Whether you are a coin collector or buy coins for their precious metal content, you are likely to run across graded silver coins. Graded silver coins carry numismatic value for their condition or rarity, and therefore usually sell for a substantial amount over the price of the silver they contain.
Not all coins that appear to be in very good physical condition have been graded. Grading is an official process undertaken by a handful of different companies. The most well-known of these are PCGS and NGC. ANACS and ICG are two other well-respected coin grading services.
There are also dozens of additional companies that grade coins, though it is recommended that you only purchase coins that have been graded by one of the top four grading companies, as many collectors question the grades given by other companies.
Nearly any silver coin can be graded by one of these companies, whether it is a silver bullion coin produced for collectors or a silver coin intended for circulation. Some collectors prefer graded American Silver Eagle coins and other 99.9% pure silver coins. Professionally graded silver bullion coins that have a high grade, such as MS69 or MS70, command a higher price than their ungraded counterparts, even if the two coins appear to be in the same condition.
Others collect graded examples of early U.S. coins containing silver, such as Morgan silver dollars. If they are significantly worn, such as the “junk silver” coins sought after by precious metal investors, it is not typically worth having them graded. This is because the value of the coin lies in its precious metal content, not in the condition of the coin.
On the other hand, if the coin is in exceptionally good physical condition, with little to no wear from circulation, grading may increase its value. This is because, to a coin collector, the value of a high-grade silver coin is more than the value of the precious metal it contains.
The Grading Process
Professional grading is a determination of the physical condition of a coin. If the coin shows extensive wear due to handling, it will receive a low grade. Those that appear just as they did when they were minted will be given a high grade. Most grading companies assign a number on a 1-70 point scale, with 70 representing near mint coins, and the lower numbers representing increasingly worn coins. Generally speaking, the higher the grade of a coin, the higher its price.
In addition to guaranteeing the condition of the coin, grading also guarantees its authenticity. For precious metal collectors, this means a guarantee that the coin contains the precious metal it is supposed to, rather than being a counterfeit coin with no intrinsic value.
For investors who are already interested in precious metals, high-grade silver coins offer an opportunity to diversify their collection. High-grade silver coins make better displays because of their physical condition – they do not show the significant wear caused by circulation and handling over the years. They are also more sought after by collectors, increasing the potential value of your silver coin collection.