Collecting coins or investing in bullion is one of the most secure ways to protect and develop your financial portfolio. The fluctuation of paper currency is highly unpredictable, which is why so many people are looking for stability in precious metals.
However, before you invest in precious metals, it is a good idea to do your homework. The technical jargon of coin collecting and trading can be confusing to the novice investor, so here are 10 coin collecting terms you are bound to come across when buying coins and bullion.
Actual Metal Weight
A coin’s Actual Metal Weight (AMW) is configured by multiplying its total weight in Troy ounces (see below). Actual Gold Weight (AGW) and Actual Silver Weight (ASW) are more detailed terms which identify the coin’s type of metal.
AMW is important in determining how much of the coin is actually composed of a particular metal, rather than mixed with alloy. For instance, if a gold coin weighs 3.5 Troy ounces, but has a fineness of 80% (0.8), then the AGW would be calculated by multiplying 3.5 by 0.8, for a total of 2.8 Troy ounces.
Alloy
When two or more metals are combined, it is referred to as an alloy. Except for the few coins that have a 99.9% fineness or better, most coins available are alloys. Alloys are used to provide strength in a coin, since mixing metals tends to make them stronger than pure metals.
The penny is a common example of an alloy. Although most people would say it is made of copper, 97.5% of a penny is composed of zinc. Even rare collector’s coins, like the American Gold Eagle mint, can be alloys.
Bullion
Uncoined precious metal, such as gold, silver, platinum, and palladium, that are in the form of bars, plates, or ingots are referred to as bullion. Bullion is not affected by government economics like coins, and there is no monetary value assigned to them by a governmental institution. Instead, their primary value is determined by the fineness, purity, and weight of the bullion.
Certified Coin
A coin that has been certified means that it has received authentication by a third-party professional service. Certified coins generally have higher premiums, because buyers have assurance that the coin is authentic and not a look alike.
Sometimes specific mints of coins sell for much higher, like the American Eagle silver bullion coin in Mint State 70 condition, which can bring in a profit of up to 4 times higher than the actual silver bullion value.
Field
The field of a coin simply refers to the background of the coin’s face, or the part without lettering, reliefs, or designs.
Mintmark
If you find a small letter on a coin, that would be the mintmark. The mintmark identifies the specific mint where the coin was struck.
Obverse
The obverse part of a coin refers to its front face. The back of the coin is called the reverse.
Proofs
Proofs are coins that are not intended for public circulation. Proof coins are generally made solely for collectors, special occasions, or numismatic purposes, and have specialized dies and planchets.
Relief
Rather than engrave a design onto the face of a coin, most coins have reliefs. A relief is when the design is slightly raised from the coin’s surface. An example of a relief sculpture is Mount Rushmore, which is America’s most famous, and largest, relief.
Troy Ounces
Coin collectors use a unit of measurement known as Troy ounces to gauge the mass of precious metals. A troy ounce weighs slightly more than a regular ounce (called an avoirdupois ounce), and is derived from Ancient Roman measurement systems. Troy ounces are used instead of avoirdupois ounces in order to maintain standards of purity and common measurement across time.
A majority of financial advisors will tell you that investing in precious metals like silver and gold coins is the best way to provide security and growth to your financial portfolio. But, before you jump into coin collecting, it is essential that you know the jargon.
Source by Patrick T Langley
10 Coin Collecting Terms You Need to Know
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