As far as coins go, there are two major different types to know about. The first are proof coins and the other is uncirculated coins.
We’re here to rectify this situation. We will teach you all about proof coins, so you have a better understanding of this valuable hot commodity.
Also, the next time you wonder, “are proof coins a good investment,” you’ll know exactly how to answer this question. And you’ll know that these coins are truly an amazing asset like the American Eagle proof coins, which is one solid example of a fantastic investment opportunity.
What Does Gold Proof Mean?
A proof coin, also known as a gold proof coin in some situations, is different than a circulated or uncirculated coin. Although proof coins are valuable, just because you have one doesn’t mean it’s going to be in excellent condition.
The definition of proof is: it’s a coin that was designed with sharp details and specifically distinguished with a surface projecting a mirror like brilliance.
When they strike a proof coin, they do it twice for good measure. They also use a special dye to treat the coin, which provides glossy, sharp, and finely detailed features. This type of shiny glossy finish really stands out.
Grading Proof and Uncirculated Coins
Did you know that they grade the quality of proof coins? Believe it or not, they also quality the quality of uncirculated coins as well following the same method.
Ultimately, the condition of these coins is graded on a number scale. If you have a proof coin in perfect condition, it will receive a PR 60 grade. And if the proof grade is lower, this means it was handled more and shows more signs of wear and tear.
The Biggest Reasons to Purchase Proof Coins
- Value – the reason why so many collectors and investors gravitate toward proof coins is they pertain a higher markup value. They are rarer and they are worth more than other uncirculated coins. Because it’s considered a collector’s item, you can expect to sell it for more value than you would just for the gold, silver, platinum, or palladium within the coin. The fact that it is a collectible coin makes it even more valuable.
- Scarcity – the US Mint has to spend an inordinate amount of time producing these coins, which means they are very scarce and exceedingly rare and harder to come by than regular coins. The bulk of coin sales are made up of raw coins, which means proofs are few and far between. As a matter of fact, within a group of uncirculated coins in a series, proofs tend to only make up between 5% to 20% of the bulk of these coins, which obviously makes them a lot rarer than the others in the group.
- Collectability – as I’ve touched upon already, collectible coins are typically rare and are created using high quality materials and have a beautiful presentation. Collectors tend to buy proof sets because of their rarity and collectability. They make excellent gifts that you can give to anyone on their birthday, during the holidays for Christmas, or for another special occasion.
- Appearance – the interesting thing about these coins is that they’re struck twice, not once, like typical coins. These proof coins are struck an extra time because it makes the finish look cleaner, shinier, and definitely sharper. The overall design tends to pop and you’ll notice the intricate details of the coin much better on proof coins as opposed to regular coins in the same set. You can typically identify a proof coin because the background has a mirror like presentation. The glossy shine on Gold American Eagle proof coins is really attractive, and it’s one of the main reasons why these coins have become so popular.
Are Proof Coins a Good Investment?
It shouldn’t surprise anyone to learn that proof coins are an excellent investment based on the information that was shared above. Not only are they rarer which makes them have a measure of scarcity, they are also designed with collectability in mind. They are created to look absolutely amazing, which makes collectors far and wide fall in love with their appearance.
Besides those reasons, it’s also important to know that proof coins possess serious value. When compared to a regular uncirculated coin, they have a higher markup value because of their collector’s appeal and the gold content or silver content of the coin itself .
What Are Uncirculated Coins?
Typically speaking, uncirculated coins are coins that do not necessarily contain a face value. They are coins that are struck by the US Mint for very specific purposes. But they aren’t designed to be spent in stores like typical pennies, nickels, dimes, and quarters.
They use a standard production method to create uncirculated coins.But the finish will vary and you may even notice blemishes on these coins or you may not. It all depends on how it came out during the minting process or transportation.
Reasons to Love Uncirculated Coins
- Price – many investors like to buy uncirculated coins because they are cost-effective when it comes to buying silver and gold coins of this nature. Again, these coins aren’t collector’s items, so they aren’t going to have a huge markup because of their rarity. They basically sell at the going rate of gold, silver, platinum, or palladium based on current market conditions. Many people use them inside their gold IRA investment.
- Popularity – they are also very popular among investors far and wide. They are affordable, they are made of high-quality material, and they’re guaranteed to possess high quality characteristics.
As you now know, proof coins are more popular than regular coins and uncirculated coins. They are specifically minted to become more valuable and rarer, and they definitely achieve this aim. If you’re a collector, you may prefer proof coins over uncirculated ones. It all depends on your personal investing strategy to determine which choice is best to meet your needs.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.