Demystifying AU and BU: A Comprehensive Guide to Coin Grading Terms

Coin collecting is a hobby steeped in history, art, and economics. At the heart of numismatics is the concept of coin grading – assessing the condition and assigning a numerical grade to a coin. For collectors, understanding grading is essential to building a valuable and desirable collection. Two of the most common and important terms in the world of coin grading are "AU" and "BU".

In this comprehensive guide, we‘ll dive deep into the meaning of these designations, explore the differences between AU and BU coins, and provide expert tips for collectors looking to make smart buying decisions. Whether you‘re just getting started in the hobby or a seasoned collector, this article will equip you with the knowledge you need to navigate the marketplace and build a top-notch collection. Let‘s get started!

The Evolution of Coin Grading Standards

To fully understand the significance of AU and BU grades, it‘s helpful to look at the history and development of coin grading standards. In the early days of the hobby, coins were described using subjective terms like "good", "fine", and "uncirculated". There was no uniform standard, leading to inconsistencies and confusion in the marketplace.

In the 1940s, a groundbreaking system was developed by Dr. William Sheldon, a renowned numismatist. The Sheldon Scale, as it came to be known, assigned numerical grades from 1 to 70 based on a coin‘s condition. This was a major leap forward in standardization and laid the groundwork for the grading system we use today.

Over time, the Sheldon Scale was refined and adapted by grading services like PCGS and NGC, who established clear criteria for each numeric grade. The industry also shifted away from using terms like "BU" in favor of the more precise "Mint State" grades. However, the concepts of "About Uncirculated" and "Brilliant Uncirculated" endured.

Here are some key dates in the history of coin grading:

  • 1869: The American Numismatic and Archaeological Society is founded, setting the stage for organized coin collecting in the US.
  • 1949: Dr. William Sheldon publishes his landmark book "Penny Whimsy", introducing the 1-70 grading scale.
  • 1972: The American Numismatic Association Certification Service (ANACS) begins authenticating and grading coins, though not using the Sheldon scale.
  • 1986: PCGS is founded, becoming the first major third-party grading service to use the Sheldon scale in encapsulated holders.
  • 1987: NGC is established, providing competition and further standardizing grading practices.

Today, coin grading is a complex and nuanced field, with a host of specialized terminology. But at its core, the goal is the same as it was in Sheldon‘s day – to accurately and consistently describe the condition of a coin. With that foundation in mind, let‘s take a closer look at the AU and BU grades.

The Nitty Gritty of AU Coins

An "About Uncirculated" or AU coin is one that has only the slightest traces of wear on the highest points of the design. To the naked eye, it may look very similar to a Mint State coin. But under magnification, you‘ll be able to detect small patches of worn metal on the most vulnerable areas like the cheek of a portrait or the crest of an eagle‘s breast feathers.

AU coins fall into the higher end of the circulated grades, below Mint State but above Extremely Fine (EF). Because of their excellent state of preservation and near-pristine appearance, AU coins are highly desirable for collectors.

Within the AU grade, there are several sub-categories used to indicate the precise amount of wear:

  • AU-50: Traces of light wear on over half of the high points. Luster may be slightly impaired.
  • AU-53: Very slight traces of wear on high points. Most of the mint luster is still intact.
  • AU-55: Slight traces of wear on just the highest points. Nearly complete mint luster.
  • AU-58: Minimal traces of wear visible only upon close inspection. Luster is virtually complete.

As you move up the AU scale, the value and eye appeal of a coin increases. According to the PCGS Price Guide, here are some representative values for popular series in AU grades:

Coin AU-50 AU-53 AU-55 AU-58
1880-S Morgan Dollar $45 $55 $70 $95
1909-S VDB Lincoln Cent $600 $675 $825 $1,100
1907 $20 High Relief Saint-Gaudens $18,500 $19,000 $20,000 $22,000

As you can see, even a few points on the AU scale can translate to significant differences in price, especially for key dates and rarities. For collectors, an AU coin offers the chance to own a high-quality, visually appealing example at a more affordable price point than a Mint State piece.

The Beauty of BU/Mint State Coins

In contrast to AU coins with their traces of wear, a "Brilliant Uncirculated" or BU coin has absolutely no signs of circulation wear. These coins appear exactly as they did when they left the mint, with full original luster, sharp strike detail, and pristine surfaces.

While the term "BU" is still used by some collectors and dealers, the industry has largely moved towards using the more specific "Mint State" or MS grades. Mint State coins are graded on the Sheldon 1-70 scale, with 60 being the lowest uncirculated grade and 70 being perfect.

The primary determining factors in a Mint State coin‘s grade are luster, contact marks, hairlines, and overall eye appeal. Here‘s a brief rundown of the 11 Mint State grades:

  • MS-60: No wear, but may show numerous heavy marks, spotted surfaces, or poor strike.
  • MS-61: No wear, slightly better overall quality than MS-60 with fewer marks.
  • MS-62: No wear, average luster, strike, and eye appeal for the type.
  • MS-63: No wear, above average strike and eye appeal. Scattered light marks.
  • MS-64: No wear, strong luster and eye appeal. A few small scattered marks.
  • MS-65: Full original luster with minimal marks and blemishes. High eye appeal.
  • MS-66: Exceptionally attractive with very few marks. Near-perfect luster and strike.
  • MS-67: Close to flawless, but may have up to three minor imperfections.
  • MS-68: Virtually flawless with minuscule imperfections visible only under 5x magnification.
  • MS-69: Nearly perfect with only one or two tiny flaws visible under 5x magnification.
  • MS-70: The ultimate grade, with pristine surfaces, full original luster, and no post-production imperfections at 5x magnification.

Achieving grades of MS-67 to MS-70 is incredibly difficult and rare. Most collectors will primarily deal with coins in the MS-60 to MS-66 range, where a single grading point can make a huge difference in value. For example:

Coin MS-63 MS-64 MS-65 MS-66
1881-S Morgan Dollar $60 $85 $160 $325
1937-D 3 Legged Buffalo Nickel $350 $750 $2,000 $4,500
1916 Standing Liberty Quarter $4,250 $5,500 $16,500 $32,500

Clearly, Mint State coins in the higher numeric grades command serious premiums over "low end" uncirculated examples. For registry set collectors and connoisseurs, only the best of the best will do. But for most collectors, a nice MS-63 to MS-65 coin offers excellent bang for the buck in terms of quality and eye appeal.

AU vs BU: Key Considerations for Collectors

So which is the better choice for your collecting goals – AU or BU/Mint State coins? The answer depends on a variety of factors, including your budget, the specific series you‘re collecting, and your personal preferences.

One major consideration is rarity and availability. For some key dates and condition rarities, a high-end AU coin may be the best you can realistically hope to acquire. Mint State examples of certain issues are simply out of reach due to their extreme scarcity. An AU-55 or AU-58 coin can make an excellent and desirable substitute in these cases.

On the other hand, if you‘re building a registry set or want the ultimate in quality and eye appeal, then Mint State coins are the way to go. This is especially true for common date issues where high grade examples are plentiful. In many series, collectors will "split the grade" – opting for Mint State examples of regular issues and AU pieces for better dates.

Another important factor is value and liquidity. In general, Mint State coins have shown the strongest and most consistent price appreciation over time, particularly in grades of MS-65 and above. High-end certified coins are always in demand among serious collectors and investors. However, nice AU coins can also be excellent stores of value, as they are far scarcer than their circulated counterparts.

Ultimately, the most important consideration is your own collecting goals and preferences. If you love the look of frosty, blast white coins with no wear at all, then Mint State is the way to go. If you prefer the added character and affordability of lightly circulated pieces, then AU coins may be more your speed. Many collectors end up with a mix of both in their collections.

Tips for Buying High Quality AU and BU Coins

Regardless of whether you‘re buying AU or Mint State coins, you‘ll want to keep these expert tips in mind to get the most for your money:

  1. Stick with PCGS and NGC. These two grading services have the strongest reputation and most consistent standards. Their certified holders and labels carry the most weight in the marketplace.

  2. Buy the best coin you can afford. This is the number one rule for all collectors. A high-end AU coin is a better value than a low-end "slider" Mint State piece. Whenever possible, go for quality over quantity.

  3. Focus on eye appeal. Luster, toning, strike, and overall visual impact can vary widely within the same technical grade. Use high resolution images to evaluate a coin‘s eye appeal before making a purchase.

  4. Understand pricing nuances. Certified coins graded by PCGS and NGC carry substantial premiums over "raw" (ungraded) coins. Pieces with special designations like "Full Bands" or "Red" can also command higher prices.

  5. Consider CAC. CAC (Certified Acceptance Corporation) is a company that places a green bean-shaped sticker on PCGS and NGC slabs for coins that meet their strict quality standards within the grade. CAC coins are highly liquid and desirable.

  6. Learn to grade. While you‘ll still want to buy certified coins, developing your grading eye through books, online resources, and in-person viewing will help you determine if a coin is "high-end" for the grade or if a raw coin has grading potential.

With these tips in mind, you‘ll be well equipped to build an exceptional collection of AU and Mint State coins that will be the envy of fellow collectors and a source of pride and satisfaction for years to come.

Conclusion

In the end, the choice between AU and BU/Mint State coins is a highly personal one that depends on your collecting goals, budget, and preferences. Both types of coins have their merits and can be rewarding to collect in their own ways.

The key is to arm yourself with knowledge about grading standards, rarity, values, and the specific series you‘re pursuing. By understanding the nuances of AU and BU coins and working with reputable dealers and grading services, you‘ll be able to assemble a top-notch collection that brings you joy and holds its value over time.

As you explore the rich world of numismatics, always remember that collecting is about the thrill of the hunt, the allure of holding history in your hands, and the satisfaction of building something meaningful and valuable. Whether you‘re drawn to the character of AU coins or the majesty of high-grade Mint State pieces, stay true to your own vision and have fun!

Happy collecting!

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