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Easy to lose money on proof gold

In late 1986, when the American Eagles debuted, a lot of people asked me if they should purchase the 1-ounce gold proofs at the then high price of $585 each. At the time, retail customers were purchasing the bullion issue gold Eagles for $450-$460 apiece. That meant that the proofs would have cost 27-30 percent more than the bullion issues. I was again asked the same questions about the Buffaloes when that series started in 2006.


Proof quality specimens are breathtaking works of art. But when the Mint sold 446,290 of the first year proof Eagles and 246,267 of the first year proof Buffaloes, it was obvious that numismatic appreciation prospects were limited.
I advised customers back then that I expected the price disparity between the two to decline over time, which would make the bullion issues the better value. I have made the same recommendation ever since.

My recommendation has not always been on the mark. A few years back, it was possible at one point to trade one proof Eagle to receive about two of the bullion Eagles.

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With the higher gold spot prices in recent years, however, the premiums on proof gold Eagles (and now also proof gold Buffaloes) have fallen almost down to the prices of the bullion issues. On Monday, we checked on what it would cost us to acquire proof Eagles and Buffaloes in the original government packaging along with all the papers versus the cost to purchase bullion Eagles and Buffaloes. In more or less unlimited quantities, the proof Eagles would cost us about 2.5 percent more than bullion issues. The proof Buffaloes would cost us about 1.5 percent more than the than bullion Buffaloes.

Proofs take a bit more handling to see that the packaging, paperwork and coins all look just fine. So figure that you could purchase proof gold Eagles for maybe 4 percent more than the cost of the 1-ounce gold bullion Eagle and that the proof gold Buffaloes would cost you about 3 percent more than the cost of the 1-ounce gold bullion Buffaloes.

If you are looking to liquidate proof Eagles and Buffaloes, however, I have some bad news for you. Because the proofs have a wider buy/sell spread than the bullion issues, you are unlikely to be offered any more for the proof issues than for the bullion pieces.

How can this be? Just look at the combined proof mintage figures through 2010:

1 ounce gold Eagle proof - 1,488,006
Half-ounce gold Eagle proof - 938,231
Quarter-ounce gold Eagle proof - 878,918
Tenth-ounce gold Eagle proof - 1,224,424
1-ounce Buffalo proof - 374,516
Half-ounce Buffalo proof - 12,169
Quarter-ounce Buffalo proof - 13,125
Tenth-ounce Buffalo proof - 18,840

Even without adding in the 2011 mintages, any collector can see that there are far too many proof Eagles and Buffaloes (except for the fractional Buffaloes) for them ever to be considered scarce coins. Noncollectors might be blind to the story these numbers tell.

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At the peak in price disparity, I was aware of at least one major national gold marketer that was selling proof Eagles at about triple the price of bullion issues. I was able to talk sense to a handful of customers into avoiding them. I also issued a sell or swap recommendation when the proof Eagles were worth more than double gold value. Some savvy customers took advantage of that opportunity, but many did not. Now my recommendation for those who own proof gold Eagles or Buffaloes is to simply consider them as bullion value and just hold them. There is no advantage to be gained today by trading the proofs for other gold coins.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at Coin Week ( He also writes a bi-monthly column on collectibles for The Greater Lansing Business Monthly ( His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

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