Photo Credit: Silver Torch66
AU-58 coins are one of the best-kept secrets in numismatics. But coin investors and collectors alike have started to grasp the potential of these underrated gems.
In order to appreciate the unique appeal of AU-58 coins, we must first understand the Sheldon grading scale. Invented by the numismatist William Herbert Sheldon in 1949, it was first intended for grading U.S. Large Cents. The scale ranges from 1 to 70, with higher numbers representing better states of preservation. For example, a Poor-1 coin is an almost worn-smooth slug and a Mint-State-70 coin is absolutely perfect.
The Sheldon grading scale was updated to apply broadly to all coins in the 1970s. Today, it is the global standard used by the two largest and most respected third-party grading services - NGC (Numismatic Guaranty Corporation) and PCGS (Professional Coin Grading Service).
The Sheldon grading scale designates MS-60 through MS-70 as Mint-State. This means that all coins in this range are technically uncirculated, with no wear whatsoever. Instead of using wear as a grading criteria, Mint-State coins are sorted according to the quality of their strike, along with the presence of mint luster, marks or hairlines and any attractive/unattractive toning.
So an MS-70 coin should be perfect, with no visible marks, a strong strike and full mint luster. In contrast, MS-60 coins have a combination of distracting imperfections, unsightly tarnish and a weak strike. As a result, it is almost axiomatic that low-grade Mint-State coins, like MS-60 and MS-61 examples, are relatively unattractive specimens with little eye appeal. In fact, they are often downright ugly!
However, coins below the MS-60 designation are primarily graded according to the amount of wear they have received. So coins graded from AU-50 to AU-58 fall in the About Uncirculated category. These coins have received anything from very light, even wear to only a hint of rub on their highest surfaces. Original mint luster is the only other criteria for AU coins, with higher grades within the classification requiring more luster.
You can probably see where I'm going with this analysis.
If AU-58 coins acquire that grade purely because they have an almost imperceptible amount of rub on their highest points, then there is no reason that an AU coin with good eye appeal can't look better than an MS-60 or MS-61 coin.
This is a numismatic revelation for coin investors.
PCGS & NGC Certified AU-58 Pre-1933 U.S. Gold Coins for Sale on eBay
You see, eye appeal is one of the most important traits an investment-oriented coin can possess. Relatively small increases in eye appeal can have a major impact on the desirability - and thus value - of a rare coin. After all, coins are miniature works of art. If one coin with a particular type, date and mintmark looks objectively better than another example, it only stands to reason that it would be more valuable.
Normally, we would expect coin prices to rise as we ascend the Sheldon grading scale. After all, each successively higher grade should have more detail, luster and (indirectly) eye-appeal than the one below it.
And this is indeed the behavior we tend to observe in the rare coin market, particularly for Mint-State coins. Once you ascend to coins graded MS-63 and higher, it isn't unusual for each step-up in grade to be accompanied by a large - or even massive - price increase. And this is in spite of the fact that it is difficult for the layman to distinguish the minute visual differences between these grades. For instance, the average person can't reliably distinguish between an MS-64 and MS-65 coin.
About Uncirculated coins, particularly AU-58 coins, are the only potentially systematic wrinkle in the rare coin market's continuum of Higher Grade = More Eye Appeal = Higher Prices.
This brings us to the concept of the elusive "AU-64" coin. What if there was a beautiful MS-64 coin that had somehow received the tiniest bit of wear or rub sometime in the distant past? It could no longer be properly called Mint-State anymore, because it isn't technically uncirculated. The best grade it could hope to achieve on the Sheldon grading scale would be AU-58. Oh, but what a glorious AU-58 coin it would be!
PCGS & NGC Certified AU-55 & AU-58 Carson City Morgan Silver Dollars for Sale on eBay
It is easy to see how an AU-58 coin with the eye appeal of an MS-64 coin would sell at a significant premium over your run-of-the-mill MS-60 or MS-61 coin. In fact, it would be easy to see how a superior AU-58 specimen could achieve MS-62 or even MS-63 price levels, provided it has stellar eye appeal.
Simply put, AU-58 coins are a numismatic loophole that every serious coin investor and collector should be exploiting.
And, in all honesty, a lot of knowledgeable coin enthusiasts have been taking advantage of the wonderful potential of good-looking NGC and PCGS AU-58 certified coins over the last 15 to 20 years. For example, many desirable 19th century U.S. coin series command high premiums for AU-58 pieces with strong eye-appeal. In fact, it can be difficult to find AU bargains in series like Capped Bust half dollars or Trade Dollars because of this trend.
But the U.S. rare coin market is the most forward-looking, sophisticated coin market on the planet. So although the advantages of AU-58 coins may already have been recognized in 19th century U.S. coins, it still hasn't been widely applied elsewhere.
This means there are still AU deals to be found in 20th century U.S. coins & world coins. I especially like European gold coins in AU-58 condition. They haven't been picked over yet, giving the numismatic enthusiast a lot of great examples to choose from.
PCGS & NGC Certified AU-58 European Gold Coins for Sale on eBay
I should also point out that some AU-55 coins can also share the phenomenal eye appeal of AU-58 specimens, just with a touch more wear. So although I've been talking about AU-58 coins throughout this article, the same concept can also apply to AU-55 examples, just somewhat less frequently.
For instance, one of my recent Spotlight posts featured a stunning 1882 French 100 franc gold coin certified AU-55 by NGC. This impressive gold coin, with a mintage of only 37,000 pieces, looks far better than your average MS-60 or MS-61 example. But it is selling for a ridiculously low 38% premium over its bullion value!
Of course, I should also point out that not all AU-55 or AU-58 coins have great eye appeal. Unlike with Mint-State coins, the AU grades primarily designate wear, not eye appeal. So it is certainly possible to run into ugly or sub-par AU-58 coins. A certain amount of patience and discretion is necessary to cherry pick a gem AU example.
Let me part with a word of caution. There is an old numismatic saying: always buy the coin, not the holder (or the grade on the holder, for that matter). This dictum has never been more important than when dealing with AU coins. But although it requires discipline, AU-58 coins are one of the best ways I know of to score a deal in the world of rare coins. And that little bit of knowledge is worth its weight in gold.
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