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Unique and expensive, the American Buffalo Gold Coin, first minted in 2006, has become a highly sought-after treasure among not only coin collectors but gold investors as well. Does the uncertainty of US economic markets affect the value of these coins? How much are these coins actually worth? Sit back and take a journey through history to understand its significance and value as well as what the future holds for this distinctive coin.

History of the American Buffalo Gold Coin

The American Buffalo Gold Coin was created by the Presidential $1 Coin Act of 2005, otherwise known as Public Law 109-145. This law was signed by President George W. Bush on December 22, 2005, and laid out numerous designations and stipulations in regards to the production, sourcing, and value of the coin. For example, the law stipulated that the gold be mined from natural deposits, and that gold be used one year after the date of its extraction. The law also declared that the coin would feature the Indian Head and Buffalo designs, first featured on the 1913 “Indian Head” or Buffalo Nickel, on front and back respectively. The coins were also designated as legal tender with a value of $50. The law also stated that they are considered numismatic items, which refers to their general value as uncirculated or collector’s coins.

The American buffalo coin was then minted the following year. The design is a replica of the American Buffalo Nickel, first minted in 1913. The circulation of the Buffalo Nickel ran until 1938. The original design by James Earl Fraser features a composite portrait of several historical Native American chiefs on the front side. The composite portrait is an amalgam of Chief Two Moon of the Cheyenne tribe, Chief Iron Tail of the Sioux and Chief Big Tree of the Seneca. All three chiefs posed for the portraits, which were done by Fraser himself. The word “Liberty” is inscribed along the face of the coin, and the national motto E Pluribus Unum, or “Out of many, one” as well as the motto “In God We Trust” are inscribed on the back. Like Fraser’s original design, the back side features an American buffalo known as Black Diamond.

In order to understand the significance of this design, it is necessary to provide some historical background. In the late 1800s, there was incredible tension and violence between the United States government and the Native Americans tribes residing in the Western and Central United States. Between 1830 and 1850, over 100,000 Native Americans were displaced. During the 1848 gold rush, 300,000 Americans went west to search for gold–and many enslaved Native Americans in their pursuit of it. During the 19th century, the buffalo population went from 30-60 million to zero due to sport hunting by American settlers. As the buffalo was not only a major source of food for Plains Indians but also a central figure in their spirituality, the loss of the buffalo crippled their morale as well as their populations due to starvation. The original Fraser design attempted to honor the ancestral symbol of the buffalo as well as the dignity of Native American authority, and the 2006 gold coin seeks to do the same. The buffalo nickel is considered the among most popular coins in US Treasury history, and indeed has come to be known as the ‘most American’ coin. Many Americans have a sense of nostalgia surrounding the coin, as it was very commonly used during their childhood, and is no longer in circulation today.

The United States was also motivated to release the gold buffalo coins in part due to a desire to keep up with other countries’ high quality gold bullion coins, such as the Canadian Gold Maple Leaf coin and the Chinese Gold Panda coin. At that time, the US did not have a 99% pure gold bullion coin, and wanted to keep its investments competitive, and thus released the 24-carat 99% gold bullion coin. The United States makes up for roughly 60% of the gold market, and hopes that with production of the buffalo gold coin, gold sales will increase.

Production

The American Buffalo gold coin was originally produced in two locations: the US Treasury Mint and the American military academy West Point. Each coin produced features inscriptions that detail that coin’s specifics, such as metal content and purity, value, location of mint, issue number, and year of issue. Interestingly, the coins originally produced with a “W” for the West Point mint are considered “proof” rather than “bullion”; however today, all of these coins are produced at the West Point mint. The bullion coins do not feature a “W”. The “proof” circulation of the coin was limited to 300,000, and collectors had to place an order with the United States Government in order to reserve one.

Buffalo Gold Coin Price

The American buffalo gold coin, like all coins, has two different values. The first value is the denomination or legal tender value of the coin, which refers to the amount of money or value for which the coin could be directly exchanged. For example, a twenty dollar bill will get you $20 worth of groceries. But a twenty dollar bill from 1929, for example, could be worth as much as $300, depending on the condition and the color of its seal. So while the legal tender value would still be $20, the actual value would be much higher.

One factor in determining the value of legal tender is the material from which it was made. Paper money, depending on age and other factors, can be extremely rare, but money in form of a coin can go much higher in value.

In the United States, we assume that the penny is made of copper. However, it has been decades since that was the case. During World War 2, copper was reserved for weapons manufacturing, and the US Treasury began using steel to make pennies. The modern penny is actually made of zinc and then coated in a thin layer of copper. Thus, older pennies made of solid copper would have an added value not only due to the rarity of the coin but the actual higher value due to the heightened copper content. Granted, copper is not worth much, and a coin made of gold, for example, would have a far higher value.

The American Buffalo Nickel, with a legal tender value of five cents, is worth more now, due to the fact that circulation has stopped and the design was limited. These nickels can be worth up the $50 now, if in mint or uncirculated condition.

The American buffalo gold coin price follows the same concept. The legal tender value of an American buffalo gold coin is $50. But the coin is made of 24-carat bullion gold, and so the true value of the coin is far higher than its legal tender value. Bullion is defined as bulk metal used for legal tender. The largest reserve of gold bullion in the United States is held at Fort Knox in a special reserve adjacent to the fort known as the United States Bullion Depository and is kept in reserve in the form of gold bars or coins. The United States Bullion Depository is world-renowned for its security and holds 56% of the gold reserve in the entire country. Because the United States government holds the majority of the gold on the market, they can ensure its stability. This is why there are limits on gold purchases and trading in the United States. Thus the American buffalo coin is not only a collector’s item but a literal piece of American financial security.

Despite their designation as legal tender, none of these American buffalo gold coins are used as currency due to the value of their high gold content. This legal tender value is largely symbolic as they are purely a collector’s item and are worth much more as a numismatic item. The United States Mint was authorized in 2006 to produce a maximum of 300,000 of these coins per year, but the average amount created per annum is on average about half that.

According to the current market value, the American buffalo gold coin price is $1750.00. This is mostly due to its gold content, although there is value on historical significance, the limited circulation, and the unique format in which the gold appears. The Buffalo Gold Coin Price is thus a reflection of both its literal gold value and its rarity as an actual physical item, and that price will only rise when the coin is no longer being minted. As of 2021, the US Mint has no plans to halt production of buffalo gold coins.

If you are into coin collecting, you should also check out the Five Dollar Liberty Coin.  They were first minted in 1839, making it one of the most sought after gold coins for collectors.

Looking Forward

Having said this, production of the American buffalo gold coin has been disrupted several times. The first was during the financial crisis of 2008, when the US Mint announced they would halt production of the coin because they could not keep up with investor demands. In 2010 the US Mint ran out of their bullion stock reserves and had to halt production again, and in 2015 sold through their entire inventory of proof bullion gold. The price of gold has skyrocketed in recent times due to economic uncertainty, raising considerably the value of the gold coin. Due to the nature of the US economy, especially in recent decades, the future of the Buffalo gold coin has been steadily increasing.

Currently, all American buffalo gold coins are produced at the US Mint at West Point. The mint at West Point was shut down on April 15, 2020, due to Coronavirus. General production then shifted to the Philadelphia Mint, but the production of gold bullion coins was halted. These uncertainties can, for the time being, only increase the price of the coin. All of these instances, both economic and epidemic, although disrupting for the production of the coin, only increased the value of the existing investments. We can see that American buffalo gold coins have a high value that is only increasing with time.

American Buffalo Gold Coins – Do they Qualify for IRA Investing?

If you are into stock piling gold coins in an IRA and wondered if this coin is approved, the answer is YES!  If you are new to investing in precious metals for retirement and want an education on this topic by an expert, I urge you to read this page and learn about gold IRA investment companies that can help you set this up according to IRS regulations.

The American Buffalo gold coin is a unique piece of both cultural and economic history whose value is inexorably linked with global gold stability. Investing in the buffalo gold coin gives you the opportunity to purchase not only a treasure for yourself, but participation in American gold diversity and general gold market stability. The American buffalo gold bullion coin is also an artifact which will continue to be treasured, only increasing in cultural and historical significance in the years to come.

A Florida-based Republican, Entrepreneur, Author, and Life Hacker, Tim Schmidt is pro-guns and believes in protecting his wealth. This website shares his thoughts and opinions on retirement investing options. You can find him online on his Official Website as well as on his LinkedIn page.