AU58 brings more than MS60 $20 gold

[Nutmeg Coin]

This type of thing surprises me, considering how many collectors, dealers and investors are grade and price bound in their bidding unless they see upgrade candidates.

 

HA recently sold this 1866 $20 in AU58 for $9400; the MS60 brought $8225.

 

http://coins.ha.com/itm/liberty-double-eagles/double-eagles/1866-20-motto-au58-ngc/a/1231-6650.s?ic4=GalleryView-ShortDescription-071515

 

http://coins.ha.com/itm/liberty-double-eagles/double-eagles/1866-20-motto-ms60-pcgs/a/1231-6651.s?ic4=GalleryView-ShortDescription-071515

 

Thoughts on how this happens, in this and other cases?

[brg5658]

Thoughts on how this happens, in this and other cases?

 

My thoughts are that the AU58 coin is a MUCH better looking coin than the MS60 one.

 

MS60 is a sort of "slap in the face" type of grade. The coin is technically UNC, but they are usually outright dogs. This one seems to have been through a pretty nasty knife fight.

[Six Mile Rick]

I just mentioned to someone last night that usually a AU58 looks better than a MS61 to MS63. With that being said yes -- I would also pay more for a AU58 than MS60 list values. Nothing worse than paying for a MS63 and looking at those hits on the coin every time I want to view my purchase. Rather own a SWEET looking AU58 or go to the next better looking levels -- MS64 and up.

 

Rick

[coinsbygary]

It's all about eye appeal. I can't speak for anyone else but I am willing to pay more for a coin that looks nice and is graded properly. I don't care what the list price of the MS-60 is, if it doesn't look nice, it will not get anywhere near list price. After all a coin is only worth what someone is willing to pay for it.

Gary

[mumu]

Don't see a problem with this. AU58 are the gems of the AUs. Just because she's a virgin, don't make her hotter.

 

I don't think that's an AU58 though. 55 maybe 53

[MarkFeld]

 

I thought it was common knowledge that often, AU58's are more appealing looking and sometimes, even better technically, than MS60's.

[coinman_23885]

I thought it was common knowledge that often, AU58's are more appealing looking and sometimes, even better technically, than MS60's.

 

+ 1

 

[Nutmeg Coin]

Actually I liked the MS60 more than the AU58 in this case. The MS60 speaks to me as part of the wild and wooly 1860s when it was real money and indicative of that transitional type II year 1866. Everyone has their preferences, but if you buy a coin you like but may have a narrower collecting audience, it may be bad business.

[brg5658]

Just because she's a virgin, don't make her hotter.

 

Hahahaha.....

[bstrauss3]

AU58 is usually a gem, but with a tiny bit of wear.

MS60 is an ugly dog

 

 

[physics-fan3.14]

Quite often, AU-58's are much more attractive, higher quality coins. The 60 grade is only given out if the coin is banged up, scraped, hairlined, dinged, ugly toned, weak luster - its a dog. 58s are quite often very attractive coins, with just a touch of wear. I'll take a pretty 58 over just about any 60 any day of the weak.

 

As an example, I was looking at a couple of Morgans at a dealer's booth today with Messydesk, both PL. One was a '78 graded 60PL, and the other was (I forget the date) graded 55PL. The 55PL had wear and some marks in teh field, but was overall far more attractive than the 60PL.

[RWB]

Agreed - especially with large diameter coins.

[wheat'swheats]

I am in the process of building an Au58 Indian Head Cent set and have found that all the 1877s I have attempted to get have all been more expensive than its low MS counter part by several hundred dollars.

[RWB]

Here's a situation that might be helpful

 

Two $5,000 bags of double eagles leave the Philadelphia Mint. One bag is shipped to Europe as part of international payments; the other is shipped to the Philadelphia Federal Reserve Bank for domestic use.

 

The bag of gold vacationing in Europe is passed from one central bank to another and then from one commercial bank to another. It never enters commerce but is repeatedly jostled, shaken, counted and stacked as it moves around. Eventually the bag is sold to an American coin broker who sells the coins to a retail dealer. A coin is authenticated and graded as MS-61 - obviously because it has full luster, but it has acquired a lot of nicks, scrapes and dings during its travels (it might even have some surface wear from being slid across counting tables too many times).

 

The Philadelphia FRB bag is opened and subdivided into 10 small bags of 25 coins each. These go to local commercial banks where they are acquired by customers. Joe McSchmoe, a customer of First National Bank of Doylestown, PA, gets $200 (10 pieces) in double eagles for use in his illegal off-track betting business. Later that day, Joe pays out on the the 20s to Larry Smith, in payment on a winning wager. Larry puts to coin away as a memento and ti is later inherited by Larry's great granddaughter who sells it to a local coin dealer. The coin is authenticated and graded AU-58 - obviously because of the minor handling and circulation.

 

The AU coin - although clearly having disturbed luster and possibly slight wear is not "Uncirculated" - has only a few dings and marks.

 

The BU coin is a mess but remains "Uncirculated" in the technical sense.

[jom]

This issue of AU vs. MS really boils down to traditional grading. The fact is that wear or rub has been arbitrarily used as some "break" point in the grading system we have. To me it shouldn't be any more of a detriment to a coin than bag marks, lack of strike or poor luster due to manufacture.

 

It is what it is so some people simply pay more for the superior coin anyway despite the price sheets.

 

jom

[physics-fan3.14]

This issue of AU vs. MS really boils down to traditional grading. The fact is that wear or rub has been arbitrarily used as some "break" point in the grading system we have. To me it shouldn't be any more of a detriment to a coin than bag marks, lack of strike or poor luster due to manufacture.

 

It is what it is so some people simply pay more for the superior coin anyway despite the price sheets.

 

jom

 

The break of "wear" or "no wear" is a very logical break in the grade of a coin. The problem is, in a market grading scheme the "grade" is a reflection of the "value." In the market grading scheme, a 58 is worth more than a 55 and less than a 60 - the numbers are based on an increasing value. The grade and the value are (theoretically, more or less) the same number.

 

When you break away from the market grading scheme and grade on a technical basis, the line between AU and UNC is very clear. However, technical grading is divorced from valuation - a 40 may be worth than a 50, a 58 may be worth more than a 62. The grade is one number, and the value is a different number.

[coinman1794]

This issue of AU vs. MS really boils down to traditional grading. The fact is that wear or rub has been arbitrarily used as some "break" point in the grading system we have. To me it shouldn't be any more of a detriment to a coin than bag marks, lack of strike or poor luster due to manufacture.

 

It is what it is so some people simply pay more for the superior coin anyway despite the price sheets.

 

jom

 

The problem arises because wear and friction are two different things, and it can be hard to tell them apart in some cases (usually when a slider has been dipped, eliminating the hand oils and dullness of actual wear).

 

"Wear" results from hand contact and the careless treatment of normal handling in circulation, and it creates dull high points and missing luster in the open fields, in addition ot random hairlines going off in many directions (typically known as "handling lines.") This results in a circulated grade. "Rub" is merely a form of light wear.

 

"Friction" is the result of blunt trauma inflicted on the high points of the coin by other coins, old collector cabinet drawers, album windows, etc--which creates tiny scrapes on high points--resulting in a reduced Mint State grade. Thus, friction is "no more of a detriment to a coin than bag marks, lack of strike or poor luster due to manufacture." Typically, friction does not dull the surfaces; fresh friction may actually reveal bright, fresh metal. The fields of most coins are not affected by friction, nor will one encounter the tell-tale handling lines of circulation on a Mint State coin with friction.

 

Again, friction is not wear, and a distinction is absolutely needed between these two states of preservation.

 

 

[GoldFinger1969]

Here's a situation that might be helpful Two $5,000 bags of double eagles leave the Philadelphia Mint. One bag is shipped to Europe as part of international payments; the other is shipped to the Philadelphia Federal Reserve Bank for domestic use.The bag of gold vacationing in Europe is passed from one central bank to another and then from one commercial bank to another. It never enters commerce but is repeatedly jostled, shaken, counted and stacked as it moves around. Eventually the bag is sold to an American coin broker who sells the coins to a retail dealer. A coin is authenticated and graded as MS-61 - obviously because it has full luster, but it has acquired a lot of nicks, scrapes and dings during its travels (it might even have some surface wear from being slid across counting tables too many times).The Philadelphia FRB bag is opened and subdivided into 10 small bags of 25 coins each. These go to local commercial banks where they are acquired by customers. Joe McSchmoe, a customer of First National Bank of Doylestown, PA, gets $200 (10 pieces) in double eagles for use in his illegal off-track betting business. Later that day, Joe pays out on the the 20s to Larry Smith, in payment on a winning wager. Larry puts to coin away as a memento and ti is later inherited by Larry's great granddaughter who sells it to a local coin dealer. The coin is authenticated and graded AU-58 - obviously because of the minor handling and circulation.The AU coin - although clearly having disturbed luster and possibly slight wear is not "Uncirculated" - has only a few dings and marks.The BU coin is a mess but remains "Uncirculated" in the technical sense.

I mentioned this previously in a post somewhere else here. The "dividing line" apparently HAD to be drawn and the hypotheticals you and I asked about were apparently so inconsequential that whoever designed today's hybrid ANA/Sheldon scale never worried too much about a coin that circulates for a few days or 1 day or a few hours or even 10 minutes....and is then stored away in velvet for decades....vs. a coin that slides around in a bag that is moved every few weeks in a bank vault in Europe.

 

I guess the exectation was that "circulated" would not mean just being handed off from one hand to another very gently and then placed in a pocket with nothing else and then into a velvet pouch. Conversely, I guess you could have a bag of MS70s that gets dinged every few days for years as they are flung and slung and moved such that they get wear and tons of big dings and gashes and yet in theory should never fall below MS-60.

 

I guess AU-58 and MS60/61 have that overlapping area that is gray. Thankfully, it's not that big and only seems to be an issue in outlier situations.

[GoldFinger1969]

Again, friction is not wear, and a distinction is absolutely needed between these two states of preservation.

But a coin that circulates for a few hours and gets "wear" could be much less damaged than one that stays in the bag from the mint and gets "friction" from sliding around other coins for months or years, right ?

[mumu]

This situation is easier to understand if you separate circulated coins from uncirculated coins as a different thing, rather than make 60 the continuation of 58. Looking at it this way you can say something like the most desirables of the circulated coins might be worth more than the least desirable of the uncirculated.

 

If a new car has been sitting abandoned rusting and doesn't run, while a slightly used one has been well taken care of, its quite possible the used car is worth more than the new.

[GoldFinger1969]

This situation is easier to understand if you separate circulated coins from uncirculated coins as a different thing, rather than make 60 the continuation of 58. Looking at it this way you can say something like the most desirables of the circulated coins might be worth more than the least desirable of the uncirculated. If a new car has been sitting abandoned rusting and doesn't run, while a slightly used one has been well taken care of, its quite possible the used car is worth more than the new.

Agreed....I think intuitively we just think each and every MS-60 should be worth more than even the best AU-58.

[Mr.Mcknowitall]

IMHO, and I understand it means nothing and is not important to the world, I view 58, 61 and 62 as marketing schemes. Setting aside the wear issue and dings count scenario, The 61 and 62 are not remotely held to a higher standard than a 60 in market grading. It is in the coins I have viewed with 61 and 62 grades a very random nothing in common designation that is more often than not an also ran grade. Most 61/62 pieces are silly to even recognize as such, and should probably receive a 60 grade. As to 58, this is tantamount to the older slider marketing scheme. To me, and again it is my opinion that means nothing to anybody, the hardest circulating set to assemble in most series is 45. I would much rather have a 45 1877 cent than a 58. In virtually any Barber or Bust or SL series, the same. It is the challenge for me, not the market grading.

[jom]

Again, friction is not wear, and a distinction is absolutely needed between these two states of preservation.

 

That's all probably true but personally it doesn't matter to me. All that matters is what the coin looks like. Assuming whatever has happened to it is "natural" the coin with the best preservation should be worth more regardless of whether it has seen wear or friction or whatever you want to call it.

 

The market (the majority so to speak) may not agree hence the values of many high end AU will lag behind MS pieces. Which, to me, is an advantage to the discrete buyer....

 

jom

[jom]

When you break away from the market grading scheme and grade on a technical basis, the line between AU and UNC is very clear. However, technical grading is divorced from valuation - a 40 may be worth than a 50, a 58 may be worth more than a 62. The grade is one number, and the value is a different number.

 

Again, all probably true. However, it seems the TPGs aren't doing a good job of it because I still see AU coins that are vastly superior to many of their MS counterparts. At the same time I hear people whining that certain coins that are in MS holders should really be AU and were graded MS due to the "market". So which should it be?

 

There just seems to be big differences in opinion in how many in the coin market view grading. Then add to the fact the inconsistencies you see with the TPGs you end up with a big jumbled mess....

 

jom

[RWB]

Impartial coin grading does not consider market value or market opinion. It states, simply and directly the level of preservation of the coin. An AU coin has evidence of wear or similar handling that slightly disturbs its luster in the fields and dulls the very highest points of relief.

 

That a true AU coin might be sold for a higher price than a MS-60 is irrelevant.

[Mr.Mcknowitall]

Impartial coin grading does not consider market value or market opinion. It states, simply and directly the level of preservation of the coin. An AU coin has evidence of wear or similar handling that slightly disturbs its luster in the fields and dulls the very highest points of relief.

 

That a true AU coin might be sold for a higher price than a MS-60 is irrelevant.

 

Concur.

[World Colonial]

Impartial coin grading does not consider market value or market opinion. It states, simply and directly the level of preservation of the coin. An AU coin has evidence of wear or similar handling that slightly disturbs its luster in the fields and dulls the very highest points of relief.

 

That a true AU coin might be sold for a higher price than a MS-60 is irrelevant.

 

Concur.

 

Same here

[physics-fan3.14]

Impartial coin grading does not consider market value or market opinion. It states, simply and directly the level of preservation of the coin. An AU coin has evidence of wear or similar handling that slightly disturbs its luster in the fields and dulls the very highest points of relief.

 

That a true AU coin might be sold for a higher price than a MS-60 is irrelevant.

 

Concur.

 

Same here

 

I never said I agreed with the practice. I was merely educating people that this does happen. Often.

[Mr.Mcknowitall]

Impartial coin grading does not consider market value or market opinion. It states, simply and directly the level of preservation of the coin. An AU coin has evidence of wear or similar handling that slightly disturbs its luster in the fields and dulls the very highest points of relief.

 

That a true AU coin might be sold for a higher price than a MS-60 is irrelevant.

 

Concur.

 

Same here

 

I never said I agreed with the practice. I was merely educating people that this does happen. Often.

 

I do not believe the reply was addressed to you, and I don't think anyone was being accusatory of your thoughts.

[RWB]

My comment was generic - not aimed at anyone or any ideas - it's how I happen to feel about the grading of coins.