Factors That Influence Collectible Coin Values

Whether you collect coins as an investment or just because you love their aesthetics and their link to history, you’re probably going to give some thought to the worth of certain coins. But what gives value to a coin or makes it a worthwhile collectible?

The market value for old American coins can be affected by many factors. Some are market driven while others relate to the coin itself. Coin related factors include such things as the number of coins minted, its age and its overall condition. Non-coin related issues may be the mass psychology of collectors or current economic conditions.

When considering a purchase, trade or sale, the following are some key factors to consider when making a judgment on how much a coin is worth:

Coin Grade -

Grading is a means of categorizing the condition of a coin and is probably the most important factor in determining its value. There are professional grading services such as PGCS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation), but collectors can combine there own visual inspections along with catalog information to determine a coin’s grade.

Many coins that have been professionally graded are sealed in protective cases to maintain their graded state. This can provide a degree of trust when purchasing such a coin particularly when looking for coins as an investment. On the other hand, some collectors prefer to touch and hold the coins themselves, perhaps relying on their own knowledge of coin grading or because collecting is more a hobby than and investment.

History -

When considering a coins history, older coins are not necessarily more valuable. Although a coins age plays a very important role in determining its value, there are many other influencing factors such as wear, ownership history and the mint location where the coin was produced.

Rarity –

With the exception of coin errors, rarity is a relative quality that is not inherent to the coin itself. In general, a coin is likely to be worth more if it is a type that was produced in relatively small numbers. So it is more the type of coin that is valuable and not a property of an individual coin. For example, the Philadelphia mint produced more coins than any other mint for many years, whereas coins produced at other mints like Denver and San Francisco are fewer in number and will tend to be more valuable.

Errors –

There is one type of inherent factor that can affect the rarity of a coin and that is if an error exists. When a coin is struck, it is possible for various types of errors to occur which can make the coin vary rare as a result. Such errors can include marks from foreign material, file marks, weakly struck designs, off-center strikes or double-strikes. Since errors do not occur very often, they can actually increase a coins value.

Errors should not be confused with other coin defects. Coins can have various nicks or marks that are caused by general wear or bag damage (marks caused by coins rubbing together in transportation bags). Any damage caused after a coin is produced is not considered an error and will lessen a coin’s value.

Market Psychology -

Another important factor in determining economic value is market psychology. What is hot today may not be so hot tomorrow. Certainly the material that a coin is composed of plays a role in its worth, but similar to paintings, a coins value is affected by what other collectors are willing to pay for it. Market psychology is not under a collector’s control, but being able to recognize purchasing trends can help to determine a coins value.

Even though external market and economic influences do play a role in coin values, the inherent qualities of a coin and its history should be the first researched properties when determining its value.