Much like you should never judge a book by its cover, you should also never judge a coin by its face value. A coin’s face value is the denomination stamped into the coin. For instance, a quarter’s face value is 25 cents. But when it comes to precious metal bullion coins and other collectible coins, their actual worth can be significantly higher than their face value.
A coin’s actual worth can be determined by a knowledgeable dealer based on several factors. These include:
- Melt value: This speaks to the value of the metal within the coin, based on current market prices.
- Condition: A coin kept in good condition will be worth more than one that has damages like scratches or dings. Graded coins retain their value when their plastic slabs are kept in good condition as well.
- Collectibility: A coin or round may be worth more if it is part of a discontinued series, a limited edition, or one-time mintage. Supply and demand laws dictate that rare or scarce coins remain valuable.
- Historic value: Older coins and/or those with historic significance may be more valuable as well.
A coin’s actual worth is often quite a bit higher than its face value. The denomination printed on paper money determines its entire worth since banknotes have no intrinsic value, while the denomination stamped into precious metal bullion coins does not represent the whole value of the coin. Even without a stamped face value, precious metals retain value as a source of currency. This intrinsic value is why investing in bullion is such an appealing option for many investors.
Bullion coins should never be judged by their face value because that’s not where their true value lies. Are you a collector or investor of precious metal coins? Let us know what makes them valuable to you and your family in the comments section below.
John says
People should be told that the value of precious metal does not change.
An ounce of gold, or an ounce of silver, is the same as it was millenia ago.
It is the amount of fiat currency notes that it takes to buy it that changes. It’s the value of the dollar that is falling that makes the “price” of precious metals go up. It takes more valueless paper to attain an ounce of metal than it did in the past.
I explain it to anyone who will listen. Few understand it.