Monthly Archives: February 2019

Investing In A Buffalo Coin is Investing In A Piece of Gold Americana

If you are from outside of America, or not a coin collector, you might be forgiven for looking with curiosity at anyone talking about the value of “Buffalo Coins”.

Absolutely nothing to do with the bear and bull terms associated with the trade market, the Gold Buffalo is actually a 24-karat solid bullion coin that was minted in the United States in 2006. It had a face value of US$50. However, because there were only 300,000 minted, they were incredibly popular and that the gold price has risen significantly between 2006 and now, they sell for upwards of US$2,000.

Designing a 24-Karat Gold Coin

The gold Buffalo Coin was designed by a student of the American sculptor Augustus Saint-Gaudens – the designer for the US Mint of both the $20 “double eagle” gold coin in 1905 and the $10 “Indian Head” gold eagle 1907. It is hardly surprising that a student of Augustus would then go on to design the next great American coin.

Born November 4, 1876 in Winona, Minnesota, James Earle Fraser spent his early life on the American frontier, with positive interactions with Native Americans. He studied at The Art Institute of Chicago in 1890 before heading to Paris to continue his studies. Originally the American Buffalo Gold Coin was designed as the American 5-cent coin and was then modified slightly to become the $50 coin. A more complete history of the coin can be found here.

Reissues not Replicas

Because of their beauty and value – both as statements of patriotic Americana, and their monetary worth, these are of course sort after coins, no matter what year they were issued in. Which of course means that there are fakes being produced. However, not all of these are out to deceive, there are reputable companies who have created gold plated replicas for people that just love the look of the coin and want to be able to display it rather than have it as an investment. Genuine coins should come with a certificate of authenticity, if they don’t have the certificate it would pay to get the coin evaluated by a knowledgeable coin dealer to verify its worth.

Modern Buffalo Coins

Although the original gold buffalo coins were produced in 2006, the US Mint has released a limited number of collector editions of the coins each year. Each issued with the current year, coming in a wooden presentation box, and with a certificate of authenticity. They continue to be issued as one ounce of .9999 fine 24-karat gold, which is also why they continue to hold (and increase) their valued based on the market value of gold.

Generally, between 100,000 and 300,000 coins are minted each year, and they are purchased by collectors very upon issue. However you can of course purchase the gold buffalo coins from various sources after they have sold out at the US Mint – and many of the coins are likely purchased from the US Mint specifically so that they can be quickly resold for a profit as soon as the gold price moves up.

However, if you are buying a ‘second hand’ coin from an online source, particularly through social media or eBay first check reviews and ratings, and if you decide to go through with the purchase take the coin to be authenticated as soon as it arrives. Most sites will give you a short period of time to open up a dispute if it turns out that you have not purchased the genuine article.

Reputable Dealers

Once you get into coin collecting you will quickly learn who the reputable dealers are and who to avoid, online collectors’ forums will regularly “out” untrustworthy sellers as well. However, many people interesting in purchasing something the like American Buffalo are more interested in the purchase as a longer-term investment in actual gold than they are in whatever value the piece may have as a collector’s item.

This means that investors need to be even more vigilant as they generally don’t have the collector’s knowledge and network to fall back on. A dealer should be contactable. Although they may not give out their address on their website for securities sake, there should be a telephone number where you can speak to an actual person – and you should be able to see stock in person if you ask.