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coin collecting

The value of a coin may often depend less on the metal value but on its availability and particularly its rarity. Generally speaking, the smaller the number of coins that are available and the higher the demand, the more attractive the coin will be to a prospective buyer.

There are some important points that a collector should bear in mind, however, particularly in relation to a coin’s potential to increase in value should it be low in mintage and in major demand.

  • Coins used for everyday payments are usually minted in the quantities needed for circulation. Coins contain a year date of when they are minted and once the year has ended there is usually a number published. These quantities are often very high, as there have to be enough coins available for circulation.

  • Coins that are minted for commemorative purposes are decided by the government and issued according to a legal framework. This will include all the details of the planned coin including the metal, the face value, the motif and the quantity. Coin laws of this kind are signed by the highest authorities – in the United States, for example, the President authorises each coin issue. Once the authorised quantity is struck, it is strictly forbidden to make any more, even if demand for the coin exceeds supply.

  • When the whole quantity minted is sold out, normally a secondary market develops in which collectors and dealers who are still searching for these coins will pay more than the original issue price. This is how coins can increase in value over time.

  • Because the government guarantees the value of coins, it will ensure that no more coins are minted than are authorised. Often the tools used to mint the coin will be destroyed or kept in safe places so that no one is able to mint more.

  • When coins are older it is often difficult to exactly find out how many of these coins are still available. There have been phases in history where gold and silver have been so sought after - at times of war, for instance - that coins have been melted for their precious metal content and the need to recycle the metal. This reduces the number of coins available and may make a particular coin or a specific year of issue much rarer.

  • The small mintages issued by smaller nations (in the British Commonwealth, for example) can create particular demand among collectors.