Anatomy of a Coin: Eight Terms to Know

As gold becomes a more popular investment vehicle, many would-be investors are starting to explore the value of gold coins as part of their portfolios.

One common approach is to buy gold and silver bars from gold IRA companies as part of a gold IRA package, but the appeal of gold coins for many investors is that they offer a point of entry into a very new world, or they can complement existing coin collections and offer unique or additional benefits.

If you’re one of those investors who’s interested in gold coins, though, you need to do some homework on the terminology. What follows is a rundown of eight terms that apply to coins that will help you understand the specifics of how they’re made and described.

coin terms

1. Alloy

This one is common knowledge for most people, but if you’re not familiar, it means a coin is composed of two or more metals. When it comes to investing, the most common types of coins you’ll be dealing with are gold, silver and copper, and platinum is another common metal in which people invest.

2. Die

The die plays a major role in the design of any specific coin. It’s basically an engraved stamp that’s used to impress a design onto a blank piece of metal.

The designs usually consist of images, mottoes or something pertaining to the specific value of the coin. In the US, all coins are made using a pair of dies, and they’re used as part of a machine called a coining press.

3. Coin Filler

One of the tactics used in manufacturing coins is to fill in a spot in a collection on a temporary basis. This is done as a placeholder until a higher-quality coin can be plugged into the collection, and some collectors will actually use damaged or low-grade coins until the better replacement is secure and ready to be plugged into the collection.

4. Incuse

This technical term is actually part of the coin design, and it refers to the part of the design that’s pressed into the surface of the coin. It’s more or less the opposite of “relief,” which refers to a design that’s raised above the surface of the coin. In the US, most coins are made using bas-relief, which indicates that the designs are raised just above the flat, level surface of the coin.

5. Obverse

This technical term refers to the front side of the coin, which is otherwise known as “heads” in common parlance. This part of the coin typically contains the date when the coin was made and minted, along with the mint mark , if appropriate, and the main design.

Sometimes the main design is a portrait, while other times it may be a motto, something indicating the value, or a specific image. The opposite side, of course, is the reverse side, and there is no technical term for his.

6. Relief

This term is the opposite of inverse. It refuses to the part of the design that’s raised above the surface, although it’s usually described as bas relief in the US.

7. Tone

This term is a descriptor used to specify the color or hue of a coin as it ages. Specifically, the combination of sulfur, oxygen and other elements will change the appearance of the coin’s metal over time.

Sometimes the tone is used to provide a guideline about the quality of the coin. In this context, the most common usage pertains to silver and copper coins, and one of the things that makes gold coins so valuable is that they are the least vulnerable to toning and the altered shades it produces.

8. Type Set

This term pertains to the denomination of a specific coin collection. There are many different examples of this, but one of the most commonly-cited ones is a nickel type set. The US Mint has produced four different types of nickels over the history of that particular coin, so each of these would be included in a typical nickel type set.

Most collections also include all of the dates of the coins in a typical series. The most commonly mentioned collections in which this is the case include the Lincoln set of pennies, or the state quarters collection that is appealing to many who enjoy that particular coin type..

There are many other terms, but these are the basics. If you’re looking into gold investment, they’ll help you understand the history of gold coins if you happen to be interested in those as your primary vehicle.