hardness than others. Gold, being naturally soft, requires less annealing that other metals.

The official determination, by a licensed assayer, of the bullion content in an object (usually a gold or silver bar). The assaying of metal requires testing that includes a measurement of its weight by specific gravity. See figure 1 for an example of an Assayer’s report associated with a Palladium bar.

Figure 1 – 1 Ounce Palladium bar and the associated Assayer’s report as to material, fineness, and weight.

A chemical widely used in the jewelry industry, especially for testing the fineness of gold. Aqua Regia is made of three parts hydrochloric acid and one part nitric acid.

A scale operating solely by the balance principal, rather than by springs or the use of a sliding weight. It consists of two pans suspended on hangers, connected at the top to a horizontal bar containing a pivot at the center. When empty, the pans are at precisely equal distance from the ground. For weighing, the object(s) to be weighed are placed in one pan, and counterweights of established weight in the other. The object(s) weight is determined by the weight of counterweights needed to precisely balance it.

Catch-all term used to refer to all non-precious metals, such as copper, zinc, nickel, copper, lead, etc. These are the metals used in industrial applications and in alloying gold, silver and platinum.

BRICK A gold brick, also known as bullion bar, weighs 1,000 troy ounces, or approximately 68.5 pounds.

A high grade of silver, consisting of 95.84% pure silver and 4.16% alloy. Its use is chiefly for tableware and decorative articles. The hallmark is a likeness of Britannia, which is the symbol of the British Commonwealth .

A once-prevalent method of criminally acquiring bullion by trimming small portions from coin edges and then passing the coins at their face value. This occurred in the days of hammered coins, whose edges were not perfectly symmetrical. The edges of coins are now reeded to make any removal of metal from the edge more obvious.

A grade of sliver whose content is .90 fine, or 90% pure silver and 10% alloy (usually copper). The term arose because the majority of U.S. silver coins have about this composition. However, many foreign silver coins vary in composition. It should not be presumed, as it sometimes mistakenly is, that coin silver is made from melted coins. It could be, but it can just as well be manufactured from other silver and alloy.

The discoloration or patina to which old, neglected (not regularly polished) sliver can fall prey results from acids or oxides acting upon chemical properties in the metal. It can generally be removed or at least diminished, by treatment with common solvent (silver cleaner). However, in the case of collectors' items hundreds of years old, such as coins or religious objects, experts generally advise against its removal.

DICHROMATE A chemical solution used for testing the composition of metal article. Dichromate is composed of potassium dichromate and nitric acid.

A natural mixture of gold and silver, from which the earliest true coins were made (those of the Lydians of Eastern Asia, in the 7th or 8th century B.C.).

A recessed mark left upon an object as the result of filing, to test its metallic content. File marks are occasionally found on gold coins, tested for the possibility of being counterfeit. They also appear on items that proved to be of low bullion or non-bullion content, as the majority of tested objects found to be of solid gold or sliver are sent for melting.

The degree of purity in an object of precious metal, usually expressed by hundredths in decimal form (such as .995, which means 99.5 parts pure and 0.05 part of alloy). It may also be written in terms of a percentage, in the case of the example given, the percentage equivalent would be 99.5%. The highest degree of obtainable fineness in gold or sliver is expressed as .9999 or 9999, rather than 1.0000, because of the impossibility of guaranteeing that all minor traces of incidental metallic substances have been removed. See figure 2 for an example of fineness markings on a Canadian silver bullion coin.

Figure 2 – The reverse of a 2009 Canadian silver Maple Leaf coin has 9999 Fine Silver marked on the coin. Most coins that trade as bullion coins have similar fineness markings.

Gold filled articles are similar to plated. They have an exterior of gold and a core of base metal, usually copper. The difference is in the method of application. Plated objects are shaped and then bullion coated by electroplating, in which the soft gold takes the object's form.

When found on an article that appears made of gold, these letters indicate that the gold is merely surface plating (G.P. = gold plated).

A decorative marking sometimes (but not invariably) found on foreign made sliver articles, indicating that the metal is of sterling quality or higher. The origin of the word hallmark dates to the later Middle Ages in England , when silversmiths were members of the Guildhall.

This normally refers to the U.S. 90 percent silver coins. See COIN SILVER. See figure 3 for an example of coins commonly traded for their melt value.

Figure 3 – Examples of common US coins dating before 1964 that trade for their silver melt value rather than carry a numismatic premium. Higher grades or rarer dates of coins within these series of coins carry a substantial premium above the bullion or melt value of the coins.

The method by which fineness of gold is expressed. Pure unalloyed gold is 24 karat. As alloy metal is added (usually copper, for strength or to reduce the price), the karat value declines: 22K, 20K, 18K and so on. The lowest grade of gold to carry a karat marking is 10K, or, in Great Britain , 9K. Most gold coins are 20K or 21K. Jewelry is commonly made of 12K to 18K. The word "karat" derives from the carob bean, used as a measure of weight in the ancient world. When spelled "carat" it refers to the weight of a precious gem and is not associated with fineness.

The bullion value of any object containing precious metal. When sold for melting, the full price of an item's bullion content is not received but only a percentage of it. Some articles, such as gold or silver coins of key dates or mintmarks, have a higher retail or "numismatic" value than melt value and obviously should not be melted.

The technique of recovery of gold particles from streams or river beds, practiced widely by prospectors in the rush of 1849 and to a lesser extent in South Africa In the 1870's. Gravel and small rocks are scooped into a pan along with water. After shaking, the upper layers are poured away. Gold, being heavier than common rock or other minerals will settle on the pan bottom.

The covering of base metal articles with a layer of gold or sliver, which may be of various thicknesses and grades. Presence of plating may be discovered by filing and using nitric acid, or subjecting the item to specific gravity testing. See the related term GOLD FILLED.

The four primary precious metals that are commonly traded in coin form and used in the jewelry industry are: gold, sliver, palladium, and platinum. All others (except derivatives of these four) are known technically as "base metal." Of course, the preciousness of precious metals varies, as does the baseness of base metals.

The proportion of precious metal in an object vs. base metal. A purity of .900 would mean a content of 90% precious metal and 10% base metal alloy, or a ratio of 9-to-1. See the related term FINENESS.

The faint impressed lines, running vertically from reverse to obverse, found on the edges of many coins struck by machinery. The original purpose of these lines was to discourage clipping, or removing minute portions of metal from the edges and then passing the coin at face value. See the related term CLIPPING.

Material made of or containing precious metal, which has no value beyond that of its bullion content and is suitable only for melting. Old spectacle frames, jewelry containing gold, and gold dental crowns are examples of typical scrap.

A method of testing the composition of metallic objects, which measures their displacement of water in relation to their bulk. Each metal element has an established specific gravity (or density). Specific gravity of 0.999 fine silver is 10.50. For Sterling silver (0.925 fine) the Specific Gravity is 10.31. The Specific gravity of 0.999 fine (24K) gold is 19.32.

"Spot Price" is the price at which precious metal is being traded at any given time. Spot prices are always calculated on the basis of one full troy ounce and must be multiplied or divided to arrive at prices for larger or smaller quantities. The spot price is achieved in day to day trading in gold and other precious metals markets, just as are prices for stocks and other commodities. Generally, the London spot is used as the world barometer, after conversion from pounds to dollars.

The amount of difference permitted by law between the karat marking on a gold article and the actual fineness of gold it contains. Tolerances up to one full karat are allowable, depending on circumstances (such as whether solder has been used in manufacture.) Tolerances are permitted only on craft or other manufactured items, not on bars or Ingots. The term Fineness is used for coins made of precious metals.

A stone, of basalt or slate, used in testing gold to determine its karat. Touchstones are used in combination with testing needles and Aqua Regia.

An alloy of gold that contains at least one white metal, such as, nickel or palladium.

Introduction to Collecting Sales Tax Tokens

Collecting Sales Tax Tokens has been a part of numismatics for years and can be a lot of fun. This brief article gives the collector an introduction to the origins, identification, and current prices of common tax tokens.

Currently there are no known tax tokens in circulation. They were mainly products of the depression of the 1930's along with wooden nickels, depression scrip, and other kinds of emergency money. They were meant to assist in the collection of consumer's sales taxes when the amount due was only a fraction of a cent. During the Great Depression people did not like the idea of paying a whole penny tax on a small purchase, say, 25 cents. The tokens served as a useful device to make the new tax laws more palatable to the buying public. Establishing the use of these tokens by states normally involved a vigorous public debate. They were even opposed by the federal government on the grounds that they were “money” and thus competed with its constitutional coinage responsibilities. However, this latter opposition did not seriously materialize. Mintage estimates for many tax token run into the millions, this is high when compared to merchant tokens which typically have mintages below 1000.

Prior to state issue, there were locally issued tokens by private individuals and groups. These were mostly made of paper or cardboard, with some made of metal and wood. The earliest known non-state issued tokens were the tokens made in Illinois communities during the spring of 1933. They were short-lived and as unpopular as the forth coming state issues. Privately produced tokens from Washington State were issued in wood and cardboard and only were in service from May to August, 1935. They were soon replaced by state issued cardboard and metal tokens. In Ohio the state used punch cards instead of tokens and also issued a complex series of whole-cent receipts.

The first widely distributed state issued tokens were distributed by Washington State in May 1935. By the end of World War II tokens had been virtually discontinued. Missouri was the last to use tax tokens which lasted until 1961. Ohio discontinued use of the paper receipts in 1962.

Tokens came in denominations of Mills. A Mill is equal to 1/10th of a cent. They were also issued in fractions of a cent, such as, 5 Mills. Washington State issued tokens that were at values greater than the standard Mill.

The state tax tokens are found in many materials: aluminum, copper, brass, zinc, cardboard, fiber, and plastic. The tokens made of fibers, cardboard, and plastic come in a wide variety of shades. The design for all of the state issued plastic tokens is the same except for the name of the issuing state. Metal tokens were issued from about 1935 to 1940, fibers from 1941 to 1943, and plastics from 1943 and on.

Most of state-issued tax tokens are 22-23 mm in diameter or 16 mm in diameter. Most came with some
form of center punched round, square, triangular, or cross shaped hole. The size of the punch varied in width or diameter from one or four millimeters. See figure 1 for examples of common tax tokens. There are many varieties in the letterings of the legends and the designs on the tokens. Several tokens exist without a center punch which they normally should have had. Others have off-center punches and double punches. These are a result of mistakes during the manufacture of the tokens.

Figure 1 – Colorado (aluminum), Oklahoma (fiber), Alabama (zinc), and Missouri (plastic) tax tokens.

Most state issues are still plentiful and are available in uncirculated condition. The state series makes a simple and compact collection, and one can still get most of them at a cost varying from 50 cents to a few dollars each in uncirculated condition. Coin Dealers, eBay, and Antique Malls are good sources of the tokens.

U.S. State-Issued Sales Tax Tokens by Jerry F. Schimmel, 2nd Edition Revised, 1980.

United States Sales Tax Tokens and Stamps: A History and Catalog, by Merlin K. Malehorn and Tim Davenport. 1993.

Coin Market Update
(5/19/10)
By Brad Welles
Solid Rock Rarities
316-250-7287
www.CoinsWorthSaving.com

Overview:
The past three months have been dominated by rising spot gold and silver prices. Bullion coins and generic gold have benefited the most in terms of price increase. The rest of the coin market is generally stable to rising slightly. Affordably priced collector and type coins continue to do well.

What’s Hot: Bullion coins and bars, generic gold coins (especially $10’s and $20’s), large cents, silver three cent pieces, seated half dollars, early dollars, and Barber dimes, quarters, and halves.
What’s Not: High grade modern coins. Lincoln cents have cooled off. Currency has stabilized but is not yet increasing.

On our Shopping List: Type 1 Liberty $20’s (1850-1866), Carson City gold, rare gold in all denominations especially $5 and below, early type coins (1793-1838), key dates in all series, and selected classic gold and silver commemoratives.

Ask us for further information on any of the above, or call any time we can assist you.

H.R. 4248 – Repeal of Sales Tax for Coins and Precious Metals and More…

On December 9, 2009 Representative Ron Paul introduced H.R. 4248 the Free Competition in Currency Act of 2009. The following is a brief summary of the bill: (Sec. 2) Repeals the federal law establishing U.S. coins, currency, and reserve notes as legal tender for all debts, public charges, taxes, and dues. (Sec. 3) Prohibits any tax on any coin, medal, token, or gold, silver, platinum, palladium, or rhodium bullion issued by a state, the United States, a foreign government, or any other person. Prohibits states from assessing any tax or fee on any currency or other monetary instrument that is used in interstate or foreign commerce and that has legal tender status under the Constitution. (Sec. 4) Repeals provisions of the federal criminal code relating to uttering coins of gold, silver, or other metal for use as current money and making or possessing likenesses of such coins. Abates any current prosecution under such provisions and nullifies any previous convictions. A complete copy of the bill can be downloaded from http://www.gpo.gov/fdsys/pkg/BILLS-111hr4248IH/pdf/BILLS-111hr4248IH.pdf.

Since I am not a Lawyer or Federal Economist, I will not venture a guess on the impact Section 2 would have on the economy. That is, what happens to our “green backs” once we can no longer use them to pay for day-to-day business transactions. When we go to lunch at McDonald’s, what form of currency would we pay with? In Section 3, the removal of taxes on coins and precious metals would be very helpful for coin dealers and would put dealers in all states on a level playing field. Some states, such as Kansas, do require sales tax on coins and precious metal purchases. Other states, such as Missouri, don’t require a sales tax on coins and precious metals. If I am reading Section 4 correctly, individuals could start minting their own coins for use in day-to-day transactions. How would that work?

Currently this bill is in the Subcommittee on Commercial and Administrative Law. This Subcommittee is lead by the Democratic Representative Steve Cohen from Tennessee and the Republican Trent Franks from Arizona. You may want to contact these two individuals to let them know you would like to see the elimination of taxes on coins and precious metals (or any other parts of the Bill you like). Contact information for these two Representatives can be found at http://directory.usayfoundation.org/.

Coin Market Update
(2/9/10)

Overview:
The 2009 coin market was generally characterized by strong price increases in generic (common) gold, weakness in higher priced coins ($15,000 and up), and a steady performance by collector coins (lower priced coins in popular series). The New Year is opening in markedly different fashion. Generic gold is down on lower spot gold prices and reduced TV and telemarketer promotion. Higher priced coins seem to have stabilized. Collector coins continue their steady march. Price disparities between nice coins and off-quality coins are increasing, as nicer coins steadily disappear into long-term collections.

What’s Hot: Early (1793-1857) cents and half-cents, seated half dollars, most coins that are nice for the assigned grade.
What’s Not: Bullion coins and bars, generic gold coins (especially $10’s and $20’s), most silver dollars, high grade modern coins.
On our Shopping List: Type 1 Liberty $20’s (1850-1866), Carson City gold, rare gold in all denominations especially $5 and below, early type coins (1793-1838), key dates in all series, and selected classic gold and silver commemoratives.

How do High Gold Prices Affect Rare Coin Prices?
The market for gold and the market for rare coins are very different, but they can be related. This has been particularly true in the last few years, with gold and silver prices rising sharply. Positive effects on numismatic coins include:

On balance, rising prices for gold and other precious metals have been positive for rare coins over the past few years. Time will tell how long this continues.

Gold and silver bullion prices have tailed off over the last month. It may be a good time to buy for those who desire to accumulate bullion as a hedge against inflation or paper currency devaluation. For those with patience, we continue to favor rare coins; their price appreciation has consistently outperformed that of bullion over longer periods. Either way, we’re here to meet your coin-buying or selling needs. Feel free to contact us any time for more information on coin-related topics.

Coin Market Update (11/14/09)

Overview:
For the previous 5 years, virtually all parts of the coin market moved higher together. This year, different segments of the coin market have performed quite differently:

The tone of the market is now much more positive than over the summer. Time will tell whether recent softness is a pause in the coin bull market or a turning point. Historically, the best bet is to continue accumulating the coins defined by our “Coins Worth Saving” criteria, found at http://www.coinsworthsaving.com/Coins_Worth_Saving.html.

Even after rising coin prices for the past 5-6 years, there are some coins that look like bargains. The headlong rush into generic $10 and $20 gold and bullion coins has pulled money away from smaller gold denominations and rarer coins. When nice examples are available, we’re still buying Type 1 Liberty $20’s (1850-1866), Carson City gold, rare gold in all denominations especially $5 and below, early type coins (1793-1838), key dates in all series, and selected classic gold and silver commemoratives.

What’s a Really Nice Coin Worth?
Would you ever pay more than the listed retail price for a coin? Savvy dealers, collectors, and investors do it all the time. A coin lacking eye appeal may be a poor bargain at below wholesale price; a coin with great eye appeal may be a steal at a price above full retail. Price guides are based on average coins for the grade. In fact, it could be argued that most transactions picked up by the price guides are for below average coins – because the really nice coins for the grade inevitably get locked up in collections for many years. That’s why two coins certified in the same grade can sell for a price difference of 50% or even 100% in the same auction.

Glossary of Coin Grading Terms and Abbreviations
By Doug West, Ph.D.
www.investmentmetalsandcoins.com

In the world of collecting coins there are a wide variety of terms and abbreviations used to represent the grade or condition of a coin. Some are very helpful and others nearly meaningless. In this guide I will present some of the more commonly used useful terms and explain them.

About Good (AG-3) – Heavy wear with portions of the lettering, legends, and date worn smooth.

About (or Almost) Uncirculated (AU-50) – Traces of light wear on many of the high points. At least half the original mint luster is still present.

ANACS – Professional coin grading service. This is the oldest coin grading service and originally started with the American Numismatic Association (ANA).

BR – Brown. This is a designator that can follow the grade of a copper coin. It indicates the color of the coin is brown. Brown copper coins normally sell for less than red copper coins.

Cameo – This refers to the devices (portrait, legends, eagle, etc.) of the coin will be a duller texture than the fields of the coin. This is normally only seen in proof coins. See figure 1 for an example.

Cir. or Circulated – A coin that has some degree of wear. On the MS grading scale it could be from 1 to 59.

Choice About Uncirculated (AU-55) – There is only light wear at the high points of the coin. Most of the original mint luster is still present. AU-58 is a slightly higher grade than AU-55 and refers to coins that appear uncirculated at first glance but have a small trace of wear.

Choice Very Fine (VF-30) – Light, even wear on the surface and highest parts of the coin. All lettering and major features are clearly visible.

Choice Extremely Fine (EF-45 or XF-45) – Light overall wear on the highest points. All design features are very sharp. Some mint luster is still present.

Choice Uncirculated (MS-63) – An uncirculated coin with some distracting contact marks or blemishes in the prime focal areas (normally the obverse portrait). Mint luster may be dull or impaired.

Choice proof (PF-63) – Surfaces are reflective with only a few blemishes in the field of the coin. No major flaws or scratches.

DMPL – Deep Mirror Proof Like. These coins have surfaces that resemble the mirror like finish commonly found on proof coins. Morgan Silver dollars are the most common coins found with DMPL surfaces.

Extremely Fine (EF-40 or XF-40) – Light wear on the entire design. All features are sharp and well defined. Traces of mint luster may still be present.

FBL – Full Bell Lines. This refers to the horizontal lines across the bell on the reverse of the Franklin Half dollars. Choice or better uncirculated coins with Full Bells Lines command a premium price.

FSB – Full Split Bands. This refers to the horizontal bands on the reverse of a Mercury dime. Choice Uncirculated FSB Mercury dimes command a price premium.

FH – Full Head. This refers to the head of lady Liberty on a Standing Liberty Quarter. Example with a strong strike will have a full head. Typically, the head of Liberty is not fully detailed. Choice Uncirculated FH quarters command a price premium.

Fine (F-12) – Moderate to considerable even wear. The entire design is bold and all major legends are visible.

Gem Proof (PF-65) – Surfaces are brilliant with only very minor blemishes or surface flaws (barely noticeable marks or hairlines).

Good (G-4) – Heavy wear with the design visible but faint in areas. Many details are flat. Date is readable.

Mint State – same as uncirculated. This term refers to coins showing no trace of wear. Coins very due to strike and the handling the coin has received at the mint and the banking systems. See MS-60, MS-63, MS-65, and MS-70 for further details of the grading terminology.

NGC – Numismatic Guaranty Corporation. A professional coin grading service. See figure 2 for an example.

PCGS – Professional Coin Grading Service. A professional coin grading service.

Perfect Uncirculated (MS-70) – Showing no trace of wear. No evidence of scratches, handling, or contact marks. Few coins issued for general circulation are ever found in this condition.

Proof – A specially made coin that typically has very sharp detail, mirror-like surfaces, and is very lustrous. Proof refers to a method of manufacture and is commonly confused with the grade of the coin. See PF-60, PF-63, and PF-65 for further details of this grading terminology.

Proof (PF-60) – Surfaces may have several blemishes or scratches or light rub spots. Luster may be dull or heavily toned.

PL or Proof-Like – A coin that has surfaces that resemble that of a proof coin. See figure 2 for an example.

RD – Red. Color of a copper coin. Full red copper coins command a price premium over brown or red/brown coins.

Sheldon Grading Scale – A system of grading which was originally introduced by the late Dr. William H. Sheldon. During the 1970’s this system was widely adopted and is in wide use today. The Sheldon Scale consists of assigning numerical grades to a coin that range from 1 to 70. A grade of 1 is the lowest (Poor) and a grade of 70 is for a perfect coin. The designators are given below and a more complete explanation of each grade is presented in this article under the specific grade.
Poor -1
Fair – 2
Almost (About) Good – 4, 6
Very Good – 8, 10
Fine – 12, 15
Very Fine – 20, 25, 30, 35
Extremely Fine – 40, 45
Almost (About) Uncirculated – 50, 53, 55, 58
Mint State – 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70

Slider – A coin with possibly a trace of wear. It is hard to tell if the coin has actual circulation wear or if it has just been mishandled and appears to be slightly circulated.

Toned or Toning – a coin with surface oxidation. Most commonly seen in silver coins. The surface turns different shades of grey or black.

UC – Ultra Cameo. This refers to the devices (portrait, legends, eagle, etc.) of the coin will be a duller texture than the fields of the coin. This is normally only seen in proof coins. See figure 3 for an example.

Very Good (VG-8) – Well worn with main features clear with even wear. VG coins normally have a full rim.

Very Fine (VF-20) – Moderate wear on design high points. All major details are clear.

Whizzed – coin that has cleaned and/or rubbed with a fine wire brush to simulate an uncirculated coin. Use a 10X magnifier to look for very fine scratches on the surface of the coin to enhance its luster.

The Official American Numismatic Association Grading Standards for United States Coins, 6th edition. Edited by Kenneth Bressett.

Coin Market Update
(8/10/09)

Overview:
Summer is usually a quieter time in the coin market, and the summer of 2009 has been no exception. Sales volumes for most dealers, as well as prices in general, have tended toward the soft side. The big winner for the last three months was generic gold: common pre-1933 US gold coins. Generic gold benefited from both increasing spot gold prices and expanding numismatic premiums. Collector coins generally held their ground, while high dollar (over $15,000) coins remained soft. Reflecting this, the CoinAge Price Averages show an average gain of about 2.9% year-to-date in collector coins (VF grade), with a loss of about 3.6% year-to-date in very high end coins (MS-65).

Looking back a full year, most coin indices are anywhere from even (CCDN wholesale price index) to down about 5% (PCGS CU3000 Index at www.pcgs.com). The PCGS Generic Gold Index bucked the trend and is up 12.5% from a year ago. PCGS reports that 26,000 individual coins have increased in value compared to 12,600 that have declined in the past year. At least to this point, coins have certainly escaped the carnage that has ravaged other asset values.

What’s Hot: Generic gold leads the list. Nearly all gold denominations have been strong, with the smaller denominations ($1, $2.50, $5) now joining the $10 and $20 gold coins in the move up. Early 19th century copper (half cents and cents) and better date liberty seated dollars have been strong.
What’s Not: High grade modern issues, high dollar ($15,000+) coins, most currency. Lincoln cents have slipped a little after earlier strength. Some key dates in popular collector series have been soft. The $3 gold denomination has been a little soft following a multi-year run-up.

Looking Ahead:
Prices seem to be leveling out as we head into the fall. Early reports from the bell weather ANA show in Los Angeles indicate some firming. It’s too early to call an end to the softness in coin prices. After muscling higher for seven plus years, the current pullback has been notably mild - there may be more to come. In addition, precious metals prices can be unpredictable and will affect the prices of some coins.

At Solid Rock Rarities, we continue to buy nicer coins whenever the opportunity is presented. Rare coins have increased in value by about 2800% since 1970. They’re highly liquid, easy to store, and beautiful to behold. We specialize in the coins that have historically increased in value: gold coins, early type coins, and key dates. See our criteria for “coins worth saving” on our website at http://www.coinsworthsaving.com/Coins_Worth_Saving.html.

Feel free to contact us any time for more information on coin-related topics.

Brad Welles
Solid Rock Rarities
316-250-7287

www.CoinsWorthSaving.com

Price Analysis of 1956 to 2007 US Proof Sets

By Doug West, Ph.D.
July 2009

The prices of US Proof sets can be analyzed to determine which set’s prices are high or low when compared to the group as a whole. The buying and selling of Proof sets is like most other markets, that is, they are always moving toward a price equilibrium. The problem is the term “price equilibrium” is a moving target. There is new information, buyers, and sellers constantly being introduced into the proof set market. As a result of these changes in the market place, some of the sets will appear to be too high relative to the group as a whole and some sets will appear to be too low. In this article, I analyze the group of proof sets from 1956 to 2007 and identify a few sets that may be over priced and a few sets that may be under priced based on mintage numbers.

The mintage figures used were from the 2010 Guide Book of United States Coins (“Red Book”) and the prices are Coin Dealer Newsletter bid prices from June 12, 2009. Only the regular clad and silver proof sets (including the Premier sets) were included in the data set. The proof quarter, Prestige, Presidential, and American Legacy sets were not included in the study. Figure 1 is a plot of the results of the analysis. The x axis is the mintage of the set in millions. The y axis is a logarithmic plot of the CDN price of the set. The price verse mintage was fitted with an exponential equation. The exponential fit gives a straight line on a logarithmic plot. Without getting bogged down in more mathematical jargon, the way to make useful sense of Figure 1 is to consider the sets that are above the line and assume they are more expensive relative to the sets that are below the line. Sets farthest from the line (upward) are more expensive based on their mintage than sets that are on or near the line. The same principle applies to sets that are the furthest below the line, except they are the least expensive sets based on their mintages.

The sets that are significantly above the line, which are considered over priced based purely on their mintage, include the 1999 silver, 2001 silver, 2001, 1976 three piece silver, and 1964 proof sets. I am going to throw out the 1964 set from this group of over priced sets. At a CDN bid of $11.75 this is approximately $3.00 over the silver melt value of the set and a significant portion of these sets have been broken up and the singles have been sold separately. The 1976 three piece silver set is a one year type set and there is justification for this higher price relative to the mintage of 3,998,621. The price of the 1999 silver, 2001 silver, and 2001 clad don’t seem to have a valid reason for this higher than expected set price.

There are seven sets that appear to be real bargains when compared to the group as a whole, these are: 1992 silver Premier, 1998 silver Premier, 1986, 1992, 1972, and 1982. These sets are further from the line on the down side. At only $11.00 wholesale and around $18.00 retail, the 1992 silver Premier set with a mintage of only 308,055 appears to be the bargain of the bunch. The 1998 silver Premier has similar statistics and also a good buy. The 1972, 1982, 1986, and 1992 sets have Red Book prices of $6.00, $6.00, $11.00, and $9.00, respectively. These four sets are just flat cheap, what else can I say?

Proof Set Price Graph

Figure 1 – Proof Set Price Plot

Considering the old adage “Buy low, sell high”, hopefully this article has helped identify what is currently low in price and what is high in price. As always, buy and sell with a reputable professional coin dealer to ensure you are getting what you pay for and you get a good price when it comes time to sell your proof sets.
Disclaimer: this article is intended solely for informational purposes. The opinions are those of the author only. Please conduct additional research before making any financial decisions. No responsibility can be accepted for losses that my result of trading on the basis of this analysis.

Last summer I published an article titled “Coin Values in an Economic Recession” see http://www.investmentmetalsandcoins.com/coinvalues.asp. At the time this last article was written we didn’t officially know a recession had already begun. It wasn’t until December 2008 that the National Bureau of Economic Research made the announcement that an economic recession has been going on since December 2007. The experts (if there is such a thing) tell us that it may well be into 2010 before we emerge from this economic quicksand. I thought it would be fun to see how the small basket of coins from the last article has faired through this long recession this far. Here is what I found:

To try to quantify the effects of a recession on coin values I compiled the prices of a group of coins in the Table 1 below. These prices are Coin Dealer Newsletter (CDN) bid values for the date in the first column. Due to a limited number of old CDN’s at my disposal I used the issues that most closely bracketed the recession period. These are the coins I would typically see in a coin collection. So hopefully this will give a decent representation of the average coin collection.

The first recession occurred between July 1990 and March 1991. The fourth row down labeled “% change” shows what the percent change was for each of the ten groups of coins. The 1956 proof set and the proof Liberty nickel took the biggest hit during the period January 1990 to January 1992, both down around 30% - not good. However, five of the coins showed an increase in price over this period and one, the 1891-CC AU Morgan dollar showed no change. In summary, four of the coins went down, one stayed the same, and five went up in value. Depending on how many of each coin type you owned, this recession could have been either positive or negative to the value of your collection.

The second recession ran from March 2001 to November 2001. It was a short one. During the period of January 2001 to January 2002 our small group of coins faired a little better this time. Five of the coins showed an increase and five showed no change in price. The 1956 proof set and the VG large cent both gained over 25 percent during this year. This is a very nice increase in price for these two items. This recession did not have a negative effect on this group of coins.

This current recession has been friendly to this small collection of typical coins. The average percent increase in price of this collection of coins has been 5.3% over the period from December 7, 2007 to June 12, 2009. For the sake of comparison, the Dow Jones Industrial Average (DJIA) closed at 13625.58 on December 7, 2007 and 8799.26 on June 12, 2009. This is a 35 percent decrease over the same period.

To sum it all up, I would have to say that the last two recessions have not been too bad on this small coin collection and this current recession doesn’t appear to be having a negative effect on coin prices either.

Important Information about your Coin Collection

Every coin must be judged on its own merit, and the assistance of an experienced dealer is invaluable. Generally speaking, however, we prefer to deal in coins that exhibit the following characteristics:

Disclaimer: we do not offer any form of financial advice, nor do we speculate on the future prices of precious metals or any particular coin. What we can offer is historical data on which coins have tended to appreciate in value, and the current trends in the industry.

eBay Auction Results for Certified Dollars

26 May 2009

www.investmentmetalsandcoins.com

In the last three decades the grading and encapsulation of collector coins has become big business. Many thousands (if not millions) of coins have been sent into such organizations as the Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation, and American Numismatics Association Certification Service (ANACS) to be graded by a professional grader and placed in a protective plastic holder. This practice has helped standardize the grading standards of uncirculated coins. The cost for this service currently runs around $20 to $40 per coin depending on the value of the coin and when you want the coin returned from the grading service. Is this extra $20 or more dollars spent to grade and encapsulate your coins really worth it? Does the grading service matter? In this article I want to answer these two questions based on actual auction results from eBay.

There are several good grading services that can provide this service to the collector and dealer. In this article I will focus on three of the largest and best know services: PCGS, NGC, and ANACS. All three have been around for years and have good reputations in the collector community. The four figures below show typical examples of dollars graded and encapsulated by these three services. The last figure is of a raw or un-certified dollar. This is the typical picture that would appear on an eBay auction for un-certified dollars.

Figure 1 – PCGS Graded and Encapsulated 1921 MS63 Morgan Dollar

Figure 2 – NGC Graded and Encapsulated 1885 MS64 Morgan Dollar

Figure 3 – ANACS Graded and Encapsulated 1884-0 MS64 Morgan Dollar

Figure 4 – Raw or Un-Certified 1884-O MS63 Morgan Dollar

To determine what value the certification of dollars has, I started collecting eBay auction results from four Morgan and Peace dollar auction types: raw dollars grading BU to Choice BU, ANACS dollars grading MS60 to MS64, NGC dollars grading MS60 to MS64, and PCGS dollars grading MS60 to MS64. The averages shown below in Table 1 are from at least 12 successful auctions on eBay in each category. In other words, the averages in Table 1 required results from over 48 successful auctions on eBay. Many of the auctions were conducted by our coin business: C&D Coins and Currency http://stores.shop.ebay.com/C-D-Coins-and-Currency. In Table 1 the first column lists the type of auction recorded. The second column is the average percent the final price of the auction plus shipping and handling divided by Coin Dealer Newsletter (CDN) bid price. The raw or un-certified coins brought an average of 95 percent of CDN, whereas, the average price for a PCGS graded Morgan or Peace Dollar brought 29 percent over current CDN bid prices. That is a significant difference.

Table 1 – eBay Auction Results

Type of Dollar	Average Percent CDN Bid
Raw or un-certified	95%
ANACS Certification MS60 – MS64	101%
NGC Certification MS60 – MS64	106%
PCGS Certification MS60 – MS64	129%

The auction results in Table 1 tells the story, that is, certification does matter when it comes to the price you will receive for your coins when they are bought or sold. Based on the small number of auctions reviewed the difference between the ANACS and NGC results are not significant. However, there is a significant difference between the raw dollars and the certified dollars. You can expect to get at least an additional 10 percent for your certified dollars as opposed selling them raw. Starting with silver dollars that bid for around $200, the cost of certification is worth the money spent. PCGS certification clearly brings more money in auctions than either the ANACS or NGC certification.

Based on my own experience in dealing with hundreds of certified coins, I have found the three services discussed above to be very similar in their grading standards. The price difference between PCGS and NGC or ANACS must be due the perception of the buyers, that is, buyers of PCGS graded coins feel they are worth more money in that holder.

Coin Market Update

(5/1/09)

by Brad Welles

www.coinsworthsaving.com

Overview:

Activity has slowed some in the early part of 2009, but most coin prices have held up well. In the first three months of 2009, approximately 35,000 US coins in the PCGS price guide moved up compared to about 8000 that lost value. A few coins priced over $15,000 have shown softness, as have coins with problems or poor eye appeal. Gold coins continue to show strength, except a few priced above $25,000. Less expensive “collector coins” have held their ground. This is reflected in the major coin indices:

CCDN Coin Market Index (broad wholesale measure): Up about 0.3% year to date

CoinAge Magazine MS65 Index (high end): Down about 4% through March

CoinAge Magazine VF Index (lower end): Up about 0.4% through March

PCGS 3000 Index (broad measure): Down 0.8% in the last 3 months

PCGS Generic Gold Coin Index (more common gold): Up 15% in the last 3 months

PCGS Mint State Rare Gold Coin Index (very high end): Down about 6% in the last 3 months

What’s Hot: Early US coins minted before 1834; key date Indian and Lincoln cents; any but the most expensive gold coins; key date Morgan dollars

What’s Not: Specialty areas such as early gold commemoratives and Morgan VAMs; common date silver coins; high grade modern coins; some very high end (over $25,000) coins; most currency

What are the Best Gold Coins to Buy?:

The answer to this depends largely on your objectives. Below are three general classes of gold coins and observations on each:

Bullion Coins (US Eagle, Canadian Maple Leaf, South African Krugerrands, etc.) – These modern coins are minted and sold for their gold content. There is little or no numismatic value. They track gold prices closely. Bullion coins tend to do very well in periods of financial uncertainty and inflation. Values have risen steadily for the last 6 years. However, precious metals prices are notoriously cyclical and bullion coins have proven a poor “investment” over longer periods of time. Bullion was confiscated by the US government in 1933.
Generic Gold Coins (common US gold coins minted pre-1933) – The value of these coins will be strongly influenced by precious metal prices, but also collector/investor demand. They act as a sort of hybrid between bullion and numismatic coins.
Numismatic Gold Coins (Rarer or higher grade US gold coins minted pre-1933) – These coins can be influenced by gold prices, but trade mainly on collector/investor demand. There is a limited supply and obviously they are no longer being minted. This market is completely different from that of bullion coins. Over longer periods of time (5+) years, numismatic coins have typically rewarded their owners, independent of what spot gold prices are doing. See for instance the article at http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5356

Bottom line: Generally, we would prefer to sell numismatic (or at least generic) coins to customers who plan to hold them for some years. However, if you judge that an economic crisis is at hand or simply want to own bullion, we can supply bullion coins at competitive prices. If your needs or your assessment of the financial climate change, bullion coins are easy to sell or trade for numismatic coins.

Feel free to contact us any time for more information on coin-related topics.

When I retire from collecting who should I sell my coins to.

A collector friend of mine asked me the other day “Who would he sell his collection to once he was ready to retire from collecting”. I gave him a less than profound answer to his question, however, that got me thinking. Like most collectors and dealers it is easy to get a large sum of money tied up in your collection or inventory. So just who will we finally sell our coins to when we stop collecting?

There are a couple of key factors that have a big influence on the answer. The first factor is general population growth. In the United States the population has doubled since 1950. That means the number of collectors has probably doubled too. That is a significant increase. In 1950 we had available from the mint a proof set, a mint set, and a few commemorative halves. Compare that to the number of numismatic products available from the US mint today. I didn’t count them all, but there are at least 20 different items you can purchase. Someone is buying all these items or the mint wouldn’t be producing them. This tells me there are a lot of collectors, beginners and advanced, picking up these coins.

Another important factor is the international market place. We sell quite a few coins each month over eBay and about ten percent of our sales are to addresses outside the US. I’m not trying to say that the international sales of C&D Coins are significant enough that it is upsetting the international flow of collectable coins. However, this tells me that most internet based dealers are also selling many coins overseas. Coins that are shipped to other countries probably aren’t coming back on the US coin market anytime soon. I see this international market coin market place spreading to more countries of the world with time. This will add many new collectors to the fold over the next decades. From what I have observed over the years, coin collecting is a fundamental human condition, not just a western society “thing”. More people with access to the coin market, via the internet, translates to more new collectors hungry for coins.

A factor that is working against the collector is that the supply of older coins is diminishing with time. This is due to damage and permanent loss, damage being the more common of the two. I personally know of more than one collection destroyed in home fires. This resulted in hundreds of coins being reduced to bullion value or blobs of metal. Another source of damage is cleaning. Many nice coins in the hands of the well meaning novice get harshly cleaned. This reduces their value and lowers the number of quality coins available. Once a coin has been cleaned, it is really hard to “unclean” a coin.

With the two factors of an increase in the number of collectors world wide and a decrease in the number of collectable older coins available, maybe the question isn’t “Who would he sell his collection to once he was ready to retire from collecting” but rather, “Can he find all the coins he wants for his collection before he retires”?

Which coin price guide should I use to value my coin collection?

There doesn’t seem to be a shortage of coin price guides available to the collector and dealer. About a dozen come to mind immediately. To try to make sense of some of the information available to value coins I did a comparison for seven coins that are commonly bought and sold by collectors. What I wanted to discover was how do the price guides compare to actual prices of coins being sold. With only seven coins this isn’t an all inclusive statistical comparison of actual prices and the price guides, however, from this limited sample of coins you can get an idea of how well the price guides reflect the current price of coins.

The seven coins chosen are common coins most collectors would have in their collection. I purposefully didn’t include extremely rare, bullion related, or top end uncirculated coins. The price for these coins has a lot of variability due to market fluctuations and probably wouldn’t be reflective of what I am trying to uncover here.

Table 1 lists the coins used in this study. The column labeled “eBay Store” are actual selling prices realized during 2007 from our eBay store http://stores.ebay.com/C-D-Coins-and-Currency. The prices listed in the “Num. News Ad” come directly from display ads in Numismatic News or Coin World magazines. The last column labeled “Average” is just the numeric average of the eBay and magazine prices. All the prices include shipping and insurance. The average price should be very reflective of the current retail coin market for these seven coins.

Table 1 - Retail Prices

Coin	eBay Store	Num. News Ad	Average
1828 AU Half Cent 13 stars	$100.00	169.50	$134.75
1812 VG+ Large Cent	$82.00	$104.00	$93.00
1868 G Indian Head Cent	$32.00	$43.00	$37.50
1921-D G Walking Lib. Half	$257.00	$349.00	$303.00
1925 BU63 Stone Mountain Commemorative Half	$66.00	$83.50	$74.75
1872 VG Seated Dollar	$194.00	$244.00	$219.00
1924-S AU Peace Dollar	$59.00	$68.50	$63.75
Sum of column	$790.00	$1061.50	$925.75

Three commonly available price guides were chosen for the study. The first is the old reliable “Red Book”. Actually it is called “A Guide Book of United States Coins”. It has been published since 1947 and virtually all collectors are familiar with this guide. The second guide comes monthly in Numismatic News as an insert. Over the years, I have found it to be reasonably accurate on the retail prices of US coins. The last, but not least, is the Coin Dealer Newsletter (commonly called the “Grey Sheet”). The “Ask” prices are the suggested dealer’s retail prices. I used the most recent editions of each of the price guides. The last column is the average of the three price guides.

Table 2 - Price Guide Prices

Coin	2008 Red Book	Num. News Price Guide	CDN Ask	Average
1828 AU Half Cent 13 stars	$160.00	$135.00	$120.00	$138.33
1812 VG+ Large Cent	$85.00	$83.00	$72.00	$80.00
1868 G Indian Head Cent	$45.00	$37.50	$30.00	$37.50
1921-D G Walking Lib. Half	$300.00	$285.00	$280.00	$288.33
1925 BU-63 Stone Mountain Commemorative Half	$100.00	$85.00	$67.00	$84.00
1872 VG Seated Dollar	$220.00	$190.00	$230.00	$213.33
1924-S AU Peace Dollar	$70.00	$66.50	$55.00	$63.83
Sum of column	$980.00	$882.00	$854.00	$905.33

So what does all this tell us? The price guide from Numismatic News gives the closest average price ($882.00) to the actual selling price of the coins ($925.75) and the other two are a little over (Red Book) and a little under (CDN Ask). Does this mean we just should ignore the other two guides? Not really. Each price guide has its place for the collector and dealer. The Red Book is a classic and works well for retail prices of collector coins. The price guide in Numismatic News is free with the subscription and comes monthly. The editors of Numismatic News do a good job in keeping the price guide current. The CDN is the most expensive of the three but it comes weekly with current wholesale prices. So wherever you are at in the world of coin collectors, there is a guide that will help you spend your hard earned money wisely.

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