Simply go over the surface of the coin with the pencil and rub it in with your finger. It gives the coin a shiny surface and if you angle it to the light the slightest detail will stand out really well.
Pencils come in various degrees of hardness and a softer lead seems to work better, so I'd suggest HB or softer.
The beauty of this method is that no damage is done and you can remove the lead coating easily if you want to return the coin to its original look
