What Are Proof Coins – And Are They a Good Investment?

Posted - February 5, 2024
what are proof coins?

If you’re a new investor, you’re not alone. We’ve all been there, and it can be confusing to try and parse the complicated language used to describe coins. Proof coins, uncirculated coins, bullion coins – it can feel disorienting to have all these terms thrown at you all at once. 

The good news? We’re here to help. Investing in proof coins can be a great way for you to diversify your portfolio while still stacking beautiful, valuable silver or gold coins. In order to start stacking coins with confidence, you’ll need a bit more information about what proof coins actually are

So what are proof coins? Are they just a fancy way to overspend on silver, or do these bullion coins add genuine value to your precious metal stack? 

We’ve got you covered in today’s Bullion Academy guide. We’ll run readers through everything that new investors should know about buying and selling proof coins. 

The Basics: Understanding the Types of Coins

For investing purposes, there are four different types of coins that you need to be aware of. Bullion coins, uncirculated coins, circulated coins, and proof coins are all examples of how investment-grade coins can be described. 

You’ll find a healthy variety of each of these coin types on the Hero Bullion website. We work hard to offer some of the most competitively low prices in the industry, so be sure to check out our current stock! 

Below, we’ll take a closer look at the different types of coins you may choose to put your money on. 

Bullion Coins 

Bullion coins are one of the most popular ways to invest in gold, silver, and platinum. According to the U.S. Mint, bullion coins are considered investment-grade. These coins aren’t sold directly by the mint but are instead distributed by its partner dealers across the United States. 

Bullion coin prices vary based on the current spot price of the metal they’re minted with. In addition to a coin’s melt value, dealers add a small premium to determine the total sales price of a given bullion coin. 

The easiest way to explain bullion coins is that these coins are primarily valuable for their bullion content. For the most part, bullion coins are minted with some of the highest purities in the industry. While some circulated silver coins only include a fineness of .90, most of our favorite silver bullion coins cap out at a .999 or .9999 purity. 

Uncirculated Coins 

Bullion coins are usually sold in uncirculated condition. Certain non-bullion coins can also be uncirculated. In short, uncirculated coins refer to coins of any precious metal purity that have never been released to the general public as currency. 

This might sound a bit confusing – we’ll explain. “Circulation” means that a coin has been used by the public to conduct trade. When you go to the gas station and take a penny out of the jar to pay for an item, you’re using a circulated coin. But if you buy a rare penny, dime, or nickel that has never actually changed hands, this coin would be considered uncirculated. 

It’s important to note that uncirculated coins come in many different varieties. Bullion coins can be uncirculated or uncirculated, although we primarily sell BU (Brilliant Uncirculated) bullion coins on our website. 

Circulated (Numismatic Coin) 

Like we mentioned above, some coins are released to the general public and used to buy and sell items before they become collectables. When we sell circulated coins, they’re often considered numismatically valuable. This means that while these coins aren’t uncirculated, they still sell for a high price to collectors. 

Sometimes, certain circulated coins can be worth more than expensive uncirculated bullion coins. Take the Morgan Silver Dollar, for example. Even circulated Morgans in poor condition might be worth thousands of dollars, especially if they feature rare mintage errors or are from low mintage years. 

Proof Coins 

Of all categories of mint-produced coins, proof coins are both the rarest and the highest quality. These coins are minted in a limited quantity each year, and they’re often bought – and sold – at high premiums over their melt value. 

What are proof coins? Proof coins are rare coins that are struck twice and usually sold with a certificate of authenticity by the mint that produced them. 

2022 1 oz Proof Mexican Silver Libertad Coin
2022 1 oz Proof Mexican Silver Libertad Coin

The double striking of a proof coin gives it a unique frosted appearance, which brings out the intricate detailing on the coin’s faces with an exceptional shine. Aside from their beautiful look, proof coins are also given special attention by the mint. Usually, proof coins are hand polished and cleaned before being placed in a protective capsule. 

What is a Proof Coin? 

Proof coins often represent the very best that a mint has to offer. Because these coins are minted in extremely limited numbers compared to common bullion coins, mint experts are able to give each coin extra attention to make it look as beautiful as possible. 

To some investors, proof coins are the best way to invest in their favorite coins. By stacking proof coins, you might be able to add numismatic value and rarity to your collection. For investors who want to diversify their portfolios with rare bullion, proof coins are a must-have. 

Are Proof Coins Expensive? 

Proof coins are often sold at a higher markup than traditional bullion coins. This shouldn’t be surprising, considering the extra level of care that mints give their proof coins. Still, you should be prepared to spend a pretty penny if you choose to start investing in proof coins. 

How to Buy Proof Coins 

Hero Bullion sells a wide range of proof coins to help you build your silver, gold, or platinum portfolio. For the most part, our proof coins are kept in their original protective cases. Whenever possible, we also include a certificate of authenticity (CoA) from the mint that produced your proof coin. 

To buy proof coins for your collection, you’ll need to choose the right dealer, compare prices, and look for the coveted certificate of authenticity that can give you a bit more trust in your investment. 

Choosing the Right Dealer

Finding the right dealer is an absolute must for investors who want to start stacking proof coins for their precious metal portfolios. 

You’ll pay a relatively high premium for your proof coins, regardless of which precious metal dealer you choose. However, some gold and silver dealers may offer better deals than others. Hero Bullion offers competitive pricing on all proof coins, so be sure to check out our selection before settling on the right dealer. 

But as you look for a dealer for your next proof coin investment, be sure to look at more than just a good deal! The right dealer should offer competitive shipping rates, as well as a fair return policy in case you’re dissatisfied with your purchase. 

Comparing Prices

If you’ve been around the block as a coin collector, you already know the deal with premiums. If this is you, feel free to skip past this brief explainer. 

For new investors, you should know that silver coins are never sold for their melt value. Melt value, of course, refers to the value of a coin’s precious metal content. If you melted the coin down and took out all the non-silver parts then sold the silver, that’s your coin’s melt value! 

Proof 1 oz American Gold Buffalo Coin (Box & COA)
Proof 1 oz American Gold Buffalo Coin (Box & CoA)

But coins are also sold at an additional markup, called a premium. Premiums are high for proof coins, since they’re both rare and beautiful. Shop around for the lowest prices when you look for proof coins to add to your collection! 

Look for a Certificate of Authenticity!

Coin dealers don’t have to give you a certificate of authenticity when they sell you a proof coin. However, we find that most buyers like to keep the CoA with them when storing or selling their proof coins. 

Certificates of authenticity can serve an important purpose when you get ready to sell your investment for cash. Like you, your future buyers will want some sort of verification that your proof coin is authentic. Getting a CoA with your purchase can make it much easier to get top-dollar for your investment when it comes time to take some profit down the line! 

Advantages of Buying Proof Coins

Proof coins have been a classic way to stack silver and gold for decades. The unique, beautiful, frosted look of a proof coin looks fantastic in any collection. And over time, you might be able to secure a tidy profit if you invest in proof coins the year that they come out. 

Proof coins from popular series like the American Gold Buffalo are famously good investment options. Even if you save some money by putting money into proof silver coins, the numismatic and collectable value offered by proofs can help you make substantial gains in your portfolio’s value. 

Pros of Investing in Proof Coins 

There are three main advantages to investing in proof coins. These coins offer a high degree of collectability, beautiful designs and toning, and numismatic value to collectors. Still not convinced that proof coins have a place in your collection? 

Keep reading for a full breakdown of the main advantages of investing in proof coins from the U.S. Mint. 

High Collectability 

Proof coins are undeniably collectable. These coins are minted in far lower numbers than the usual bullion coins produced by the world’s mints. 

For context, consider the American Silver Eagle. Since its first mintage run in 1986, the United States Mint has produced a grand total of 561,281,982 American Silver Eagles. During that same timespan, they’ve only released 21,553,544 proof Silver Eagles. 

The story is much the same for nearly every other major world coin. Because proof coins are hand-polished and given a unique double-strike by the mint producing them, they’re naturally far more limited in supply than traditional bullion coins of the same series and design. 

1992 Proof Australia 1 oz Silver Kookaburra Coin
1922 Proof Australian 1 oz Silver Kookaburra Coin

This makes proof coins a hot commodity among coin collectors. Granted, some proof coins from less popular series might not sell out, which could limit their value appreciation over time. But for the world’s most popular coins, the finite number of available proof coins means that early investors could make quite a bit of money over time. 

The high collectability of proof coins is one of the main reasons investors love to buy these beautiful, rare editions of their favorite coins. 

Beautiful Designs and Toning 

As we explained above, proof coins are extremely beautiful. According to the U.S. Mint website, proof coins are struck twice instead of just one time, which gives them a unique frosted appearance. The fields of proof coins also have a highly reflective surface, making them shine even more than regular coins. 

An added benefit is that proof coins do feature the same famous designs that we find on regular bullion coins. The American Silver Eagle’s proof coins might have an added shine, luster, and frosted effect, but they also carry with them all of the design details that helped make the Silver Eagle an American classic. 

Investors love to buy proof coins for their rarity, but it’s also undeniable that proof coins showcase some of the very best minting technology and artistry on the market. 

Numismatic Value to Collectors

Like most actual financial advisors, we recommend diversifying your precious metal portfolio. To some investors, this means stacking multiple types of different precious metals. This is a good start, but a collection without numismatic value is entirely dependent on the current spot price of the precious metals it’s composed of. 

Instead, we recommend finding ways to build collectable and numismatic value into your collection. Because proof coins are always valuable to collectors and can increase in value over time due to their rarity, they’re a great way to build another way to profit into your bullion portfolio. 

Final Thoughts: What Are Proof Coins? 

What are proof coins – and should you be buying them? Proof coins are special coins produced in limited quantities by mints around the world. These coins are double-struck, which gives them a unique look and highlights their beautiful reverse/obverse designs. 

We recommend taking a look at some of the beautiful proof coins for sale on our website. As always, don’t hesitate to reach out if you have any questions or concerns for our team. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.