What Are Certified Graded Coins

What Are Certified Graded Coins

Perhaps one of the most daunting aspects of purchasing gold coins is the difficulty many face in discerning their true value. Coin grading became prominent during the early 1900s, attempting to standardize the assessment of a coins condition, rarity and, ultimately, its value. However, because there really wasn’t a rule set in place, any efforts at grading were largely subjective. Each coin dealer had his favorites, peeves and sometimes different ideas in regard to what made a coin “good.” The result was a very rough scale:

  • Good
    Still has most of its detail
  • Fine
    Retained some luster and sharp detail
  • Uncirculated
    Mint state condition


These broad categories quickly proved to be inadequate. Efforts to narrow the categories further saw some success, but continued to remain largely subjective.


Dr. William Herbert Sheldon, an American psychologist, pursued numismatic studies during the early 20th century. Recognizing the subjective nature of coin grading, in 1949 he proposed a standardization involving a scale of 1 to 70, where 70 represented perfection on one end and 1 represented 1/70th of the value of a perfect coin.

Coin dealers generally accepted the Sheldon Scale, but assessment was still quite subjective. One dealer might sell a coin that he graded MS-64, while another might grade it MS-65, and yet another grade the same coin MS-63. In some cases these variances could represent tremendous differences in value.

Understandably, this led to investors growing suspicious of the coin industry, with accusations of inflated values for profit, both real and imagined. It wouldn’t be until a consistent standard system of grading came along that these subjective variations, and the associated suspicion, could be overcome.


In 1985, recognizing a need for such a grading system, a group of numismatic experts began discussing possible solutions. Through diligent effort this group was able to develop a consistent means of evaluation based on the Sheldon Scale. Their solution came in the form of a private party grading service, the Professional Coin Grading Service (PCGS).

In order to provide greater confidence, a mechanism was put in place to protect the coins from tampering. A capsule, called a slab, was developed that encased the coin, protecting it from contact that might damage it, affecting its value. Within the capsule was a card that provided information about the coin, its grade, a serial number and any other pertinent information.

This solution would revolutionize the coin industry. Whereas in previous years only an expert eye could evaluate a coin’s value, now the most novice of investors could buy any coin with confidence. Even unseen coins could be purchased with the knowledge that it had been evaluated under precise guidelines and graded accordingly.

Since Investors could assess a coin’s value at a glance, the added luxury of confidently purchasing coins from a dealer thousands of miles away was provided. Today there are other respectable grading services available as well, with Numismatic Guaranty Corporation (NGC) being PCGS’ chief competitor.

By purchasing these certified (slabbed) coins, investors are assured of universal acceptance, added protection against volatility, and the knowledge that grading a coin adds to its overall value and demand. Furthermore, investors can be confident they are receiving quality coins without the necessity of personal examination, affording excellent opportunities for various investment vehicles.

Meaning of the Grades

PrefixNumerical GradeAdjectival Description
MS 60-70 Mint State (Uncirculated)
AU 50, 53, 55, 58 About Uncirculated
XF 40, 45 Extremely Fine
VF 20, 25, 30, 35 Very Fine
F 12, 15 Fine
VG 8, 10 Very Good
G 4, 6 Good
AG 3 About Good
FA 2 Fair
PR 1 Poor

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