Even though for most people, value and price are synonyms, in reality they refer to two different things. To be more precise, the price – or retail price as it’s known to coin collectors – signifies the sum of cash you pay the dealer when you purchase the coin. On the other hand, the value is also dubbed wholesale price and entails the total amount a dealer would pay to purchase the coin from you.

Because the coin market is intrinsic and complex, it’s understandable why the price and value of a coin are affected by numerous factors. Following are the five factors that weigh the most.

Mintage

Perhaps the biggest influence on a coin’s price and value is the supply of the coinage in a particular grade. The aforementioned supply is directly determined by the initial mintage of the currency. In most cases, the mint withdraws the coin from the market at the end of the year and destroys it. What this means is that collectors can determine the supply of a certain coin only at the end of each year. On a side note, the same rule doesn’t apply to re-strikes, which means using special dies to strike coins of an earlier date for collectors.

Melt value

In case the coinage is made of a precious metal – usually gold or silver – the currency also gets an intrinsic value. Such coins were widely available until 1965, date after which the United States traded gold and silver for more affordable metals like nickel, copper or an alloy of the two. Therefore, the coins minted until 1964 will experience price and value rises and falls according to the price fluctuations of gold and respectively, silver.

Grade or condition

Numismatists prefer to invest in coinage that is in pristine condition or uncirculated. For the coins to be uncirculated, someone had to remove them from circulation very early and store them safely. The scarcer the practice of removing coins from circulation, the higher the value of the coinage. For example, an uncirculated coin dating from the mid-1800s is worth substantially more than a similar coin from the 1930s and 1950s, when these practices were commonplace.

Demand

While there are numerous factors that affect the demand for a particular coinage, in general it all boils down to the effectiveness of the promoter’s marketing campaigns. For instance, the $50 reward promised by popular coin dealer B. Max Mehl during the Great Depression determined numerous US citizens to start collecting coins hoping to run across the sought-after 1913 Liberty Head Nickel. Nowadays, the Liberty Head Nickel of 1913 is one of the most valuable coins in the world and experts claim that only 5 specimens are confirmed to exist.

Dealer’s stock

The price and value of a coin is also determined by the inventory a particular dealer has on hand. For instance, if a coin dealer has several Lincoln cents in his inventory, he would have to slash the price in order to sell them all. This rule applies irrespective of the condition of the coinage.