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All Posts Tagged With: "grading services"

The Coin Market Phenomenon of 2009 is the Widening Gap between the Prices of High End and Low End Certified Coins

By Greg Reynolds

price_gapThe key to understanding current U.S. coin markets, and bourse activity at the ANA Convention, stems from the widening gap in prices between mid range to high end coins and low end or problematic coins. This growing gap reflects underlying currents in the marketplace, the recent trend of collectors becoming better educated and more sophisticated, and reasons to be optimistic about the future of U.S. coin collecting. Markets are logically adjusting to imperfections in grading practices, and collectors, on average, are showing a greater understanding of and greater appreciation for the aesthetic and technical characteristics of coins.

Partly because of this gap, price guides have less meaning than they did in previous eras, and it is now harder for buyers and sellers to hone in on the current price levels. U.S. coin dealers must use their experience, current observations, and intelligence to set prices, as world coin dealers have been doing for decades. Coin prices are becoming a little more mysterious and trading has become more interesting.

Two coins graded X by the same grading service may be very different, whether X is Good-04, VF-30, AU-55, Proof-64 or MS-66, or any other number on the accepted grading scale.

  • 1) An accurately graded coin’s grade may fall into the high end, mid range or low end of the X range.
  • 2) One coin might be much more attractive than the other.
  • 3) There is more than one route to the same destination, as there are different sets of reasons for a coin to grade X. This is especially true of coins that grade from 55 to 62.
  • 4) Some coins will score higher in terms of originality while others will have artificially induced characteristics.
  • 5) No grading service will ever be perfect, and the grades of many certified coins are legitimately subject to question by talented dealers and very advanced collectors. Grading services, including CAC, like all other entities, make mistakes.

Herein, I am also employing the notion, though, that the tastes and preferences of sophisticated buyers is more in line with traditions of coin collecting in the U.S., rather than the criteria of the PCGS, the NGC, or the CAC.

Matt Kleinsteuber, a grading expert with NFC coins, remarks that “quality for the grade means everything.” Of course, he knows that collectors have other considerations as well. Kleinsteuber emphasizes the differences in desirability and price among coins of the same type, date (or equivalent date) and certified grade.
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