Proof vs. Uncirculated Coins: Comparison Analysis
What Is The Difference?
The first question you may be asking yourself when you are trying to decide if you are going to invest in bullion coins or proof coins is: what is the difference between them?
Table of Contents
- Top Differences
- What Does Proof Mean in Coins?
- Which One Should I Buy?
- Why Are Uncirculated Coins Worth More?
- Is a Proof Coin More Valuable?
- Differences Between Bullion, Proof, & Uncirculated Coins?
- Are Uncirculated Coins Worth Buying?
If you don’t have prior knowledge of coins, a proof coin and a bullion coin can seem to be the same thing. Also, it may seem silly to you to pay more for one coin than the other when they appear to be made out of the same amount of gold.
Bullion coins are the purest gold or silver coins available. They are basic coins that get their value from the spot price of either gold or silver at the time that you purchase them. These coins are raw uncirculated coins that do not have the same premium added costs of proof coins. Many investment companies offer some sort of bonus coin when starting an investment.
- Bullion coins are purer than proof coins.
- Proof coins are struck twice when minted.
- Proof coins are produced in smaller quantities, ranging from 5%-20% produced compared to bullion coins.
- Proof coins are more expensive to purchase.
- Bullion coins are best for investors while proof coins are best for collectors.
What Does Proof Mean in Coins?
Proof coins are gold and silver coins that are stamped with a design. These coins are mostly used for their collectability because they have a high quality presentation. These coins are twice struck which means they have an increased amount of shine and luster.
Regular coins are only struck once so they do not have the clearly defined appearance with more intricate designs are a brighter, shinier look to them that proof coins do. This allows collectors to enjoy displaying them because they easily look impressive. Proof coins are also more expensive than bullion coins because more work goes into producing them, and because they are generally bought by collectors. Proof coins are also produced in much smaller quantities, about 5-20% of the quantity of bullion coins.
Which One Should I Buy?
Now that you understand the difference between bullion and proof coins, you might be wondering which one you should buy. This is a very personal choice based on your investment goals.
Why Are Uncirculated Coins Worth More?
If you are looking to purchase gold or silver coins purely for their investment value, then bullion coins will be the route you want to take. These are plain coins that are the pure gold or silver substance that does not have any extra glamor to them. These gold or silver bullion coins are purchased very close to the spot price of gold or silver, and can be sold easier when the cost of gold increases pass the price that you originally paid for them.
Is a Proof Coin More Valuable?
Proof coins are the more expensive option compared to uncirculated coins, but it also has more value than just a blank coin. This is because they are stamped with not only a design but also contain historical value, special dates, are one of a kind, are made in an unusual way, or contain special marks. Also, as crazy as it sounds, these coins can be more expensive if they have errors in them that makes them even more rare.
Silver proof coins have a higher premium on top of the spot price of silver, while gold proof coins have less of a premium over the spot price of gold. This means that if you purchase silver proof coins, a higher percentage of their cost is found in the premiums over the value of silver, than if you purchased silver bullion coins. So, are proof coins a good investment to consider? As an investor and collector, it is important to take this difference into consideration when you are trying to get the most value for your money. You can see what proof coins look like by looking at this image of a British proof set.
What Is The Difference Between Bullion, Proof, And Uncirculated Coins?
Differentiating between bullion coins, proof coins, and uncirculated coins can be confusing at first, however it is very important to understand the difference when you are trying to decide what to invest in.
Bullion coins are coins that are intended for investors. These coins are not sold to individuals directly from the United States Mint, but instead have to be purchased from authorized dealers. In addition, their value is directly tied to the price of gold or silver at the time that you purchase the coins. This means their price fluctuates based on the date that you purchase the coins, and their value will change with the price of gold or silver on the day that you decide to sell your coins.
Are Uncirculated Coins Worth Buying?
These coins are worth buying for investors because their price is directly tied to the price of gold or silver and can be sold easily when the price of gold or silver rises above what the investor purchased the coins for. Proof Coins are the highest quality of coins that are made in the United States Mint.
These coins are made from blanks that are treated, hand polished, and cleaned to make sure they get the highest quality strikes when they are making the coins. These coins get their name “proof” from the coin’s shiny finish. They are struck twice which gives them an intricate design with a mirror-like background. They are also enclosed in a protective case to ensure they keep their shine and are protected in any transport. These coins come with a Certificate of Authenticity to make sure the buyer knows just what they are getting.
Uncirculated coins are made just like circulated coins that are used as money. They are different from circulated coins because they are made with a different process that gives them a brilliant finish that regular coins don’t have. In addition, these coins come with a Certificate of Authenticity to ensure that the buyer knows that the coin they are getting is legitimate.
If you are looking to make your first steps into investing in gold and silver, it can be daunting. It is important to understand the difference between the types of coins, whether you are looking into bullion coins, proof coins, or uncirculated coins. Each type of coin has a different price point and a different purpose. It is also important to decide what your motives are for investing.
If you are looking purely to invest in gold or silver, then bullion coins will be the ones for you because they are the closest in price to the spot price of gold which means you are not paying a high percentage of extra fees. If you are looking to purchase a collectors coin that has an increased value above the spot price of gold or silver, then proof coins are the ones for you.
Either way, whatever your motives are, investing in gold and silver as a way to diversify your portfolio is always a smart idea in order to add more security and value to your portfolio. Learn more about our $10k free silver promotion when you roll over your IRA here.