Standard International Coin Grading Terminology

A great deal of subjectivity surrounds the 'art' of establishing a coin's grade or condition. Invariably, the seller will err on the higher side while the buyer will find any number of blemishes, hairlines or weak spots to lower the grade. To bring some degree of 'science' or objectivity to this process, standard classifications and descriptions have been established. The following table sets out the equivalences between various grading scales used throughout the world in assessing the state of preservation of a coin or medal. Their meanings, along with common derivative grading terms, are explained in the next section.

For Australian Circulation Type Commonwealth Coins

Definition of Coin Grading Terms

Proof

Technically, the term proof refers to a coin's method of manufacture, not its state of preservation. However, in reality, the term is used in grading to describe a pristine example of a proof manufactured coin. Lesser graded or damaged examples are described as impaired proofs.

Brilliant Uncirculated -FDC (Fleur de Coin - flower of the die.

Also referred to as FDC (Fleur de Coin - flower of the die). Although struck with normal dies, a coin described as BU is pristine, almost proof like in appearance, being perfectly sharp, absolutely flawless and showing no signs of wear or bag marks. On the US grading scale, such a coin is described as MS-65. Grading at this superior level has become more complex in recent years with distinctions being made in many catalogs between (from highest to lowest state of preservation) - FDC, GEM Uncirculated and Choice Uncirculated.

Uncirculated

A coin which shows no signs of being in circulation. Coins in mint rolls are classed as uncirculated. Due to high-speed production techniques, even uncirculated coins may show slight imperfections such as minor bag marks or tiny rim indentations, especially on larger coins.

Extremely Fine or Extra Fine (EF or XF)

Under magnification, these coins show only the slightest amount of wear in addition to slight bag marks. Wear will be confined to the very high points of the design and the natural mint lustre common to uncirculated coins will be still almost intact.

Very Fine (VF)

Slightly more wear will be evident without magnification but the coin is still in a high state of preservation. A magnifier will show numerous light scratches over the high points and on the fields of the coin. Most of the high points will be affected and only traces of the mint lustre will be present.

Fine (F)

Considerable signs of wear will be apparent on raised surfaces and the fields of the coin will be quite dull. Almost all sections of the coin will exhibit some forms of wear. Generally there will be no traces of lustre and the rim border will be smooth in parts.

Very Good (VG)

A strange description for a coin which is rather ordinary. If you see a coin for sale described as 'circulated', you should assume that this is the best it will grade. The whole of the coin is showing significant amounts of wear although all of the main detail is still visible. Usually only scarce coins and those of historical significance are worth collecting in this condition.

Good (G)

Again, the wrong word to describe the state of preservation of the coin. Nearly all the fine detail is lost although most of the main detail and lettering is still visible. The surface of the coin will be showing considerable scratching.

Fair

This coin is really showing its age or abused life. The design, including most of the main features, have disappeared through many years of handling. At best you can still make out the issuing country.

Poor

You can tell what shape the coin is, but that's about all. There is virtually nothing left to see - definitely scrap value only.

In-Between Grades, Split Gradings and Additional Descriptions

Many dealers, in catalogs and advertisements, use in-between grades such as nUNC, aVF or gVF. A coin described as aVF (almost VF) is one not quite up to VF standard but pretty close to the mark. It might also be described as F+ or nVF (nearly VF).

A coin described as gVF (Good VF) meets all the requirements of VF condition and then a little more. It could also be described as VF+ or, if it were a little better still, aEF.

The following table of in-between gradings, with their approximate percentage grading equivalents, may be useful:

Where the condition on one side of a coin varies from that on the other side, it is common practice to report the two gradings separately. For example, a coin described as VF/nVF has an obverse in Very Fine condition while the reverse has slightly more wear and grades just below VF.

When split gradings are used, it is common practice to state the condition of the obverse first and the reverse second. Another common practice is to indicate a range. This is normally used where a number of coins are offered as a lot. For example, EF-UNC indicates the coin(s) grade between both those classifications.

Another good practice in grading coins is to describe abnormal features of a coin as well as the overall grade. Examples include:

EF+, lightly toned

aUNC, tiny rim nick on reverse

VF, washed, retoning

Proofs, Patterns and Specimens.

Proof coins represent the very best of the minter's art. Today, they are manufactured from hand-polished dies, are virtually flawless and are superbly presented in customized packaging, with strict limits on production.

Originally they were trial coins, hand struck at the start of a mintage, in order that any flaws could be detected and rectified. Then they became a special sample, kept as an example of each mintage. Today, they are considered numismatic coins - of interest to coin collectors - and are sold at fixed prices consistent with their quality and rarity.

For most Australian pre-decimal proof and pattern issues (particularly gold sovereigns and half sovereigns), mint records were poorly kept. Confusion has resulted from references to Proof, Pattern and sometimes Specimen coin strikes, all of which seem to have similar qualities. To overcome these description difficulties, a proof or specimen coin is now defined as a specially prepared coin which also has normal circulating coins issued with the same date and die types. On the other hand, a Pattern is an issue of a particular date and die types for which no circulating coins were issued. Patterns may, and often do, show slight differences from circulation issues as they were usually intended as examples of a change in proposed design, manufacturing process or composition.

Modern proof coins are minted from highly polished dies using specially prepared blanks with a bright surface. Extra pressure is used to strike the coin and often the blank is struck more than once. They are the result of a number of labourous processes. Firstly, the die surface is sand blasted and hand polished using diamond lapping paste applied with soft wooden sticks. A final polish to produce a brilliant mirror finish is achieved with a dental drill covered with a soft pad. Next, the surface of the die is covered with clear tape and a scalpel is used to expose the design areas. Again the die is sand blasted resulting in a frosted finish on exposed design areas. The final process is for the die to be chrome plated before being used to strike coins.

The blanks intended to become proof coins are also given special treatment. Prior to striking, they are immersed in a weak acid bath to remove any surface impurities. From that point on, they are only ever handled with gloved hands or special tongs to ensure that the surfaces remain pristine.

Grading Services and the 'Slab'

In the late 1980's, a new innovation, the so-called slab, was introduced in an attempt to remove the subjectivity surrounding grading. Used particularly by investors, high value coins and other numismatic pieces are forwarded to a recognized, independent grading agency for evaluation. Along with a grading certification, each item is then sealed within a 'slab' of inert plastic.

Officially known as 'Encapsulated Numismatic Products', slabs were intended to promote investor confidence and enable the purchase and sale of numismatic items, sight unseen. In the U.S.A., the practice has enabled Wall Street companies to confidently trade in numismatic items through the investment market, with the actual item being traded remaining locked away in a bank vault.

The practice has its critics. Many believe that the entry of large scale investors into the numismatic market has pushed up prices to the point where genuine collectors are being pushed out.

Further, controversy of grading continues. Dealers and investors have been known to send a piece to several different grading services, seeking that slightly higher grading which will add hundreds or even thousands of dollars to the value of the piece.

One advantage of the slab is that market forces have helped to reduce the gap between the buying and selling price of items - the dealer's margin. This, however, is more than offset by the increased volatility of investment market driven valuations. Alongside the more established benchmarks of valuation - rarity and condition - the criteria of market forces has made numismatics a much more complex hobby.

Sources:
NUMI$NEWS Magazines - Sept, Oct, Nov, 1996 - M. R. Roberts, Wynyard Coin Centre,
'Rigby's Coin and Banknote Guide' by Greg McDonald - 1983,
Renniks Australian Coin and Banknote Guide by Dion H. Skinner - 1980 .