How Rare Gold Coins are Valued?

After a four week decline period, spot gold prices have been rising ever since the European Central bank has announced plans to ease the euro debt. On October 10, 2011, gold prices saw a 2% increase from the last close and reached $1,659.09 per oz. 2011 alone has seen many a fluctuations in the price as in September, gold prices hit an all time high of $1920.

Gold is touted as a popular way of investment portfolio diversification. There are a variety of ways in which one can invest in gold like buying bullion gold, investing in gold mutual funds, gold ETFs, Gold futures or acquiring rare gold coins. Numismatic coin collectors however, are more interested in the historical significance and the factors that contribute to coins being valued at much more than their gold content.

Rare Gold Coins: Value Determinants

Rare gold coins are important pieces of history that can be treasured. There are many determinants that are taken into consideration while a rare coin is being valued.

Grading: Third party graders like the PCGS (Professional Coin Grading service) and the NGC grade coins and certify numismatic coins on the basis of their appearance and quality. Such certification is considered to be a marker of authenticity and add a new level of safety and protection for both novice and experienced owners. Highly graded coins are bound to fetch better value.

Rarity: Seldom people have been known to come across uncirculated and rare gold coins that are valued highly simply because they signify a certain period in history that is up for ownership. Common numismatic coins will fetch less value as compared to an uncirculated coin or gold coins that are less in number, based on the fact that it provides for owning something unique.

Historical Significance: Gold coins that have survived meltdowns, wars and are rare finds that commemorate events or eras can be valued higher. Collecting such coins is like owning a unique story. Often collectors are looking to complete series of such coins simply to own a set that signifies an important historical timeline.

Circulation: Gold is an extremely malleable metal which adds value to it. However, from the time that a gold coin leaves the mint, it starts to get damaged simply by virtue of being handled. Damage can be as small as hairlines on the surface or as severe as blurred designs. But as it passes more hands, there is sure to be some amount of damage. Hence, coins that have not been circulated are rare finds and in pristine condition, therefore valued more.

Value Additions: The early commemorative coins were accompanied by old letters, sales literature and other related souvenirs. Rare gold coins that are accompanied by old notes, original design sketches, letters and envelopes are valued higher because these are markers of its authenticity. Thus, auction catalogs also become an integral part of a rare coin’s history over the years. One such well-known rare coin is the Dexter variant of the 1804 dollar. The affidavits and letters from the US Mint officials have accompanied the coins whenever they have traded hands.

Counterfeiting is a vice one encounters in the gold market. You need to be careful when dealing with rare numismatics lest you end up owning fake coins or design copies. This is why it is so important to use a reputable dealer like ITM Trading.