Supply and demand are the two most important factors in any economic principle, and this is no different with the collecting or trading of coins. The basic principle is that if a coin is in great demand but short supply the price will be much higher, and conversely if there is very little demand and a large coin supply the price should be significantly lower. There are several factors that you should consider when valuing a coin but all of them basically boil down to supply and demand. Consider a marketplace economy. If there is only one product for sale and five people want to buy it then the trader can hike the price of the product until only one person is willing to purchase. If there are five products and only one purchaser then traders will need to lower the price of their goods until they have the lowest price of the five.
Availability
The number of any particular coin that is available for purchase at any time is going to be one of the most important factors that determine the value. This is basic coin supply. The fewer there are the more value will be attributed to the coin in question. Some coins were created in tens of millions while others only exist in their thousands or less. Error coins are a good example of this. Error coins aren't expensive just because they have a mistake on them. Often when coins were minted with errors on they were recalled and recreated to make a new coin supply. In most cases not all of these coins were recovered and so still exist in their incorrect format. These can be worth a lot of money. Many myths and legends have formed around this theory and you should always do your homework to check and double check any facts.
Precious metal
Recently, coins made from precious metals have risen significantly in value. Investors have moved from trading stocks and shares to invest in commodities like silver and gold. The coin market has been an excellent introduction into this area of investment for many and so the demand of silver and gold coins has risen. As demand has risen so has the price. Many early coins were crafted from silver or gold and so it is important, if you are looking to purchase coins made from precious metals, that you select ones that are a good grade of metal.
Condition
Another important factor, especially to the investor is the condition of the coin. Even coins that were created in their millions had a tendency to get damaged because of the every day use of the coin. This means that finding a near mint condition coin can sometimes be very difficult. The better condition a coin is in the more value it has. Investors know that these coins are rarer and that by purchasing them and storing them correctly they will be even more rare in the future and therefore worth more money.
Age
The age of a coin actually has very little to do with its value. Roman coins are some of the oldest in existence but can be purchased for a few cents because they were created in such large quantities while recent error gold eagle coins are worth a lot of money because there are so few in existence. Again, you have to consider the circulation of the coins. Romans needed to produce so many coins because they used them to pay off mercenaries not to invade their land. They were also used to pay soldiers and mercenaries who fought by their side. These factors combined with the huge expanse of the Roman Empire meant that coin supply was, and still is, massive for most Roman coins. If you can find one that is in superb condition, though, that could be a different story.
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