To be a master in a certain field, one must first learn to be well versed of the language in that particular topic; be it politics, economics, science or coin collecting. As coin collectors, we must learn the language of a Numismatist.
Coin Study will be a series of knowledgeable database written to allow coin collectors to learn different topics regarding their coin. Today the topic is "Learning the Coin Collector's (Numismatist's) Language". In today's topic, you will learn the basic terms used by coin collectors when they buy their coins and the condition of the coins they are buying.
Spot price is the current trading price of the item in discussion. Spot price of precious metals is mostly affected by demand and supply. Three main precious metal demands include: Investment Demands, Industrial Demands and Jewelry Demands. Supply comes fresh from the mines or scrap metal being re-melted down.
Premium (aka spread) is the difference between the buy price and the spot price. In physical metal exchange, premium is mostly a result of minting, distribution and administration costs. For e.g. If spot is at $35 and you bought a coin at $40 (exclude shipping), the premium for that coin is $40 - $35 = $5.
Bullion is precious metal considered in mass (grams) rather than collector's value for investment purposes. When a coin collector speaks of bullion, it usually means investment grade 99.9% gold or silver that contains little to no collector's value at the time of release. To be considered as true bullion, the coin must not have alloy and should contain 99.9% of the investment metal (gold or silver).
Face Value is basically the monetary denomination stamped on the coin.
Coins. Although common society have linked coins to almost anything that is round and flat, the real difference between a coin and a normal round is not shape but its legal tender status. The ability to use a coin as money or not determines whether you should call it a coin, or a round.
In other words, With a coin, you can buy a bowl of rice at face value because it has legal tender status issued by the government.
With a round, you cannot buy a bowl of rice because it is not a legal tender, but you can keep it for the metal's value.
However, nobody buys anything with the face value of precious metal coins. The face value of an American Silver Eagle (ASE) 1oz 99.9% Silver is $1 US dollar, but the metal content of a 1oz ASE is around $34 US dollars; Using it according to the face value means an instant $33 loss on the investment.
Rounds is just another round and flat item. The reason there are so many investment rounds out there is because the premium on the rounds are always considerably lower compared to the premium on bullion coins.
Brilliant Uncirculated (BU) is a term used to describe a coin (usually bullion) that is not circulated amongst the general public and is in mint condition. BU is also known as Mint State (MS) by grading standards. There are about 10 grading levels that determines how well strike a BU coin is. We will cover that afrerwards
Notice the Proof (left) has mirror finish on the background and matte relief; while the Brilliant Uncirculated (right) one has a matte background and polished relief.
Proof coins are higher standard coins that are minted to perfection. The common proof coins should have a highly polished background followed by a matte relief. The origin of proof coins started as "trial coins" to be given to the mint-master for approval before mass producing circulation coins to the public. As coin collection becomes more popular centuries ago, proof coins are produced as numismatic coins to be sold to coin collectors.
Specimen graded coins are neither BU nor Proof. They are sometimes also termed as Special Mint State by some grading organizations. Based on my research, specimen coins are a grade higher than BU coins and a grade lower than Proof coins. Some mint produce them as the modern day "trial coins" but others produce them out of different manufacturing methods that has a burnished and satin effect on the coin. There are no standards as to how a specimen coins are produced.
Kangaroo at Sunset has three different designs. Proof (left), Brilliant Uncirculated (center), Specimen (right).
Milk spots are white marks visible to the naked eye on polished (silver) coins. Milk spots are usually caused by the minting process called "annealing", improper handling of coins and metal reaction with excessive humidity. It is very hard to remove milk spots on the coins though there are various methods available online. Milk spots do not affect the metal value of the coin; however it will reduce the premium over spot.
You will only find milk spots on investment grade bullion/rounds and milk spots do not appear on proof finish coins.
"Don’t be so busy focusing on making money and solving problems that you fail to develop your key resource—your people." [Robert Kiyosaki]
Privy/Mint Marks (Common)
Privy marks are little symbols or alphabets that are engraved onto the coin. These marks are originally used to determine the location the coin is produced. Nowadays, the privy marks are still used to determine the location of manufacture; but it is more often used to determine the rarity of a coin by collectors and to commemorate a special event by the mint.
For example:
Perth Mint engraves the "P" mint mark in their coin to show that the coins are produced in Perth.
A "dove' design privy on the Australian gold nugget coins to celebrate 50 years of peace since World War II.
Figure: 2 oz 1994 Kookaburra with gold plated 1937 crown privy (Left). The coloured 2006 Red Back Spider 1 oz (Right).
Coloured (Common).
Coloured coins are coins with their features coloured using Acrylic or Enamel paint. According to Wikipedia, coloured coins were the first coins to be introduced as non-circulating commemorative legal tender coins.
Gilded (Common)
Gilded coins are coins that have their features plated in 24 karat gold for collector's purposes. This is done through a process called "electroplating", where a metal solution is moved by an electric field to coat a cathode (metal). Although gilding and gold plating has the same theoretical meaning, practically it is used in a different way. A gilded coin only has part of its surface plated in gold for decorative purposes. Whereas a gold plated coin is wholly gold plated base metal; deceptive to those who are uninformed.
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*Never ever buy gold plated coins according to gold spot price. Refer to the next term.
Mills
The term "mills gold" actually meant millionth of an inch plated gold on a base metal. If an item is advertised as "999 mills gold bar", it is a gold plated base metal with a coating with thickness of only 0.0023976 cm.
"Relief" is a word borrowed from the Latin word "rilievo", meaning "raised". High Relief coins means the feature of the coin is raised more than normal bullion coins, hence producing a more protruded effect on the feature of the coin. High Reliefs can be achieved during manufacture by striking the dies longer than compared to normal coins.
Figure: Note the higher relief on the 2009 Ultra High Relief Double Eagle (Left) and the lower relief on the normal American Gold Eagle (Right).
Bimetallic (Common)
Bimetallic coins are generally coins that use a different metal for its outer ring surrounding a core. Bimetallic coins are more commonly used for circulation coins.
*Some Bimetallic coin collectors term plated coins as bimetallic coins as well.
Opal Inserts (New)
Opal coins made their first appearance in the Australian Opal series. It was an innovative approach to producing collector's coins. Australian opal is precisely engraved and inserted into the middle of the coin. The opal is then covered in a black dyed glass to allow the display of Australian flora when light shines through the glass.
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Curved Coin
Curved coins has resurfaced again in the Royal Australian Mint's Southern Sky - The Crux silver proof coin. Unlike normal coins that have a flat surface, curve coins is basically a coin that have an domed surface.
Curved coins has resurfaced again in the Royal Australian Mint's Southern Sky - The Crux silver proof coin. Unlike normal coins that have a flat surface, curve coins is basically a coin that have an domed surface.
Patinated Coin
Patina is a type of tarnish that forms around the coin after years of aging and exposure. Patinated coins usually come in green colour. Ancient coin collectors collect patina coins because the patina effect is essential to prove the authenticity of the coin. However, the patina effect can be engineered on a coin; the process is called "Patination". Various chemical compounds can be applied on the coin to produce different patina effect on the coin.
Various Inserts
Nowadays it is very common for coin makers to add in a second element into their coin to enhance the marketability of the coin. Nowadays, inserts such as Swarovski Crystal, gemstones and jade are a popular addition to a collector's coin. If done properly, the inserts gives a soul-like perception to the coin.
Figure: Ural Owl with Swarovski Crystal insert (Left), Perth Mint's Year of the Dragon coin with gemstone on the eye (Center), Laos Year of the Dragon 2000 coin with Jade inserts (Right).
Patina is a type of tarnish that forms around the coin after years of aging and exposure. Patinated coins usually come in green colour. Ancient coin collectors collect patina coins because the patina effect is essential to prove the authenticity of the coin. However, the patina effect can be engineered on a coin; the process is called "Patination". Various chemical compounds can be applied on the coin to produce different patina effect on the coin.
Various Inserts
Nowadays it is very common for coin makers to add in a second element into their coin to enhance the marketability of the coin. Nowadays, inserts such as Swarovski Crystal, gemstones and jade are a popular addition to a collector's coin. If done properly, the inserts gives a soul-like perception to the coin.
