The starting point for any consideration of the 1879 Shield nickel has to be its low 29,100 mintage, with 3,200 of those being proofs. That leaves just 25,900 business strikes.
The question is why there was such a low mintage. There is no official answer, but Jan. 1 of that year was the date when the Civil War inflation premium on gold and silver coins when expressed in paper money ended after 18 years. For the first time since 1861, $20 in paper could buy a $20 gold coin or $20 in silver coin. With the public convinced this was so, hoarded coins came out of hiding and demand for new coins was greatly reduced.
Whatever the reason, we can be sure of one thing: the 1879 is a tough date in circulated grades, with a current price of $415 in G-4, while an XF-40 is at $750. The supplies on circulated grades are thin, as an extremely low mintage was released at a time when there were few collectors assembling nickel sets from circulation.
The story of the 1879 gets even more involved when you move to upper grades. The simple fact is the 1879 is very rare in Mint State. Were there greater demand, it would be even more expensive than its current listing of $970 in MS-60 or $2,000 in MS-65.
What few Mint State pieces there are tend to be nice. After all, with a mintage of just 25,900 business strikes, the dies were not going to get terribly worn.
If we check the Professional Coin Grading Service, they report a total of 61 examples of the 1879 seen in Mint State and virtually all were in grades from MS-64 to MS-66 with just 15 falling below MS-64. These are unusually high grades for a coin from 1879.
At the Numismatic Guaranty Corporation, they have seen 40 examples of the 1879 in Mint State, with 19 examples in MS-65. In all, there were 31 in MS-65 or better, repeating the PCGS pattern of high grades.
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There is, however, another factor. Proofs were a popular choice for collectors of the day. The price of a Proof-65 is just $840, even less than an MS-60.
While the proofs and top quality business strikes are hard to tell apart, the proof totals at the grading services make the idea of a proof a potentially popular one.
NGC reports a total of more than 200 examples of the 1879 in Proof-65 or better and even 150 in grades below Proof-65. The PCGS totals are basically the same, with more than 200 examples in Proof-65 and another 100 in grades below Proof-65. The totals suggest that a nice proof is far easier to find than Mint State examples.
Do not be discouraged by the large numbers in proof. The 1879 Shield nickel is an extremely low mintage coin for your money and you are getting the coin in a top grade, the sort of deal you will not find often in the rare coin market.