When someone begins their journey in gold investment, they’re inundated with a wealth of information. This includes terms they’ve likely never heard and bullion options they didn’t know existed. One of the first things they discover, though, is the availability of gold proof coins.
When researching the best gold coins to buy, proof options may not seem that exciting. After all, they contain the same precious metal content and designs as their non-proof counterparts. When you look at the price, though, it’s impossible to not notice the difference. So, what gives?
At Silver Gold Bull, we feel it’s important for every investor to know what they’re getting. Gold proof coins may seem to be nothing more than traditional bullion in collector’s cases, but there’s much more to their value. Understanding this will help you make more informed investment decisions.
What Are Gold Proof Coins?
Whether you’re buying American gold eagles or finishing your 50-state quarter collection, any coin you purchase comes in more than just one type. If you’re looking for the highest-quality offerings available, though, you should focus on proof coins.
This isn’t merely an opinion. The U.S. Mint itself says proof coins are the “finest quality of coin produced.” Gold proof coins are made from special blanks that have been treated, hand-polished and then cleaned before striking. The dies used to strike them are also specially polished.
These coins go through the striking process at least two times. This creates an exceptional finish. Proof coins have a mirror-like background and feature incredible definition. These vary significantly from other coins released by the U.S. Mint:
- Circulating coins: These coins are meant for general circulation. They undergo no special processes and are released in boxes, bags and rolls.
- Uncirculated coins: These are created very similarly to circulation coins, but a special process and blanks are used to produce a more brilliant finish.
- Bullion coins: Most bullion mint offerings are not proof coins. Their precious metal weight dictates their value.
Gold proof coins are what you get when mints combine proof striking processes with bullion blanks. The proof method initially served as a quality-assurance measure for dies, and the first coins off the line typically went into the national archives. Due to collector demand, though, this is no longer the case.
When investing in proof coins, it’s important to remember that “proof” doesn’t indicate the condition of an item. A proof coin can get worn or damaged just like any other coinage. Gold proof coins simply underwent a specialty process to create a unique appearance.
The big question new investors have is whether this makes the coins worth more. The coins certainly take on a more beautiful luster, but does this necessarily increase their value? Could this answer vary based on your investment goals? These are all important thing to consider before buying.
Are Gold Proof Coins Worth More?
If you compare proof coins to their regular strike counterparts, you’ll always find them listed for higher prices. For instance, an American Eagle Proof gold coin will carry a premium around 9% higher than non-proof versions of the same item. You’ll also get a certificate of authenticity and display case.
The real question is if higher prices equate to higher value. After all, the gold content in each coin is the exact same. If you’re investing in precious metals solely for their intrinsic value, gold proof coins may be an added expense you don’t need. There’s no denying, however, that proof strikes are more valuable.
This is largely related to their collectibility factor. Regular strike bullion coins are typically coveted by investors. When selling a proof strike, however, the market is wider thanks to collectors. The mint also produces these coins in lower numbers, so there’s a measure of rarity involved as well.
The value of a gold proof coin can vary like any other investment. If you make direct comparisons, though, it’s apparent that they hold their value. For instance, a top-graded 2006 American Gold Eagle proof coin was worth 16% more than its non-proof counterpart in October 2021.
Types of Gold Proof Coins
If adding proof coins to your gold collection is something you’re looking forward to, you’ve got a lot to choose from. In fact, most modern coins you come across have proof sets available. Nearly every country in the world has released at least one set of proof coins.
In many cases, you can immediately tell the difference because gold proof coins typically come in collector’s cases. For coins that are no longer in these cases, you’ll usually see a mint mark signifying its proof status. The best way to get what you’re paying for, though, is to buy from a reputable dealer.
When perusing offerings from these dealers, you can often expect to find the following gold coins available in proof form:
- American Gold Eagles
- American Buffalos
- Chinese Panda proof sets
- Mexican Libertads
- Australian Nuggets
- Private mint rounds
This is just a small sampling of the different types of gold proof coins. Collector’s demand will ensure mints around the world keep producing such coins. Some countries go the extra mile with these offerings — such as American display cases or Canada’s Bullion DNA security feature.
The real question boils down to whether the added initial cost is worth the investment. As long as you make smart purchases, the answer to this question will typically be “yes.”
Maximizing Your Investment
Whether it’s gold proof coins or any other bullion you’re investing in, the profitability of your purchase comes down to smart decisions. The simplest of mistakes can turn very costly when buying bullion. This is why every purchase you make should be an informed one.
The following tips are some of the most important to live by when dealing with proof coins. If you integrate these suggestions into your purchasing strategies, you’ll increase the likelihood that your investments will pay off one day.
Avoid Rarities
Proof coins are not new to the U.S. Mint. The first gold coin with a proof striking came out in 1821. If you find a Quarter Eagle or Half Eagle proof strike from that year, you may have just hit the jackpot. Of course, it’s more likely that you came across one in the Smithsonian.
While rare gold proof coins certainly hold incredible value, it’s not because of their precious metal content. When you purchase such a coin, you’re investing more in rarity than bullion. This is a perfectly acceptable investment decision — as long as you understand what you’re getting.
Buy From Reputable Companies
One rule holds true whether you’re buying proof coins or regular strikes: always purchase from reputable companies. It may seem tempting to buy gold proof coins outside of normal trade channels to save money. Unfortunately, the world is experiencing a major counterfeit gold problem.
Even if you’re purchasing coins on a trusted platform like eBay, there’s no guarantee that you’re getting the real deal. Some sellers may have unknowingly bought fake items, and you might end up doing the same. By sticking with reputable dealers, you’ll know your gold proof coins are genuine.
Always Get the Certificate!
No matter where you’re buying proof coins from, it’s always imperative to get the certificate of authenticity. You can typically find them right in the display case, but some of these authentication documents can get lost to time.
Even if you’re buying a genuine gold proof coin, lacking the certificate of authenticity can hurt you when you go to sell the item. While the real value is in the precious metal and beautiful finish, buyers are going to want that document.
This is another reason why buying from reputable dealers is the way to go. Every proof coin or set you buy from dealers typically comes with authentication papers by default.
Start Investing in Gold Bullion Today!
Gold proof coins offer a great way for collectors to add value to their collections. They are unmatched in their beauty, and even regular strikes of the same coin don’t stack up. If you’re on the fence about buying them, though, it’s important to consider your investment goals.
While proof offerings do come with added value, this can vary between coins. Additionally, there’s no way to tell what the future holds. Buying a proof coin now could result in massive profits in the future, or you could just get a few dollars more than non-proof offerings.
The important thing to remember is that you’re always getting value. Gold proof coins are a great investment, and they’re an essential addition for any collector. Visit our Gold Bullion page today to see all our proof offerings and their regular strike counterparts. You’re sure to find something you love!
