Numismatics Explained: What Gives Coins Value?

Posted - October 5, 2023
what gives coins value

The term ‘numismatics’ has existed for hundreds of years. Historians believe that the word was initially coined in 1829. But even before the concept was given a name, people had been studying and evaluating coins for thousands of years. Even the Ancient Greeks needed numismatic experts to differentiate between genuine and counterfeit coins. Today, numismatists occupy an important part of the market for rare coins

So what gives coins value? A combination of precious metal content, numismatic value, and a number of other factors determine how much a gold, silver, or platinum coin might be worth to collectors. In this guide, we’re going to explain numismatics from start to finish. If you’ve ever wondered what a numismatist does for work, how they get their jobs, or the tools they use to evaluate gold bullion coins, you’ve come to the right place. 

How Coins Get Their Value

It might seem simple at first to determine the value of a gold coin. A piece’s base value is determined by its precious metal content, after all. But if you’ve researched some of the world’s rarest coins, you might find that some non-bullion coins are worth much more than their .9999 fine gold counterparts. Why is this? 

Clearly, coins are evaluated based on a lot more than just their percentage of fine gold bullion. This is where numismatics comes in. A coin’s rarity, composition, and historical context are just a few components that numismatists use to determine how much a given coin should be worth. In other words, what gives coins value is a number of related elements. 

2023 Morgan & Peace Silver Dollar Set NGC MS70 FDOI
2023 Morgan and Peace Silver Dollar Set MS70

Factors that Affect Coin Values

To understand what gives coins value, you’ll need to understand a few factors that help contribute to rare coin valuations. We generally find 4 main components that can shed light on what gives coins value: rarity and mintage, condition and grading, precious metal content, and market factors and investor demand. 

Rarity and Mintage

It shouldn’t be surprising that rarity and mintage numbers influence how much a coin is worth to traders. Some coins from the United States Mint were minted millions of times, meaning a high available supply of specimens. But certain coins, such as the 1933 Saint-Gaudens Double Eagle, offer only a few actual surviving examples. 

Numismatists, or rare coin experts, know enough about a coin’s history to tell you more about its rarity and mintage numbers. What gives coins value? A piece’s mintage figures are certainly a core part of the equation. Lower mintage numbers means that your coin is rare – and therefore more valuable to collectors. 

Condition and Grading 

After an examiner knows how rare a surviving coin specimen is, condition and grading come into play. A coin’s ‘grade’ refers to its overall condition compared to how it should have looked when first released from the mint. Coins are often graded on the Sheldon scale, a universal system used to standardize coin condition evaluation. We’ll talk more about that later. 

For now, collectors should know that part of what gives coins value is their condition. A coin in near-perfect condition will almost always sell for a higher price than coins with a lower grade. Surprisingly, some especially rare coins might be worth tens of thousands of dollars – even if they’re in the poorest possible condition. The 1933 Double Eagle would be worth millions of dollars in terrible condition because of its scarcity. 

$20 Saint Gaudens Double Eagle Gold Coin Cull
Saint-Gaudens Double Eagle Gold Coin

Precious Metal Content 

We can’t ignore precious metal content when trying to figure out what gives coins value. It should be pretty obvious to most readers that coins containing actual gold, silver, or platinum will generally be worth more than coins minted using cheaper materials. Strangely enough, this is not always the case. Precious metal helps determine what we call the base value of a coin. Coins that contain pure bullion possess intrinsic value. 

We encourage coin investors to look beyond precious metal content to better understand what gives coins value. Even coins containing no actual precious metals might be worth millions if they’re sufficiently rare and maintained in excellent condition. 

Market Factors and Investor Demand 

The last component of what gives coins value is a bit trickier to track. We refer to it as market factors. Like all markets, the bullion coin industry changes over time. Investor interests in certain coins rise and fall, and this closely influences the value of rare and bullion coins alike. New investors might struggle to time the market properly. But a good numismatist understands more than just the quality and historical details of a bullion coin. Excellent rare coin buyers also know what coins are valuable to collectors in the current market.  

This makes coin values a relatively volatile market. It’s tough – or impossible – to predict how numismatic coin values will change over time with any degree of certainty. Still, market factors and investor sentiment is a major component of what gives coins value. 

What is Numismatics? 

Numismatics is the study of coinage. In particular, numismatic experts focus on the history, details, and science behind rare collectable coins. The people who specialize in numismatics are called numismatists. These certified industry experts have spent their lives trying to understand and explain what gives coins value. In the next section, we’ll take a closer look at the numismatist, as well as how they evaluate coins. 

What is a Numismatist? 

A numismatist is someone who specializes in rare coins. Numismatists sometimes have their own specific areas of expertise. For example, there are a few numismatists who are especially well-known for their niche knowledge about Ancient Roman coins. But other specialists focus on more modern coins, including contemporary bullion coins like the American Gold Eagle

Many coin collectors might already be familiar with the basic elements of numismatics. Numismatists from Professional Coin Grading Services are industry-leading experts who grade the condition of rare gold, silver, and platinum coins. But what does it take to become a numismatist, and how do these experts fit into the larger bullion trader community? 

Qualifications for a Numismatist

What are the qualifications necessary to become a numismatist? Generally, numismatic experts take a series of courses with a certifying organization. The most popular certification program comes from the American Numismatic Association. They offer a variety of correspondence courses followed by a 200-question test to help certify potential candidates. 

Most respected numismatics work in the industry for decades. From day to day, the job of a numismatist is to evaluate a coin and attest to its rarity, condition/grade, and estimated value. 

Numismatics and Coin Valuation

Numismatists play an important role in the coin valuation process. While numismatic experts are often called upon to determine the rarity and estimated value of a coin, their main role has more to do with authenticity and grade verification. When you ship your coin off for professional grading, certified numismatists will use their skills to verify that your coin is authentic and assign it a grade. 

How do Numismatists Evaluate Coins? 

Numismatists use several tools to determine what gives coins value. We’ll take a closer look at how numismatists evaluate coins below. 3 main components factor into how a numismatist grades their coins: physical properties, minting characteristics, and historical context and age. 

Physical Properties

The physical properties of a coin should be pretty familiar to you. But while most investors know the general details of a coin’s appearance, numismatics take their knowledge to a different level entirely. In reality, the physical properties of bullion coins is a major part of what gives coins value. Minute details, such as doubled die errors or strange markings on the reverse, can cause a coin to skyrocket in value. 

Gold Eagle
Type 2 American Gold Eagle

Numismatists trying to discover what gives coins value often use a variety of tools. In particular, most coin experts have access to a fine magnifying glass. This allows them to spot miniscule details that differentiate one coin from another. 

Numismatists also need to be able to determine whether a bullion coin contains actual precious metal or not. Some counterfeit coins might look identical to the real thing. But by using tools like scales, magnifying glasses, and even ice, they can figure out what coins are real gold – and which are cheap imitations of the authentic original. 

Minting Characteristics

In addition to details on the appearance of a coin, part of what gives coins value has to do with the special minting characteristics used to produce them. Believe it or not, some numismatists can tell the source of a coin with no mint mark just by leveraging their knowledge of how the world’s mints operate. Talk about specialized knowledge! 

Mint marks help to determine the source mint for most rare coins. What gives coins value? A mint mark can help us to figure out how many of a given coin were minted. Remember: the lower the mintage, the more valuable your coin is likely to become over time. 

Historical Context and Age

Numismatists don’t specialize in just coins. In order to be good at what they do, a professional numismatic expert needs to have a solid grasp of world history. Historical context is part of what gives coins value. Coins from especially important eras of history could be worth quite a bit of money to certain collectors. Consider, for instance, the steel cent. These coins were struck with steel instead of regular metals because of the ongoing World War 2. Because of this distinct design, they now sell for a hefty premium to collectors. 

How to Evaluate Coins at Home 

You don’t need a numismatist to grade your coins. While the advice of a professional is never a bad thing, it’s also possible to grade coins right from the comfort of your own home. If you’re wondering how to grade coins at home, we’ve included just a bit of advice below. 

Grading Coins from Home 

To grade coins at home and figure out what gives coins value, you’ll need to use at least some of the tools leveraged by professional numismatists. Namely, you’re going to need some cotton gloves and an advanced magnifying glass. The magnifying glass should be used to look at the small details that make up your coin. 

Zoom in on your coin as much as possible so that you can make out the tiniest details. Once you’ve secured your coin and prepared to give it a close look, it’s time to take advantage of online resources. Coin value guides are a great place to start. Identify the key parts of the coin, including obverse/reverse designs and the mint mark. These key identifiers can help you determine when the coin was minted, which mint produced it, and what era in the coin’s minting run your coin falls into. 

Be careful about handling your coin. Especially for valuable and rare old coins, improper handling with your bare hands can quickly cause their value to deteriorate. Remember that a major part of what gives coins value is their condition. We recommend buying cotton gloves, which are proven to be non-abrasive on the surface of sensitive bullion coins. 

How Coin Grading Works 

Coins are graded according to the Sheldon scale. This universal system for evaluating gold, silver, and platinum coins assigns each piece a ‘grade’ from one to seventy. Coins graded in the 70 range are nearly perfect – even under 8x magnification. They contain no visible damage and only very minimal evidence of circulation. We often refer to these coins as “near-mint.” 

At the other end of the spectrum, you have “basal state” coins. These bullion pieces are so damaged that it’s almost impossible to identify their key characteristics. Because part of what gives coins value is their grade/condition, it’s important to closely evaluate your coins to see where they fall on the Sheldon scale. 

Final Thoughts: What Gives Coins Value? 

So what gives coins value? Coins are evaluated by numismatic professionals called numismatists. These experts specialized in assessing the main elements of valuable or rare collectable coins. Namely, a coin’s rarity, condition, and precious metal content are the core features that give them value. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.