Factors in AU-to-MS regrade?

[bluel-migration]

I know that many times an AU-58 can actually have better eye appeal than an MS-60 (sometimes called AU-64). Supposedly the dividing line is presence of any circulation rub. However, I'm curious: how often these days does a high AU coin get re-graded to MS, either because of market consideration or maybe even re-considering what type the "wear" is determined to be?

 

What would be the determining factor in an AU-58 being regraded to MS-6X?

[BillJones]

I would say the mint luster and eye appeal would have a lot to do with such upgrades. Also the coin should have no significant marks.

 

The dirty little secret is that a lot of MS-62 graded coins are really very nice AU-58s. In a way there is really nothing wrong with that because it is a reflection of the market. I would rather have a very pretty AU-58 than an ugly, baggy MS-60 (MS-60 is seldom seen on holders) or 61. I paid the MS-60 price for AUs before there were slabs, and I've paid Unc. prices for AU coins where I really liked them.

[MarkFeld]

That is a tough one!

 

Among the factors that I consider are:

 

Luster - is it impaired to any significant extent on any areas of the surface?

 

Surfaces (including the rims) - do they appear to be consistent with a coin that has not seen circulation?

 

Strike vs. wear - are the areas which might be showing faint wear, merely weakly struck, instead? Knowing that certain types and dates of uncirculated coins are more likely to appear to be AU can help.

 

I have seen countless coins graded 60 and higher, which I felt should have been graded less than MS60. On the other hand, I occasionally see coins graded less than MS60, which look uncirculated to me.

 

Coin grading is somewhat imperfect, inconsistent and subjective. And in the case of trying to distinguish AU58 coins from uncirculated ones, those difficulties are often more heavily in play.

[Arizonadesertrat]

The reverse happens far more often. There are many coins, loosely graded during bull markets as MS61-63 or so, that would only grade AU55-58 if sent in today. There are also coins that are technically uncirculated, but have been silently net graded to AU58 because of factors other than wear---this is particularly true of 19th-century gold coins.

 

The dividing line that you noted used to be a clear-cut issue, but that is not true today---coins are market graded by the TPGs, and this means that strike, luster, toning, planchet defects (e.g., a lamination) all matter. Regarding your upgrade question, there is no simple answer.

[James_OldeTowne]

I know that many times an AU-58 can actually have better eye appeal than an MS-60 (sometimes called AU-64). Supposedly the dividing line is presence of any circulation rub. However, I'm curious: how often these days does a high AU coin get re-graded to MS, either because of market consideration or maybe even re-considering what type the "wear" is determined to be?

 

What would be the determining factor in an AU-58 being regraded to MS-6X?

First, I would say that in these days of overgraded coins (and this is my OPINION), many AU-58s are really AU-53s and AU-55s that have already been maxed out. So the number of TRUE "slider" AU-58s is actually not as high as some would like to believe. A TRUE AU-58, really should show essentially no wear at all, and all that should be seen is a touch of shift in luster on the high points, which often looks like a slight change in color, and even more often, a couple or so small marks, ticks or digs that had to have occurred as a result of circulation, and not mint storage. If you find a TRUE slider like that, then your odds of getting it recertified as MS-6X are excellent.

 

From my conversations with certain kinds of "specialists", these are what are targeted by the experts. Get an AU-58 with the "luster shift/color shift" that I've described, remove that change in color/texture, and voila -- a brand-new coin.

 

Very, very sadly, I think the biggest target for this kind of operation is bust coinage. Take an AU-58, gently remove evidence of circulation rub from the high points, reapply a bit of cosmetic toning, and then convince everyone that the coin just has "cabinet friction", and there you go, a nice new MS-62, not to mention a very nice payday.

 

The other huge target for this type of upgrade is sunken-relief gold (i.e. Indian head quarter-eagles and half-eagle). These might be the easiest TRUE sliders to turn into UNCs.

 

I must emphasize that this doesn't reflect my own personal practice, but what I have learned from talking with "the experts" who actually do it.

[coinman_23885]

Bust Half Dollars have always concerned me because of the concept of cabinet friction. I'm also bothered by the rub on so called "mint state" classic gold pieces caused, supposedly, from the soft metal coins rubbing against each other in mint bags.

 

 

[jom]

You know...because of all of the above concerns about friction vs wear I kind of take a different attitude about the whole thing. I realize "the market" seems to devalue a coin that has been in circulation but I've never really understood that. To me, a coin has an eye appeal. This appeal can be taken away by any number of factors:

 

Lack of luster

Bad strike

"bag" marks

ugly color

 

I've never understood why "the market" doesn't see that wear or circulation can't be just another one of these factors that detract from a coin. I mean, circulation marks really aren't any more distracting than, say, bag marks (ie mint made marks). A lack-luster coin (as made by the mint) is really no more distracting than rub from circulation. Who cares where the marks or lack of luster came from? It's all about how it affects the overall look of the coin. So why does a MS64 coin get devalued all the way down to AU58 because of some rub where a lack-luster coin might only be devalued down to MS62? IMO, that's just stupid (to be frank).

 

Because of this collectors get all worried about semantics like "friction vs wear" etc. To me if one coin has a nice pleasing look but has some rub and another is lack luster, baggy with ugly color but no wear the first coin should be worth more....possibly a LOT more depending on the magnitude.

 

But, hey, that's just me...

 

jom

[MarkFeld]

 

You know...because of all of the above concerns about friction vs wear I kind of take a different attitude about the whole thing. I realize "the market" seems to devalue a coin that has been in circulation but I've never really understood that. To me, a coin has an eye appeal. This appeal can be taken away by any number of factors:

 

Lack of luster

Bad strike

"bag" marks

ugly color

 

I've never understood why "the market" doesn't see that wear or circulation can't be just another one of these factors that detract from a coin. I mean, circulation marks really aren't any more distracting than, say, bag marks (ie mint made marks). A lack-luster coin (as made by the mint) is really no more distracting than rub from circulation. Who cares where the marks or lack of luster came from? It's all about how it affects the overall look of the coin. So why does a MS64 coin get devalued all the way down to AU58 because of some rub where a lack-luster coin might only be devalued down to MS62? IMO, that's just stupid (to be frank).

 

Because of this collectors get all worried about semantics like "friction vs wear" etc. To me if one coin has a nice pleasing look but has some rub and another is lack luster, baggy with ugly color but no wear the first coin should be worth more....possibly a LOT more depending on the magnitude.

 

But, hey, that's just me...

 

jom

 

 

I don't think you're giving "the market" enough credit. Often a coin with "a nice pleasing look", but with rub does sell for more than one which is unc. but lackluster, baggy, ugly, etc. BUT, that doesn't mean the one with rub should be graded MS60 or higher, instead of AU.

[jom]

I don't think you're giving "the market" enough credit. Often a coin with "a nice pleasing look", but with rub does sell for more than one which is unc. but lackluster, baggy, ugly, etc. BUT, that doesn't mean the one with rub should be graded MS60 or higher, instead of AU.

 

You might be right about me not giving enough credit. But then again I often see people make fun of others who pay serious money for AU coins. Sometimes it IS warranted...others times not.

 

And, yes, I think all coins should be given the appropriate grade. In fact, I believe FULL DISCLOSURE should be attempted at all times. Although, it might be that our present grading scale needs to be adjusted to take care of situations like this. I mean, they've done things like adding precision (which to me is absurd but that's another issue) but yet have really done nothing to help this particular problem.

 

You're right though...attempting to hide an otherwise AU coin in an MS holder by just stamping a label on it really is not the best way to handle things.

 

jom

[coinman_23885]

You might be right about me not giving enough credit. But then again I often see people make fun of others who pay serious money for AU coins. Sometimes it IS warranted...others times not.

 

Really? Pricing is all about eye appeal, and I cannot imagine any sophisticated collectors having this mentality. Most of the criticism that I have seen for people purchasing AU coins at higher prices is with people who are spending more than MS66 to MS67 money on common coins for the "Everyman's Set" or whatever it is called. It should be about purchasing the most coin for your money (in my personal opinion), and I have never seen an AU that I would value as highly as a MS66 or MS67 (or even MS63/64 or higher).

 

I agree with Mark (and you) concerning the grading aspect, and I disagree with the market grading concept. An AU is an AU and should never be in a MS holder regardless of how nice it is. On the other hand, this doesn't mean that I wouldn't pay more for a very choice AU that had superior eye appeal (within reason) over the bag marked MS60 (which I would tend to avoid any way because of the negative eye appeal). As I have seen you alluded to several times, I have seen several AU58s that look better than many MS62s that I have seen. A tiny bit of friction doesn't bother me, especially when the price difference between the slider and MS64-MS65 coin (with similar surfaces) is large.

 

[MarkFeld]

The coin below, graded AU58, was one I sold a few months ago.

 

While I agreed with the assigned grade, I paid MS money for it ($920 against an MS60 bid of $875) because it was one of the nicer looking Trade Dollars (Au or Unc.) I had seen in a good while.

 

[jom]

You might be right about me not giving enough credit. But then again I often see people make fun of others who pay serious money for AU coins. Sometimes it IS warranted...others times not.

 

Really? Pricing is all about eye appeal, and I cannot imagine any sophisticated collectors having this mentality.

 

I'm not sure what mentality you are referring to. I lost you there I guess. I do know there is a lot of criticism toward collectors who pay for color and in my mind that is the same issue. Paying more for the given grade due to eye appeal. Not the same issue of course but still....

 

 

 

Most of the criticism that I have seen for people purchasing AU coins at higher prices is with people who are spending more than MS66 to MS67 money on common coins for the "Everyman's Set" or whatever it is called. It should be about purchasing the most coin for your money (in my personal opinion), and I have never seen an AU that I would value as highly as a MS66 or MS67 (or even MS63/64 or higher).

 

That's only very recent but IMO it is NOT the same thing. In that case, people are paying for a LABEL not a coin. It's similar to the Gold CAC sticker thing in a lot of cases. Or the "doily" whatchamagig.

 

I agree with Mark (and you) concerning the grading aspect, and I disagree with the market grading concept. An AU is an AU and should never be in a MS holder regardless of how nice it is.

 

I do agree that market grading can be misleading so a suggestion could be to get rid of these labels such as MS or AU or whatever. REAL grading is having as much information about a coin that is possible. No hidden surprises. But that is impractical (like the old ANACS way of listing out the attributes) unfortunately. The best you can do is learn as much as you can about what is available in your favorite series and get a feel for pricing (which can be difficult...I find it a challenge) and...obviously....learn to grade.

 

jom

[bluel-migration]

Thanks for the discussion. I'd wondered for quite some time how/if one is able to distingush "cabinet friction" vs wear or bag wear from light circulation wear and how consistently graders are able to make that distinction.

[coinman1794]

Thanks for the discussion. I'd wondered for quite some time how/if one is able to distingush "cabinet friction" vs wear or bag wear from light circulation wear and how consistently graders are able to make that distinction.

 

Theoretically speaking, the primary difference is that rub (wear) caused by circulation is generally dull from hand oils, and cabinet friction is shiny from clean scraping action. Once either coin is dipped out, however, the difference can sometimes be impossible to detect. The graders do their best, but often it is splitting hairs. Discernable rub changes the category from Mint State to Circulated, while cabinet friction counts as a form of abrasion and changes the MS grade. Generally speaking, MS64 is the first grade that has neither of either, or at most very little.

[James_OldeTowne]

Personally, I believe "cabinet friction" is fiction. But, it provides a convenient rationale for TPGs to explain why true AU-58 coins get bumped into MS-62 (or higher) holders.

 

I have always seriously doubted that the rub on the highpoints of early coins is from sliding around on velvet trays while they were yanked in and out of "the coin cabinet". Rather, I'd guess the friction results from handling by the owner while the coins were being admired and shared with guests. But, that "handling" is identical to a coin handled in circulation, hence it should be considered the same with respect to grading.

 

Rub is Rub is Rub.

[MarkFeld]

Personally, I believe "cabinet friction" is fiction. But, it provides a convenient rationale for TPGs to explain why true AU-58 coins get bumped into MS-62 (or higher) holders.

 

I have always seriously doubted that the rub on the highpoints of early coins is from sliding around on velvet trays while they were yanked in and out of "the coin cabinet". Rather, I'd guess the friction results from handling by the owner while the coins were being admired and shared with guests. But, that "handling" is identical to a coin handled in circulation, hence it should be considered the same with respect to grading.

 

Rub is Rub is Rub.

 

James, I agree with you. Almost, that is..

 

Even in the situation as you described it, there is (or could be) a significant difference - the coin still acquires friction or rub. But it doesn't circulate in a way that also causes contact marks, hairlines and other post-strike flaws. In other words, you might end up with an AU67, instead of an AU58.

[physics-fan3.14]

Personally, I believe "cabinet friction" is fiction. But, it provides a convenient rationale for TPGs to explain why true AU-58 coins get bumped into MS-62 (or higher) holders.

 

I have always seriously doubted that the rub on the highpoints of early coins is from sliding around on velvet trays while they were yanked in and out of "the coin cabinet". Rather, I'd guess the friction results from handling by the owner while the coins were being admired and shared with guests. But, that "handling" is identical to a coin handled in circulation, hence it should be considered the same with respect to grading.

 

Rub is Rub is Rub.

 

James, I agree with you. Almost, that is..

 

Even in the situation as you described it, there is (or could be) a significant difference - the coin still acquires friction or rub. But it doesn't circulate in a way that also causes contact marks, hairlines and other post-strike flaws. In other words, you might end up with an AU67, instead of an AU58.

 

But it is still an AU - and should be graded as such. You can price it at whatever point you want, but call an AU an AU.

[MarkFeld]

Personally, I believe "cabinet friction" is fiction. But, it provides a convenient rationale for TPGs to explain why true AU-58 coins get bumped into MS-62 (or higher) holders.

 

I have always seriously doubted that the rub on the highpoints of early coins is from sliding around on velvet trays while they were yanked in and out of "the coin cabinet". Rather, I'd guess the friction results from handling by the owner while the coins were being admired and shared with guests. But, that "handling" is identical to a coin handled in circulation, hence it should be considered the same with respect to grading.

 

Rub is Rub is Rub.

 

James, I agree with you. Almost, that is..

 

Even in the situation as you described it, there is (or could be) a significant difference - the coin still acquires friction or rub. But it doesn't circulate in a way that also causes contact marks, hairlines and other post-strike flaws. In other words, you might end up with an AU67, instead of an AU58.

 

But it is still an AU - and should be graded as such. You can price it at whatever point you want, but call an AU an AU.

 

I agree. It's just a more desirable AU.

[James_OldeTowne]

Personally, I believe "cabinet friction" is fiction. But, it provides a convenient rationale for TPGs to explain why true AU-58 coins get bumped into MS-62 (or higher) holders.

 

I have always seriously doubted that the rub on the highpoints of early coins is from sliding around on velvet trays while they were yanked in and out of "the coin cabinet". Rather, I'd guess the friction results from handling by the owner while the coins were being admired and shared with guests. But, that "handling" is identical to a coin handled in circulation, hence it should be considered the same with respect to grading.

 

Rub is Rub is Rub.

 

James, I agree with you. Almost, that is..

 

Even in the situation as you described it, there is (or could be) a significant difference - the coin still acquires friction or rub. But it doesn't circulate in a way that also causes contact marks, hairlines and other post-strike flaws. In other words, you might end up with an AU67, instead of an AU58.

 

But it is still an AU - and should be graded as such. You can price it at whatever point you want, but call an AU an AU.

 

I agree. It's just a more desirable AU.

I certainly agree with you Mark! However, bear in mind the number of honestly and very lightly circulated coins that you have seen over the years that have actually managed to avoid getting marked up. They would look just like coins that were handled via the "cabinet friction" route.

[coinman1794]

Cabinet friction has been replaced by album slide friction, which creates a similar effect. I've taken some gorgeous Mint State Bust halves with scraped high points out of those albums with the sliding windows. I have used my NGC MS61PL Bust half as an example before; just a tiny touch of scraping on some of the high points is confirmed cabinet friction be the monster mirrored fields and frosty cameo devices. Yes, let’s call them what they are; that coin is not an AU58!

 

On coins that were not circulated, why should this surface scraping be counted as wear, and the coin called AU? It is supposed to count as surface abrasion, which merely lowers the MS grade, just like any other form of hard contact.

 

I believe there needs to be an attempt to differentiate, as not all coins with friction are the same. One thing I hate is when certified coins have friction all over, not just on the highest points, and are still called Mint State. Those coins are typically dipped AU58s, and there’s no arguing otherwise. Yet they somehow manage to grade up to choice uncirculated, along with the true cabinet/slide friction coins that really do deserve MS grades. Each coin has to be evaluated individually.

 

[Oldtrader3]

Maybe more than just a simple score change is what is needed to heal the continuing confusion with market grading and AU coins, particularly classic or gold coins where there may be no high graded MS population?

 

Maybe it is time that NGC came up with a better system than the present, full of gaps, AU62 system which they use to overlap graded AU coins into at least (3) MS grades? The present system is not only confusing but it promulgates a lot of abuse and unfair pricing practices by many dealers who exploit this grading system and use it as a way to possibly fool unaware collectors!

 

We all know that there is no equality between an AU 58 coin with a slight rub, which is graded MS61 and a MS61 graded with multiple rubs and hits (uncirculated) coin that will normally sell for much less than AU58 money and should rightfully so.

 

Why are we still using this antiquated, incomplete and unfair grading system which leads to many abuses and certainly causes confusion? Give me a reason, NGC, as to why we should keep using this flawed system? Don't tell me that the reason is because PCGS does. That is not a reason, it is an excuse! Why set your members up to be cheated? "Caveat Emptor" only goes so far and only protects specialists, than it becomes manipulation of the market, adding additional issues to an already confsuing system of grading.

 

Is there is no earthly reason why this sytem can not be modified somehow to minimise this issue with collectors?

[RWB]

Dealers define the "system," and it is their money that provides the revenue for the authentication & grading companies. Strict, objective assessment of a coin's surface condition would be used if it best served the needs of coin dealers and auctioneers.

 

Attempting to align "value" with a numeric "grade" was a fundamental fallacy of Dr. Sheldon's large cent system, and continues to be an obsession with some collectors.

 

[bluel-migration]

Seems to me like, if the difference in grading was more clear, that the problem lies in the perception that MS-60 is necessarily higher in order of quality after AU-58. If AU-58 is really more like an MS-63 with the slightest circulation wear instead of "friction", then the perception of ordering makes a mess of things.

[Oldtrader3]

Roger, you have defined the problem eloquently. What is the solution to not have this overlap of market grading where two coins are graded the same but are, in no way, the same in intent of grading or eye appeal? These coins are not even worth the same in the marketplace. There has to be a separate grading designation where this confusion can not happen and a system which provides clarity to pontential buyers as to what they are buying, not confusion and obfuscation.. Maybe the TPG's grade these coins as AU62 as a step which provides clarity at least, to potential buyers as to what they are buying.

[coinman1794]

Seems to me like, if the difference in grading was more clear, that the problem lies in the perception that MS-60 is necessarily higher in order of quality after AU-58. If AU-58 is really more like an MS-63 with the slightest circulation wear instead of "friction", then the perception of ordering makes a mess of things.

 

You are right. In reality, the Circulated (1-58) and Uncirculated (60-70) are two different systems. The reason the Unc grades go from 60-70 and not simply 1-10 stems once again from Dr Sheldon's attempt to assign arbitrary values to the grades.

[jom]

In reality, the Circulated (1-58) and Uncirculated (60-70) are two different systems. The reason the Unc grades go from 60-70 and not simply 1-10 stems once again from Dr Sheldon's attempt to assign arbitrary values to the grades.

 

Exactly...and the reason for the "two different" systems is that for whatever reason wear is not considered just another detriment to a coin's overall appeal. As I stated earlier is SHOULD be because in reality wear doesn't take away from the eye appeal of a coin anymore than bag marks or lack of luster or a bad strike does. If grading would take that way of doing things this arbitrary line in the sand of "circulation" wouldn't exist.

 

jom

[RWB]

...and poor Dr. Sheldon thought he was being "scientific" and objective... Of course, he also thought head bumps had meaning and that stealing coins was OK. Good thing he didn't have a coin press.... Did he live in Colorado?

[coinman_23885]

...and poor Dr. Sheldon thought he was being scientific" and objective... Of course, he also thought head bumps had meaning and that stealing coins was OK. Good thing he didn't have a coin press.... Did he live in Colorado?

 

[Oldtrader3]

Dealers define the "system," and it is their money that provides the revenue for the authentication & grading companies. Strict, objective assessment of a coin's surface condition would be used if it best served the needs of coin dealers and auctioneers.

 

Attempting to align "value" with a numeric "grade" was a fundamental fallacy of Dr. Sheldon's large cent system, and continues to be an obsession with some collectors.

 

There is the rub, pardon the pun! Dealers do to a great extent pay the TPG fees but they only to a point, actually control coin prices because ultimately there is a collector somewhere in the equation. Dealers can only sell a coin so many times back and forth to each other before they have to find a collector to sell to or they are just recirculating money and not adding value to the market with new money.

 

I do not really care by what means TPG's designate coin grades, whether it be alpha-numeric or whatever? Sheldon's system made some sense when originally applied to a low value cent grading matrix. However, whatever you call the grade, it should fairly represent the coin that is marked with that grade by the TPG's. In today's market with giant price swings between small grade increments, the MS70 grading system really does not often make sense!

 

What I do see a lot of now is many of the same certified coins, particularly gold and silver classic coinage with grades between AU50 and MS 62 (or even 63) recycling through auctions which are not fresh material in the marketplace and seem to just always be around and for sale. Maybe we should call these coins "The Peter Principle" of maxed out and/or problem coins which the collector quotient of this hobby will not readily buy because of the dynamic pricing structure and grading of AU55-MS62 coins being what it is? Plus, most of the coin collectors in the hobby have no idea whether this stuff really is (AU, BU, or whatever) and what it is worth?

 

This takes us right back to Laura Sperber's many articles about this specific grading issue and the lack of a forthcoming or forthright will in this industry to effectively deal with these coins and their pricing in order to "clean up the float", as stock traders call it and drive demand and thereby prices higher?

[Kurtdog]

I know that many times an AU-58 can actually have better eye appeal than an MS-60 (sometimes called AU-64). Supposedly the dividing line is presence of any circulation rub. However, I'm curious: how often these days does a high AU coin get re-graded to MS, either because of market consideration or maybe even re-considering what type the "wear" is determined to be?

 

What would be the determining factor in an AU-58 being regraded to MS-6X?

I'll say with the terminology you're using you're right on top of the issues. Unfortunately, I'll have to answer your "determining factor" question with a question: am I a buyer, or a seller?