When it comes to the differences between, the slightly circulated (almost uncirculated) or AU58 and just-made-it (mint state) or MS60 Morgan Dollars, it's often in the eyes of the beholder. The differences between the two grades is so small that it's become one of the most misrepresented and often "cluttered" areas of coin grading.
Sometimes it's obvious a coin has attained the smallest amount of circulation from handling, but other times it's not as obvious. So how do you discern the difference when it's not obvious? Do you look at the type and the amount of contact marks, the color or toning aspects or is it just the over-all look of the coin?
It's not an easy answer and while the above aspects play a huge part in the process of grading an AU58 it's not the end-all for the grade. If you have experience in grading coins then circulation means wear from handling the coin, and wear signifies a slight loss of metal or original luster, and we mean slight and only on the highest points of the design when it comes to AU58.
However, there's times when the appearance of wear can be mistaken as just weakly struck high points or high points that have been smashed while the coins where stacked, rolled or lay in mint bags, on top of each other for years from being stored in mint vaults and banks. And this is where the problems arise when buying Morgan Dollars.
One person's AU58 might be another person's MS60 or even higher and it's not just collectors that can make this mistake but dealers can to. Also, some unscrupulous sellers or dealers might just tout a coin as MS when it's actually AU, and this is because some dates are extremely rare in MS grades. In example, the 1884-S Morgan Dollar graded AU55 by PCGS (Professional Coin Grading Service) is valued at around $625, and AU58 is around $1,500, and MS60 is around $8,000!
As you can see, for each grade, the value increases dramatically, and this has caused raw coin sellers to see only dollar signs and one reason to never buy raw coins without a lot of research and experience. It's a fact that there's not much difference between AU58 and MS60 and even the top grading companies can get it wrong, so can anybody. So it's not just raw coin sellers or unscrupulous sellers to watch out for since some already certified and graded coins just might be over or under a point or two as well.
It's one reason people have turned to the CAC (Certified Acceptance Corporation) to place a sticker on an already certified coin, grading the grading services grade. However, CAC doesn't do anything with coins that they feel are under-graded, so this isn't a solution either. But don't despair since out of several hundred MS60 graded Morgan Dollars you are unlikely to find more than a couple that actually would down-grade to AU58, it's just some words of caution on the matter and I am not trying to ruin reputations or expectations of any reputable dealer or grading service.
Of course I could keep adding more an more details, examples and arguments, but let's just cut to the chase and examine some images of AU58 and MS60 coins. We can't 100% grade a coin from images but these images are huge and can give you a better idea and further your understanding of these two grades. You can click on any image in this guide and see a larger file for better detail.