In this article we will look at how the value of gold coin is determined. But first of all what you should know is that there are many factors which will determine the value of any gold coin, such as its age, how rare it is, the condition it is in and also how many of them were originally minted (produced).
But in order to really determine the value of gold coin it comes down to its intrinsic value. Which relates to the gold content of the coin and also the collector’s premium for gold coins?
When discussing intrinsic value then you are talking about the value of the gold content within a coin after it has been melted down. A coin that was produced before 1933 is often referred to as a $20 gold piece. This is because they contained nearly an ounce of gold in them. At this time the price of gold was set at $20.67 an ounce and this is how the name of the coin arose. So a $10 gold piece would normally contain about 1/2 ounce of gold and a $5 gold coin would contain about a 1/4 ounce of gold. But today the price of gold is currently set at $375 but for ease of reference we will say it is $400 an ounce. Then in today’s terms you would talk about the intrinsic value of gold coins like so.
We have looked at the intrinsic value of a gold coin, we will now having a look at the collector’s premium. This particular part of the value of a gold coin relates to the quality and grade of the gold coin. Each coin today is graded using the “MS” scale, which means “Mint State” and ranges between 60 and 65. The highest most pristine grade of gold coin is one that is given a grading of “MS65″, whilst “MS60″ denotes the gold coins that are the lowest quality that have been minted. Often the price of one coin will vary to another because of how rare or popular it is. Certainly the value of a gold coin will increase if it is more rare and of the highest quality compared to those that are popular are only of a good quality.
Hopefully the information provided above has helped to provide you with a better understanding of how the value of gold coin is calculated.