How would you like to own a coin of pure 24-karat gold? Nowadays you can because the United States Government has been offering the Buffalo fifty dollar coin for the first time. This became available on June 22, 2006 and it is a unique and beautiful design. One side displays an Indian head, similar to the one found on the Indian Head nickel. It is also known as the American Buffalo because an image of the bison is displayed on the reverse side.
It was created because the Presidential $1 Coin Act passed in 2005 mandated that one of 24-karat be minted that had a face value of $50 (fifty dollars).
Even though the face value of the Buffalo is fifty US dollars, its market value has increased due to the considerable increase in the value of the metal over the past seven years. In the US currency terms that is is now well over fifty. No more than 300,000 of the fifty dollar Buffalo will be minted. The United States mint has indicated that the program will be expanded to include additional Buffalo in smaller sizes. In 2008 those of smaller face value came out which were five dollar (one tenth ounce), ten dollar (one quarter ounce) and twenty five ollar (one half ounce).
Demand for the Buffalo Fifty Dollar Coin
Coin collectors and investors alike were waiting in line for the buffalo to become available. In addition to the limited mintage quantity of 300,000, no household is allowed to own more than 10. On July 22, 2006 when they were first released, the Smithsonian Institution’s coin collection received two Buffalo coins due to their historic value. (continued below)
The National Collector’s Mint, which is a private company, offers a clad version of the Buffalo coin for $19.95. These actually have only a thin plating of the prized metal bonded to less expensive metal such as copper, nickel or a combination of the two. They are also of a different dimension than the genuine article. If you would like to purchase the American Buffalo coin or any other of the same precious metal minted by the United States Government, it is recommended you contact a reputable dealer who charges low premiums. Look for a dealer with an A rating at the BBB.
Why the Buffalo Gold Coin is a Popular Choice
Gold coinage is a very popular investment currently because the value of the US currency has been declining, and also because of an uncertain worldwide economy. One of the most popular choices for investors is the one ounce fifty dollar Buffalo. This denomination is more available than some other investment vehicles. (continues below)
Part of the reason for this popularity is how convenient it is to buy and sell assets of this size, giving the holders an option of easily cashing out if they need to. Proof versions of the fifty dollar Buffalo are available for nearly every year, and they provide an enjoyable way to create an impressive collection and invest in gold at the same time.
More on the Buffalo Coin at Wikipedia
Video: Tour the US Mint in Philadelphia.
Did you know you can tour a US Mint? To see whether it would be worth your time, take a preview via the video (left).
It does seem that the tour is proving quite popular for those who have made the trip to the US Mint in Pennsylvania. It may not be like a tour of Fort Knox, but could be the next best thing for some Americans.
For now, enjoy the virtual tour on video.
Collecting American Gold Coins As An Investment And A Hobby
Of all the different ways to approach gold investing, the collecting of coinage is is one of the most enjoyable and rewarding. It’s a lot more than just counting up ounces of precious metal! As you’re about to see, collecting American precious coins can be a very complex (and exciting!) endeavor.
The Value of Gold
Economic uncertainty has sent the price of gold skyrocketing at times. This hardly means that a good gold coinage hoard is an unaffordable luxury, though! Thanks to the huge variety of American coins produced throughout history, including the Buffalo, there are valuable and attractive pieces available to suit virtually any budget. For example, many collectors like to start out with smaller, less expensive ones. Modern gold Eagles are minted in half, quarter, and even tenth-ounce varieties.
Bullion vs. Numismatic Value
For any coin collector interested in gold, the distinction between bullion value and numismatic value is critically important. The former measures the market price of the precious metal contained in a particular coin. The latter represents the its rarity, condition, and appeal to collectors. Building a collection with plenty of numismatic value is a smart idea. While your stock’s overall bullion value will fluctuate based on the ups and downs of the gold market, a rare and sought-after coin will hold its value no matter where the spot price of goes.
As you can imagine, numismatic value can be difficult to determine. Although serious collectors do research and cultivate a discerning eye for assessing the condition of coins, today most people trading them rely on professional coin grading services. These are large companies that employ experts to assess the true quality of a given coin. When they are sent to a grading service, they return sealed in a plastic case (usually called a “slab”) with an official rating of their condition. The most trusted and common grading companies in the US are PCGS and NGC. Expect to see plenty of slabbed coins if you get serious about buying American gold. If you have loose coinage you want to trade, consult a coin dealer about having them graded to certify their real value.
The Importance of Diversity
Because the United States has been minting gold coins for over two centuries, there’s an astonishing breadth of different variations out there on the market, of which the Buffalo is part. To get the most out of your collection, keep your eyes peeled for all sorts of gold. Investors who are only interested in bullion value are adequately served by consisting solely of, say, the Buffalo fifty dollar coin, but to build a great collection you want much more variety. Seek out rare and beautiful coins like the magnificent Saint-Gaudens Double Eagle. Remember, a diversity will hold more real value.
Hopefully, this little introduction has helped to pique your interest in the world of coin collecting and the Buffalo in particular. You can learn much more on the topic even before you invest in your first piece! If collecting habit agrees with you, you’ll be well on your way to assembling a collection that you’ll find both valuable and enjoyable.
by Roy Thomsitt