So you want to be a coin collectors? Part #5 - why would you spend more than face value on a coin?

So far in this series of blogs on "coin collecting", I've covered a wide variety of topics to get even the beginner up to speed. Each blog should read as a "stand alone" topic, but when read together, as this series is intended, complete novices should be avid numismatists in no time, and know their Proofs from their Peidfort and their Bullion from their Brilliant Uncirculated.

PART 1- So you want to start coin collecting?
PART 2- Strike quality
PART 3- Commonly used terms
PART 4- Getting your friends and family started

I often get asked why some coins cost more than their denomination (face value) and my response is always the same - "there are a number of reasons why this occurs, so please allow me to explain". There are two types of coins: those which go into circulation and those which don’t. The latter, Uncirculated, includes commemorative coins and bullion coins.

Many of these Uncirculated coins are available in a range of editions, including Gold Proof, Silver Proof Brilliant Uncirculated and Bullion editions. If you've read PART 3, then you'll know what in talking about. These are minted to the size and shape of an official circulated coin, but their greater value is found in their composition – a precious metal, a superior finish or sometimes both.

For example, a Silver Proof commemorative coin set is worth a lot more than the individual coins you will find in your every day pocket change. Like Proof coins, a coin that is ‘uncirculated’ will not have the wear or scratches that a circulated coin usually has. Uncirculated coins are made using the same method as circulating coins, but are struck multiple times with greater force. They also have enhancements such as early strikes, special cleaning and special packaging which make them an attractive purchase, and so carry a higher premium when purchasing.

So why would you spend More on a Coin?

The Quality of the Metal Depending on the metal a coin is struck in, its cost may be more than the denomination in which it appears. A gold Proof 50p coin is minted to the shape and diameter of a circulating 50p but its metal is far more valuable than the circulating, cupro-nickel 50p coins you will find in your change. So the minimum value of the gold coin would be the melt value of the precious metal it contains.
Craftsmanship Circulating coins are struck once, giving a complete finish. Any scratches and imperfections are not removed and remain as part of the unique appearance of the coin. Bullion coins have a similar standard of finish, but are made from precious metals and all minor blemishes are removed. They are bought for their intrinsic cash value and kept as a financial asset. Commemorative Brilliant Uncirculated coins are struck twice. This extra strike gives much more definition and makes the details of the design really stand out. Proof coins are struck several times and due to the extra time it takes to produce them, there are usually fewer Proof coins minted which often makes them more sought-after by collectors.
Mintage Gold and silver Proof commemorative coins are minted in limited numbers. This makes them valuable and more collectable as there are less of them produced, and many collectors are keen to add them to their collections.
Authenticity Most commemorative coins come with an assurance of authenticity. Brilliant Uncirculated coins have the full specifications printed on the packaging and Proof coins come with a Certificate of Authenticity, including the Maximum Coin Mintage and Limited Edition Presentation figures. With their high-quality presentation and limited numbers, Proof sets are often sought-after by collectors and generally speaking, Proof coins have a higher mark-up than Brilliant Uncirculated coins.

There is no right or wrong way to collect. In fact its the wide variety of choices that make coin collecting so much fun, it all depends on your motivations and preferences. If you are willing to pay the extra cost for coins that are more attractive and scarce, or you are looking for a coin gift for someone, then commemorative coins and sets could be the best option for you, as they offer a better standard of minting and a limited number run.

The #steemsilvergold community are a group of people that enjoy talking about and sharing knowledge about coins and precious metals. If you have any questions, please reach out and ask. Someone will always be happy to help in anyway they can.

Simply leave a comment below and either myself or someone else will get back to you if we can help.

Posted via Steemleo