There is no doubt that the value of a coin is of utmost importance when it comes to coin collecting. Coin collection values is the basis of the entire hobby and so is important when collectors are looking to buy or sell their collection. So it is not a big jump to say that the biggest mistake a coin collector can make is to misjudge the value of a coin.

So how can you avoid this mistake? To answer this you need to realize what goes into determining the value of the coin; there are four main factors to consider:

1) The Condition of the Coin - Also Known as Grade

The biggest factor which decides coin collection values is the grade (or condition) of the coin. It is of no significance how precious a coin is if there are scratches, worn out inscriptions and discolorations because these will considerably reduce the coins value. So the first thing a collector should do is inspect the general condition of the coin. Collectors need to realize that if they are looking a coin with unrecognizable inscriptions and many scratches, they are probably looking at a counterfeit coin. But it takes a more experienced collector to identify those coins from ancient eras where it is reasonable for them to be scratched or worn out. I recommend that novices go to experienced dealers in order to establish the value of that coin.

2) The Rarity factor

The next factor to consider is how rare it is - it is safe to say that older coins are more valuable than recent ones. But you cannot judge this on first look - if a coin is worn out you cannot superficially say that it is old and therefore more valuable because you may be looking at a counterfeit. Alternatively you may be looking at a real coin thinking it is a fake coin! It is only through research and the use of specialist equipment that you can truly identify the coins rarity. Even a simple magnifying glass can go a long way to establish a coin collections value. If you can correctly identify the rarity factor you can make thousands of dollars!

3) Bullion Value

A sometimes overlooked factor is the value of the metal used in producing the coin - this is known as the bullion value. But coin collectors must realize that this is a crucial factor in determining coin value because gold and silver prices are rising to all time highs - if a coin contains enough of a rare metal this can push the value of the coin higher. Obviously gold and silver are no longer made to produce coins so they are harder to find (and therefore of more value).

4) The Laws of Demand and supply

And last but certainly not least is the law of supply and demand. Simply put, the more rare a coin is, the more collectors which are seeking to add it to their collection. This pushes the price up until the supply of that coin can support the demand for it. Conversely, even a vintage coin can have little value if it is readily available.