In coin collecting, the numerical grade of a coin can be a vital factor in determining its value. However, there is a huge difference in the importance of grading between precious metal coins for the investor market and precious metal coins for the collectible market.
To state it in the simplest terms, the condition of a bullion coin is not a factor in the investor market. It's all about the precious metal itself. A coin is silver, gold, or platinum...or it's not. The value is based entirely on its precious metal content, not its numerical grade. Essentially, it's irrelevant whether a coin is in pristine condition or not.
For example, the Gold Eagle and Silver Eagle bullion coins from the U.S. Mint are made for the investor market. Gold coins are struck in one-ounce, half-ounce, quarter-ounce, and tenth-ounce sizes, while the silver coin is made only in the one-ounce size. The value of each coin is based solely on its amount of gold or silver.
In the collectible market, a coin's condition or numerical grade is extremely important. A general rule of thumb is the higher the grade, the rarer and more valuable the coin.
The quality - and therefore the value - of a collector coin is comparable to the diamond market. A low grade diamond will always be worth much less than a D Flawless diamond. In almost any collectible market, you will see a similar focus on quality. In the case of the Gold Eagle and Silver Eagle bullion coins, collectors eagerly search out coins in higher grades. Certified coins in high grades are no longer purely "investor" coins, but become "collector" coins instead.
For example, a 1996 Silver Eagle contains one ounce of silver, but on the collector market it's valued at $4,940 in perfect MS70 condition. That figure is not based just on the silver bullion value, but due to the fact that only a handful of coins have been certified as MS70. The coin's value is therefore based on its condition and rarity, not only its silver content.
The rarity and quality of a coin can make the difference between a coin that might be worth a few dollars for its metal value, and the same coin in superb condition that could be worth tens of thousands of dollars. A silver or gold coin for the investor market will never experience that magnitude of value increase. The type of coins you purchase will depend, in part, on whether you are an investor or a collector.