BU vs Proof Bullion - Proof less expensive; why!?

Discussion in 'Bullion Investing' started by LPaul47, Nov 24, 2019.

  1. LPaul47

    LPaul47 Member

    Been looking into adding a few more coins into my stack, but am confused why the Proof coins are less expensive than the BU coins (same design/weight).

    Seems as if the opposite should be true.
    Any benefits to adding BU to the stack vs Proofs when the proofs are LESS expensive?
     
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  3. cpm9ball

    cpm9ball CANNOT RE-MEMBER

    Business strikes are more susceptible to nicks and dings at the Mint than proof coins which are handled with kid gloves. Proof coins quite often grade PF69 or PF70. How often do you find business strikes that grade MS68 or MS69?

    Chris
     
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  4. LPaul47

    LPaul47 Member

    Chris,
    Thanks for the response, but I feel as though my original question was missed:

    Any benefits to adding BU to the stack vs Proofs when the proofs are LESS expensive?

    I don't care about a bullion graded coin because that adds on extra unnecessary expenses to the bottom line of (bullion investing).
     
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  5. cpm9ball

    cpm9ball CANNOT RE-MEMBER

    Maybe I shouldn't have responded to your title and the first part of your comment while the Pats/Cowboys game was on. Regardless, my answer is why proof coins are cheaper.

    If you find no benefit in spending less money for, say, a PF69 SAE as opposed to an MS69 SAE when both contain the same amount of silver, then, I can't help you.

    Perhaps you should have been more explicit in your inquiry.

    Chris
     
  6. Clawcoins

    Clawcoins Well-Known Member

    Can you provide specific examples of Proofs being less expensive then BU?

    There are certain releases where more Proofs (initial release demand was higher) were made compared to BU (less demand and less sold), and thus the BU value is higher.
    example:
    upload_2019-11-25_9-29-35.png

    There are others where that is opposite such as AGEs where Proof is more than BU.
    upload_2019-11-25_10-8-41.png

    There are many others where they are both valued to same as some spot price + general premium.
    example: upload_2019-11-25_9-30-6.png

    Then you get into slabbed examples, then people who collect certain examples.

    If you are after strictly "stacking" then you want a specific manufactured coin (for instance you may only be looking at US MINT products, or also Canadian, etc). then you want the coin to be as close to spot as possible. The general $5 and $10 commems I think are in that category, and also 1oz AGE/APE/ASE.
     
    Last edited: Nov 25, 2019
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  7. Packrat

    Packrat Active Member

    I think I understand the inquiry. I am guessing sometimes more proofs are minted than uncirculated mint products. Higher mintage might indicate lower aftermarket price. If buying for bullion, silver is silver and there would be no difference in the amount of silver, so there would be no benefit of BU over proof.
     
  8. Clawcoins

    Clawcoins Well-Known Member

    Sometimes more Proofs are minted as more people were buying the Proofs than the Uncirc variety. Thus any unsold during the year are then scrapped.

    ASE Proofs generally, even in aftermarket, are sold above BU prices.
    UNLESS you are dealing with a dealer who holds no difference between Proof and BU.

    If you take a look at the offering last week of the Reverse Proof ASE ... there was not enough supply for demand. So the aftermarket price is crazy. Wait a couple years and see what happens. It may, or may not hold the premium.

    In other words, it depends. You cannot stereotype all Silver, Gold, Platinum, Palladium BU and Proof coins into one simple "category" for a simplistic valuation explanation.
     
  9. -jeffB

    -jeffB Greshams LEO Supporter

    I know for the Gold First Spouse series mintages were generally higher for proof than for business-strike coins.

    But, yeah, @LPaul47, it's going to be hard for anyone to answer if you don't at least narrow down what kind of bullion you're talking about.
     
  10. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    I couldnt agree more, some on this site are pro active when it comes to
    Grading bullion coins, kike you said it adds an unwanted premium to
    something that,s going to come out of the shoot in high grade anyway,
     
  11. LPaul47

    LPaul47 Member

    Sorry for not begin specific.

    Right now on a****.com:

    Random Proof Gold Buff: 1,512
    Random BU Gold Buff: 1,537

    Random Proof Gold Buff buy back: 1,462
    Random BU Gold Buff buy back: 1,460

    Why would I buy BU in this situation!?!?
    Am I missing something?
     
  12. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    If your main purpose is for investment only, buy the cheapest, just makes sense
    Regardless of anything else.
     
  13. -jeffB

    -jeffB Greshams LEO Supporter

    Yeah, I've seen some stuff that carries a premium when you buy it and when you sell it. But if all you want is the bullion value, buy whatever carries the lowest spread.

    It would be wise to check some other dealers and see whether they follow the same pattern. I don't imagine you could do profitable arbitrage among them -- the highest buyback price you can find is bound to be lower than the lowest selling price you can find -- but make sure this isn't a transient or dealer-specific deviation.
     
  14. Collecting Nut

    Collecting Nut Borderline Hoarder

    If you're buying coins than buy the best coin you can get to build your collection but if you're looking to add PM's to build a stack then buy the cheapest you can.
     
  15. Good Cents

    Good Cents Active Member

    "Am I missing something?"

    Yes. You're missing reading the Product Description. When you go to the coin on the website you referenced, it says the following under "Product Details":

    "These proof Gold Buffalos are missing some of their packaging, and may have damage or imperfections on the coins themselves. This is an excellent way to add these beautiful proof Gold coins to your collection at a significant discount."

    These are mostly damaged proof coins. As others said above, if you're buying only for the bullion then it shouldn't matter to you. The BU coins you will buy from them will NOT be damaged though and that's why the premiums are higher. Also, most people who buy Proofs want the packaging as Proof tends to be a collectors item with a COA, a pretty box, an outer box, and other such frills. These Proofs they are selling do NOT come with the packaging, so, that's considered a "damage" to the whole reason people buy Proof altogether - for the presentation.

    Normally, Proof coins ARE more expensive.

    Remember to read the small print - or in this case - just the Product Description! ;)
     
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