Coin sellers rate gold coins for their appearance on a scale developed in the 1940s by Dr. William Sheldon. Before Sheldon’s Scale came into being, coins were graded on a range having only a few numbers, but Sheldon expanded the range to span numbers 1 to 70. While the broad array of grades can be frustrating to new collectors, it is appreciated by those more seasoned in the hobby. The wider scale of numbers enables experts to distinguish fine differences in quality that were not recordable in the earlier less complex grading system.
Coin dealers assign each gold coin a grade based on five factors: strike, surface preservation, luster, coloration, and eye appeal.
Strike refers to the clarity of the images and writing on a coin – how precise the relief is. The boundaries are clearer on some gold coins and blurrier on others. The clearer and sharper the relief, the higher the grade is, and the more valuable the coin to collectors.
Surface preservation has to do with the number and placement of dings, scratches and other marring marks on the face or reverse side of a coin. A scratch located on the face loses more points than the same scratch appearing on the back side, and a flaw that shows up in the focal point of an image earns worse marks than a flaw appearing in a less conspicuous place.
Luster is considered in grading, because breaks in luster occur due to cleaning or wear. It is not a good idea to clean a gold coin unless you have been trained in how to do it. Cleaning can actually remove part of the “skin,” decreasing the coin’s value by spoiling its natural luster.
Coloration (the fourth grading factor) depends on the type of alloy mixed with the gold to harden it. Which coloration is preferable is a matter of taste, but most coin dealers give higher points to coloration that is natural (that has not been tampered with through chemicals or cleaning).
The fifth grading factor, eye appeal, is the sum total of the other four factors. It’s a number that reflects the overall beauty of the coin.