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Gold Bullion vs Gold Proofs vs Brilliant Uncirculated CoinsIn general, the words are used synonymously in conjunction with precious metals coins and rounds. The truth is there is a significant difference between these three and investors will want to understand those differences based on their individual investment objectives.
The term "bullion" refers to gold coins that have not been minted. Bullion is often used as an investment and trading tool. It is also used as a form of currency in some countries, such as the United States. Bullion is generally referred to as unfinished gold or silver. However, it is more used today in terms of bullion coins or rounds which have investment value based on the amount of metal in each.
Knowing there is a difference, educating yourself, and being knowledgeable will help with your investment decisions. We hope you find the information educational, remember to do your own due diligence before making any investment decision.
Gold Bullion Coins
Bullion Coins are a product of sovereign mints and can be made with gold, silver, palladium, and platinum. It is produced in large quantities and then sold to authorized dealers who in turn sell directly to the public for investment. Bullion is not graded; it is priced by weight. Gold bullion coins are sold by volume and weight. As an example, a bullion coin would have a current Spot Price plus maybe a premium when you purchase.
Gold Bullion Coins Are Perfect for InvestorsThose investors want to buy gold and hold it for the long term without the intention of collecting value. Gold bullion coins have no collectible value and are not graded by third-party grading services.
Bullion Coins Are Minted With a Specific Weight and PurityIf a coin is not graded, it will never have any numismatic value. Bullion coins are minted with a specific weight and purity. The value of bullion is based on the market spot price of gold or silver at any given time.
Not Graded and Usually Carry No Numismatic ValueBullion coins, on the other hand, are minted to exact weights and purity. They are not graded and usually carry no numismatic value.
"Coins" Always Have a Legal Tender at Face ValueBullion coins are bought and sold by weight, so a 1-ounce bullion coin will be priced at Spot plus any premiums.
Brilliant Uncirculated CoinsBrilliant uncirculated coins are not the same as bullion or proof coins. They are, as the name implies, coins that have not been in circulation and have a BU rating above 60. All coins can have a BU rating from the Professional Coin Grading Service (PCGS). The ratings range from 1 to 70. One being the most worn coin and 70 being a coin with no imperfections. Being graded between 60-70 is Brilliant Uncirculated.
If you purchase a roll of dimes, nickels, or quarters that are brand new, these are not considered BU coins. They are produced for production and circulation and don't hold the same investment value.
BU coins are typically picked up by collectors who want uncirculated coins that could possess a future value premium. Proof Strikes generally get a premium price due to the extensive nature of finishing. U.S. Mints can produce uncirculated coins with a Certificate of Authenticity. Again, these coins are typically picked up by collectors.
Gold Proofs Coins
Interested in Proof Coins? You can purchase from the US Mint directly. The West Point Mint Produces the Proof coins and you can purchase them in a variety of sets or on-off coins minted for special occasions. Check out what's available here.
Proof Coins can also be purchased from dealers, retailers, and local coin shops. Since these are investment-grade many have purchased and sold their investment. Be cautious of the grade of the coins if they have scratches or marks it could influence the value of the coin. Make sure you understand the metal in the coin and give value based on the spot price of the metal plus any premiums.
Should I Buy Gold or Silver Coins, Proofs, or Bullion?The spot price of gold is the key indicator for all coins, rounds, bars, proofs, or others. Understanding the metal content and the value based on the spot price is the first step.
From that point, you need to understand your intentions when it comes to investment. Are you looking to make this a significant part of your portfolio? If so, then you would look to bullion coins for a retirement IRA portfolio. You could buy rounds from private mints. These are typically cheaper than the coins but could be a good investment option. The negative of buying rounds from private mints is you cannot use them for a self-directed IRA purchase.
A long-term buy-and-hold investor could purchase Proofs as they would cost more in the beginning and since fewer are produced they could have a positive return in the future. Proofs can also be purchased by rare coin buyers or any investors looking for unique options to add to their precious metals portfolio.
Brilliant Uncirculated Coins are purchased mostly by investors that are into numismatics and rare coins. While you could purchase BU-rated coins for your individual portfolio, understand there is a difference in value from that of the Proof or Bullion coin.
In general, Gold is also a hedge against inflation, economic uncertainty, political uncertainty, and currency devaluation. Gold coins are not just for collectors anymore. They make great gifts for friends and family members!