Coin collectors and dealers alike have witnessed huge increases in the prices of coins over the last 20 years. There are a number of factors that can affect the price of coins, unstable economies, low interest rates and lack of confidence in the banks.  After all, coins are a tangible asset rather like gold, when the price of gold is high coins are usually not far behind. The type of coins that have seen huge gains are those that are rare but more importantly those that are in superb condition. Third party grading has been an enormous factor in this trend but I will discuss this later.

The first time I witnessed a noticeable price increase was in the Slaney sale part 1 back in 2003. A varied sale of British coins, predominantly hammered, milled, gold and silver coins. The one thing that these coins had in common was their superb state of preservation. Only the highest quality had been collected, even the rarer items were all the finest or one of the finest known. Over the next 20 years this gradually set a trend of collectors looking for the best examples they could possibly find.

The coin market jumped again in the 2007/2008 financial crisis, with low interest rates investors began to look for alternative investments to place their money. Coins seemed very attractive especially gold and silver coins. More so gold coins, investors could relate to the precious metals content. ‘Blingy’ gold 5 guineas and 5 pound pieces saw the steepest gains combined at this time with the ever growing popularity of third party grading, the investor-collector was born. With continued low interest rates the coin market steadily rose until the pandemic hit and we again saw rapid increases in the price of coins.  During the pandemic , when people couldn’t view physically, third party grading came into its own as it provided an unbiassed or ‘disinterested’ observation as to the condition of a coin – and set a new norm for grading coins.

The debates on third party grading are endless, I personally think it does more harm than good. No one though can argue that it has radically changed the coin market. A vast array of record prices have been achieved year upon year. Conversely, I also believe third party grading has destroyed the value of many top quality coins, with the slightest issues or incorrect grading…….more on this later on.

In this article I am going to discuss three very different coins but all extremely rare and popular in their own right.

1/ A milled gold pattern, extremely rare and the finest graded by NGC.

2/ A hammered coin in silver, extremely rare, extremely collectible due to the historic significance of the era in which it was struck and although in poor condition, problem free – but, not graded by a third party grader.

3/ A large hammered gold coin, with huge historical significance, well struck and one of the finest known – however, due to a few slight issues, unable to receive a numbered grade from a third party grader.

1729 George II Proof Guinea  – Encapsulated by NGC as PF65

1/ This stunning proof encompasses all the characteristics of a coin that is in the highest state of preservation, extremely rare and has been graded by NGC as Proof 65.

Condition – being a proof the quality should always be exemplary, the fields are mirrored, the portrait and shield on the reverse all completely fully struck up without a hint of wear.

Rarity – this coin has been given a rarity of R4, only 11-20 examples known. In reality this 1727 first year George II guinea is likely to be far rarer. We can only find one other example selling at auction in the last 20 years. An inferior example, NGC Proof 64 selling for a total of £45,600 back in 2017.

Third Party Grading – at Proof 65 this is the finest certified by a third party grader. 65 is an exceptionally high grade and due to the rarity of this coin is never likely to be bettered.

In summary, this coin ticks all the boxes where condition, rarity and third party grading is concerned. It is the perfect choice for an investor-collector. With a PF64 fetching £45,600 six years ago, with the significant price increases and current trends, one would expect this coin to be worth nearer £100,000.

1645 Charles I Silver Three Shillings Struck during the Siege of Carlisle.

2/ A true, academic rarity and filled with historical importance, this impressive silver coin captures a time when the soldiers were under siege during the English Civil war.  With the only source of silver being plate and other flatware in the castle, these coins were struck under in emergency conditions during the siege in order to pay the defenders, that they would continue to fight on.

Condition – due to the hasty and makeshift nature in which these were struck, no high grade examples exist. This example is typical to how they turn up. The important aspects of the coin are visible, the date and also the denomination III (three shillings).

Rarity – the three shillings being the larger denomination struck in Carlisle was produced in far smaller numbers. It is believed that less than 10 examples exist, making it excessively rare.

Third Party Grading – due to the poor strike of these coins, although an extreme rarity, there would be little reason to have this coin third party graded as the numbered grade achieved would simply not be high enough. Although this example is about as good as they turn up.

In summary this coin is truly an academic rarity, the fascinating and compelling story of the Civil war and Carlisle being under siege will always make this an extremely desirable coin. The fact that it has not and would not benefit being graded by a third party grader means that this great rarity has not really increased in value over the last twenty years. This is a coin that has great potential in the future and is somewhat undervalued due to the hype of the third party grading.

Henry VII Sovereign of Twenty Shillings

3/ The Henry VII sovereign was the first sovereign ever produced and this series of sovereigns, especially the later milled issues, are one of the most widely collected series of coins. With the sovereign’s historical importance and still widely used today in the world of gold bullion, there is little wonder why the sovereign is an extremely popular choice for collectors and investors of gold.

Condition – having been struck by hand and in a metal as notoriously soft as gold – they are more prone to wear, Henry VII sovereigns rarely turn up in pleasing condition due to the very nature of their extreme rarity. This is a superb example, unusually well struck, the obverse detail spectacular, boasting the full likeness of the king’s portrait. One of the strongest examples available for commerce.

Rarity – being the first ever sovereigns to be struck they were issued in very limited numbers. Very few examples have survived today and those that still exist are usually very poorly and crudely struck.

Third Party Grading – it is unlikely that this example would receive a numerical grade due to some very minor scratches that are only visible under close inspection.

In essence this truly iconic and widely sought-after coin – ‘The very first gold sovereign ever produced’ , visually stunning and extremely rare. The 2023 catalogue in VF for this coin is £165,000. This coin, due its strike and well struck portrait, catapults it into the category of one of the finest known examples. However, because of the very light scratches (only visible under close inspection) and the fact that it won’t receive a numerical grade from a third party grader, the price of this example is far, far less. In 2010 a similar example without the light scratches realized £186,000 including premium. In today’s coin market one would expect this coin to sell for nearer £300,000 or more. Therefore, the example with the light scratches seems particularly good value at around half the price.

It seems only fitting to end this article on the impacts of third party grading. Whether you are pro third party grading or against it, it has made a colossal impact in the coin world. With the difference between one point on the grade potentially having a difference of 1000’s or even 10,000’s of pounds, it is always going to be the subject of much debate and controversy.

The three coins I have mentioned show the difference that the  impact third party grading has. The proof guinea is the finest known graded and should always reach maximum potential. The Carlisle siege three shillings, all examples poorly struck, the number it would receive will make little difference to the price.

The Henry VII sovereign is the point I wish to raise in this article. Any coin deemed to have a problem by the third party graders (ie. one that comes back as ‘details’) suddenly becomes far less valuable and harder to sell – notwithstanding the fact that this coin happens to be extremely rare with a defect so minor that it would still be one of the finest known examples!

To put this into prospective, 20 years ago a choice five guinea piece would be priced for example at £10,000. If there was another in similar condition (same date and type) but it had a light scratch on the reverse the price would be a little less, maybe £9,000. As long as the coin was well struck and still had good eye appeal, a small scratch that was barely noticeable would not matter and it would still be regarded as one of the finest known examples. In today’s coin market, with third party grading, the same two coins today might be say ‘MS63’ and the one with the slight scratch ‘Unc Details’. The difference in price would now be astronomical. The ‘MS63’ £150,000 – £200,000. The ‘Unc Details’ worth perhaps only £30,000 – £40,000. The huge discrepancy in price is not justified for a coin that 20 years ago would have taken pride in a top collector’s collection and despite the light scratch, was still one of the finest known.

My point here is not whether a coin has been incorrectly called ‘cleaned’ when it hasn’t, or other such inconsistencies in third party grading, but that the current system with coins that have slight issues is completely flawed. This is true in all denominations, hammered or milled.  A coin that would have been accepted 20 years ago as one of the finest known, such as the Henry VII Sovereign in my article should still be an extremely sought after example despite the light scratches.

Surely, it would be prudent still to assign these coins numerical grades but given a lower number on the basis of the severity of the issue.  Alternatively, perhaps give the number of what the coin would have achieved but note the issue, for example ‘AU58 light scratches’ – as also suggested by a good friend in the coin trade.

Sooner or later these issues will hopefully be addressed and the balance in prices will be restored. High grade, rare examples being recognised for their quality, not for some minor defect, hugely emphasised on a superb coin with the attribution of ‘Details’. 

Email me if you have any queries – neil@baldwin.co.uk

Neil Paisley 

Managing Director