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Archive for April, 2010

The Sheldon Scale of Coin Grading

Monday, April 12th, 2010

The Sheldon Scale of coin grading was developed by Dr. William Sheldon, an American born in Rhone Island in 1898. He was a psychologist and numismatist. His coin collections were copper coins which were large cents. These coins became models for a system of grading which he decided to develop.

The system he developed is now in use today, particularly by the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC).It uses a scale of 1-70 The numbers 1-59 are used for grading gold coins that had been circulated and the numbers 60-70 for gold coins classified as uncirculated.

Before the advent of the Sheldon scale coin grading consisted merely of three descriptions which were broad imprecise: 1) Good: Details visible but surface worn out; 2) Fine: Details less worn out and a bit of mint luster visible; and 3) Uncirculated: Details sharp, luster approaching state of the coin at mint.

The system developed by Sheldon eliminated the guesswork. The lowest grade is Poor-1 or P-1, for a coin that is badly damaged or worn out, the type barely discernable. The highest grade is AU-59 (Choice About Uncirculated), virtually uncirculated except for minor wear marks on high points. .

In between are grades like G-8 (Very Good) for a coin with full rim and clearly discernible devices but coin significantly worn. VF-20 (Very Fine) for a coin with clearly readable but lightly worn legends. XF-40 (Extremely Fine) for a coin whose legends are sharp, devices are clear with slight wear.AU-55 (Good About Uncirculated) for a coin with sharp legends that show only a hint of wear on the high points.

For the uncirculated coins the grades from MS-60 to MS-70 (Mint State coins), as well as the proof designations, are all based primarily on eye appeal, quality of luster and/or toning, and the presence or absence of contact marks, hairlines, etc.

Franklin Gold

Will Gold Ever Run?

Tuesday, April 6th, 2010

Will gold ever run to $2000 or beyond as was the expectation in 2009? We’re into the fourth month of 2010 but gold has not so far behaved the way it was predicted.

As early as February 2009, months before gold posted its record breaking price of $1104 in December, one respected industry leader fearlessly predicted that gold prices would quadruple in 2010 to $3500 from the then current price of $994. Also early in 2009, another industry leader made a more optimistic prediction — $5,000 per ounce by 2010. Many more had expressed optimism for gold in various, though in much sober, degrees in 2010.

The two-week advance of gold prices that accentuated the end of the first quarter of 2010 was accepted by some as a positive sign “…reflecting the general commodities tone, which is bullish.”

But many were of the opposite sentiment. True, the end of the first quarter ended higher but prices were still in the vicinity of the decade-ending number of $1100. They recalled that prices even dipped to a low $1073.85 in January, an indication of gold’s uneasy footing.

“I’m not bullish about these prices,” reacted an industry leader. “Gold is still trading within a narrow range and prices have been propped up by investor interest, not fundamentals…”

Will gold ever runs as predicted? Could it be that it is too early to make a judgment on gold? The year 2010 is an extension of the 2000-2009 bull run and could be just a brief respite before the run is resumed. It will be recalled that the bull run of the 1970s started slowly from $34.94, reached $50 only two years later before it finally settled at $594.92 in December 1980.
Franklin Gold