Exchange rates of private issue gold and silver coins are, and can only be established by the open marketplace, and this is ideal. The goods or services merchants active in trade determine a particular coin can be exchanged for is the sole governing factor. Their judgment is final and just, and there exists no court of appeal. Any outside mandatory influence to “regulate” the exchange rate of a private gold or silver coin will inhibit and put at a disadvantage the trader who offers that breed of coin to settle a transaction. This is the markets way of judging any encroachment into the liberties of open exchange. As naturally as a river discovers the path of least resistance to its objective, private issue gold and silver coins, care not for resistance. There are therefore, a number of factors that grant preference to one breed of open exchange coin over another, and esteem them as more value-able.
The reputation and integrity of the issuer of the coin is the number one consideration. This is clearly the obvious starting point for value. Reputation can grant a coin a goodly margin beyond the spot price of its precious metal content as one can confidently rely on the coins stated weight and purity.
The marketplace over time has observed and established criteria and processes that add value to open exchange gold or silver coins and has rewarded the “good coin” with its cherished margin beyond the value of its metal content. Of importance here is the ease of exchange offered by a particular breed of coin; that is the handiness of the coin(s) weight denominations that make for convenient trades and for change to be given easily.
Another important “margin add” is the durability of the coin. To this end some issuers have opted for 22 karat gold coins and sterling silver coins while others have mastered and utilize “annealing” to bolster the hardness of their .999 precious metal coins.
Theft is always an issue where valuables exist and most precious metal coins today employ “anti-shaving” measures. These are seen as a milled or “serrated” edge on a coin that prohibits the “unnoticed” scraping of the coin to remove a small portion of the gold or silver.
Some exotic private issue gold coins/medallions today posses anti-counterfeit measures, such as a bonded “kinogram,” or DNA impregnation, which can “margin add” to high worth large coins.
International recognition and acceptability via an established trademark or hallmark is also important particularly for non-domestic trade, as is the esteem one holds for any significant symbol, artwork or script struck on a coin.
Coins that denote religious significance may also hold advantage against confiscation in countries that advocate religious mastprotections.
These are clearly factors that can justify “margin add” on open exchange private issued bullion coins. With these considerations taken into account, knowledge of the spot price of the gold or silver content of the coin stands as the remaining value to be considered.
Gold and Silver coins generally trade at a margin over the spot price of their respective bullion content. Although “spot price” is determined in effect by a continuous international “auction” as the world turns, four additional costs can arise that potentially add to the margin over spot of any given coin. They are the “refining fee” charged by the refinery who provide the granules or bars of gold or silver, the cost of creating the coin (artwork, dies, striking), the cost of transporting the coin from Mint to market, and the reward to the coordinator who advocates and facilitates the coins entry into circulation.
Ultimately though, all the above “considerations” find common ground in the melting pot of the open market, which alone will conclude the acceptable margin above or below the spot price of gold or silver for any open exchange bullion coin that dares to volunteer its service.