Being involved in coin collecting involves knowing the difference between bullion and numismatic coins. The value of the coin and what determines that value makes a big difference. Let’s see how…
Many of you who have been watching the market or the news are seeing how gold and silver are going up in value as of November 12, 2011. Some of you are taking advantage of purchasing these precious medal while other’s are interested in collecting but want to do some research first.
If you are interested in collecting Gold and Silver coins, there are actually two classifications of coins. They are Bullion and Numismatic. The value of these coins are determined by how much metal is contained in them, age, rarity, and so one. But the one thing I like to get across to you is that there are distinct differences between the two.
WHAT’S THE DIFFERENCE BETWEEN BULLION AND NUMISMATIC COINS?
Bullion Coins are chiefly purchased for investing purposes. The value in the market for this coin really determines the value. They are measured by a Troy Ounce which is a little heavier than a regular ounce aka Avoirdupois Ounce. You can also convert Gold and Silver into coins and pay a premium on top of the spot price.
If you’re in the United States, you may have seen on the news or if you follow the market, the price of silver and gold are going up. The reason for this is chiefly because the value of the American dollar is going down, although some 40 years go, the American paper money was backed by hard assets like gold and silver.
The only bad side about investing in Bullion is that the market tends to fluctuate and plus whenever the value goes up, you will have to pay a capital gains tax. Also, purchasing or selling these coins can be really risky if you’re not educated on the coins itself. There have been problems with counterfeit coins and being sold for less than it’s worth so you really want to be careful.
Numismatics is really the study and the collecting of coins. Not only do numismatic coins derive their value from metal content, but also their rarity and the grade. They are usually a lot more in value because of their condition.
There are different grades based on the system called the Sheldon Scale. These silver and gold coins would be “Minted” or melted down from raw silver or gold. The condition of these coins are determined by grading agencies such as:
ANACS (American Numismatic Association Certification Service)
NGC (Numismatic Guarantee Corporation)
PCGS (Professional Coin Grading Service)
ICG (Independent Coin Graders)
With the Sheldon scale they graded from 1 to 70, with 70 being in perfect condtion. For example, a silver coin graded as MS70 would be one in perfection condtion.
8 factors that determine the grade on a numismatic coin are:
Contact marks – appearance of coin. Any scratches or indentation can lower the value
Luster – The shine of the coin
Strike – How well or detail the coin is made
Color – the darker the tone the lower the value
Toning – film of sulfide found on surface of coins
Friction – The more friction on coin, the lower the value
Coin or Die Flaws – flaws created during production
Obverse/Reverse Grade Consolidation – Obverse, or frontside of coin, is the forefront when it comes to the value of coin
A great thing about these coins is that they hold their value quite well as oppose to regular bullion coins. Look at it this way, lets just say you have a 1957 chevy but didn’t maintain it well. You can probably purchase it for less than $1000. Now take the same car and lets say that you maintained it well, and possibly done some upgrades. This classic car would probably be sold for 6 figures. In this case, this can be compared to numismatic value.
HOW CAN YOU START COLLECTING THESE COINS
There are a couple of ways for you to start collecting coins if you’re interested. I myself go through Numis Network which is a company that I’m a rep for. You can have a coined delivered to your house without paying shipping and handling for $99/month if you join the SILVER COIN OF THE MONTH or you can by them individually at your convience by going to ShopNumis.com.
I hope this has been helpful to you. If you know of anyone that may be interested in collecting gold and silver, please share this information so that they will understand the differences in bullion and numismatic coins.
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