Gold Buffalo vs. Gold Eagle

From what I have read the gold eagle is 22k and the gold buffalo is 24k, correct? So why can you buy them for the exact same price? Shouldn't gold eagles be approx 22/24 the cost of gold, with the gold buffalos being full price? Thanks for the help.

 

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I believe both contain 1 troy ounce of pure gold. The eagle will be a bit heavier because it contains some silver and copper.

 

1 oz. Gold Eagles are 22 karat gold. The composition is comprised of 91.67% gold, 3% silver, and 5.33% copper.
The one ounce coin is 1.287 inches in diameter, has a weight of 1.0909 ounces, and contains on ounce of gold.

1 oz. Gold Buffaloes are 24 karat (.9999) fine gold. Each coin contains its stated weight in pure gold.
The weight, content, and purity of each coin is guaranteed by the United States Government.
The one ounce coins have a weight of 1.0001 ounces, diameter of 32.70 mm, and thickness of 2.95 mm.


It might help if we know which bullion/coin dealer(s) are you referring to? As of this writing, Apmex is currently listing the two 2010 dated bullion AGE/AGB coins at the same price point but Provident Metals is not, a few dollars difference. It may depend upon several factors like, the cost of the bullion to the dealer and what sort of profit they stand to make on resale, the volume of inventory or sales they are doing, attempt to move AGBs if they are not moving at a priced higher than AGEs since many investors/collectors who buy AGEs are more familiar with the AGE program than the AGB program, et al.

 

So, theoretically, the gold eagle is the better deal since you get 1 ounce of gold plus some silver. People, I think, prefer owning the 24 karat gold due to its purity.

 

Krispy... You impress me all the time

 

absolutely! Nice post, krispy!

 

Thanks guys. To be fair, I quickly cited coin specs from sources (links provided above), which were written by others who made the info readily available online for our hobby. I'm sure we have a lot of guys here who will add further in depth reasoning/theories behind the pricing which I'd like to read about too. It's an interesting topic that I'm glad the OP raised. :thumb:

 

If looking for long term investment, I would always choose the buffalo. Internationally most bullion is .999, not .90, so I would think it should be a better longer term hold prospect. I know the .90 will have copper and silver for "free", but the demand will always be higher for .999 pure.

Just a thought.

 

In 2008 the US Mint tried a couple of marketing ploys with the collectible 24k AGB coins. At the time the Mint had also just introduced fractional AGB coins, the first year for these since the gold buffalo coin program began in 2006. In one incarnation, the Mint offered the 24k 1 oz. 2008 American Buffalo Celebration Coin suggesting it as "the first product to be introduced in the series and is being launched in time for the 2008 Lunar New Year – a traditionally important gift-giving time of year for Asian-Americans" The US Mint went on in another package-oriented marketing scheme to offer the 8-8-08 Double Prosperity set, which contained two one-half ounce gold coins, an American Eagle Uncirculated Gold Coin (22k) and an American Buffalo Uncirculated Gold Coin (24k). The concept here, once again, being that, "The number "8" is traditionally associated with wealth and prosperity in Asian cultures. Furthermore, this date only occurs once every 100 years." These sales tactics were used to solicit to a particular demographic, one that the Mint thought they might appeal to, helping boost popularity with the, then still new, AGB coin program and based this on certain assumptions that Asians and/or Asian-Americans would be particularly drawn to these coins due to the use of pure 24 karat gold, a red box in one format and two (double) '08 coins in another, both in gold. While the Mint toyed with these cultural notions they were really laying the ground work for the existence of 24k gold coins that they were committed to offering. The Mint despite their ploys and large retail mark up for collector versions of coins, had the double prosperity coins selling together under one bundled price which had little to do with pricing a bargain on the value of actual compositional purity. These collector version coins were very successful but not for their retail price nor the marketing reasons noted above, rather for their limited mintage and new collector driven interest. This success helped establish the AGB coins in the mind set of collectors and investors alike.

For all intents and purposes, with the 24k AGB (bullion as well as collector versions) the Mint is actually competing with other nations' bullion products like Canada's .9999 fine pure gold Maple Leaf coins. The US did not previously have a 24k pure gold coin to offer and simply wanted to branch out, stealing away a piece of this market. Chief amongst that market the Mint sought to utilize marketing efforts of their new 24k gold coins to the Asian-American collectors and investors of gold coin.

Compare the price of the AGB 1 oz. bullion coin (non-collector version) to that of the 1 oz. Canadian Maple Leaf and you will often find that even selling a foreign issue of gold coin in the US, most domestic dealers are offering the Canadian 24k pure gold coin for less than you can acquire the AGB 1 oz. 24k gold. I believe that in terms of what you should buy for investment purposes is the finest purity coin backed by a sovereign nation for the lowest price you can acquire the bullion for, because they will be the easiest to liquidate should you need to sell. In this light the Maple Leaf is the better buy although the AGB quickly rose to carry with it a reputation backed by the USA that investors demand, proven by years of success with the AGE program.

The increased price over spot one must pay for the AGB from bullion dealers seems to carry with it some extra mark up the Mint is charging dealers and in turn to the investor due to this quickly acquired reputation and demand for the coins. Despite a similar purity of gold coin, the Canadian Maple Leaf, US coins continue to command a higher premium over spot than it's long established competitor of pure 24k bullion gold coins. This happens even though Canada is a well known, stable nation offering bullion products, and at a lower price point.

For resale the AGB then seems to prove the easiest and most familiar with dealers/collectors to accept or liquidate and recover a higher premium while the Canadian coin is equal in every regard but a slightly better price, priced less over spot than AGBs. It's hard to suggest which coin to purchase but both are probably easier to liquidate than are 1 oz. 24k gold bars with an even lower price over spot but not backed by a government.

It's really up to the individual investor to weigh these seemingly minor differences and reasons for which to invest in, which 'risk' to take and what best interest is being served them by paying a bit more or less for choosing one over another. Aesthetic reasons should not interfere but they probably do for some investors. Being wise to the other factors of what helps make these coins easy to liquidate when you need to is a most important one to remember even though it is impossible to know which will be more accepted later on for resale. Having narrowed it down to these choices, it appears pretty safe which ever way you elect to go.

 

Actually this isn't the case for gold coins. Historically almost all gold coins were made with 22 carat gold as the alloy with copper/silver or just copper, makes the coin hard enough to use for commerce. 24 carat gold coins could not be used for trade as the gold is so soft the coin would be easily damaged. It's the same reason that gold jewelry is almost never 24K gold. This is the same for international and domestic coins. The only significant difference would be with the alloy materials.

In modern times one of the most internationally accepted and well known coins, The Krugerrand, is 22 carat gold. It was really the first modern bullion coin and when the US Mint started making Eagles in '86 it used the old formula for crown gold that was found in US coins in the up until some time in the late 1800s. (they switched to all copper until gold was made illegal to own in 1933) Another, very long running bullion coin, the British Sovereign is also 22 carat. I believe it was the Canadian mint that came up with the first 24 carat gold coin that was generally available in modern times. It was introduced by that mint in the late 70s to compete against the Krugerrand and the the Canadian mint with with 24K gold to distinguish it from the 22 carat Krugerrand.

For a long time this was the only 24K coin but other mints came out with competing coins. i.e. The Buffalo, The Panda, etc. IMO, if you are talking about these coins from strictly a bullion basis, then it it won't make any difference in the price that you will get when you sell it. A 22 carat coin is just as valuable as a 24 carat one. You may see a numismatic difference, but that really has more to do with the rarity of the coin and/or aesthetic qualities.

 

Thanks to everyone for the responses! krispy - I am just referring to what I see from Coast to Coast Coins, that's where I have been buying my coins from. It makes sense that the 22 karat coin still has an ounce of gold, thank you for your help!

 

In that case you might like to read this recent thread: Online dealer review: Coast to Coast Coins

 

I just ordered some individual proof quarters from them to make a set 1960-1998, I wasn't too happy with most of them.. So for the dates that I didn't get in the first order I ordered whole proof sets that I am going to break open to get the quarters out. I already received the proof sets. Is there any reason not to buy proof sets from them if I am intending on breaking them open? I looked at the list of dealers and they all appear to be for rare coins, I'm just looking for your everyday proofs, and other inexpensive sets. What would you recommend?

 

more importantly, the 24k is softer and easier to damage. it is also a better gold.

the 22k is harder (barely) and not as easy to damage. not as good gold.

the higher the karats, the more valuable and the more fragile

 

@ mach330: Since most past year sets are coming from the secondary market, any dealer will have looked them over and priced the sets they have accordingly or if having already pulled the sets for individual coins worth grading, you wouldn't even see these sets on sale, unless marked up. The same goes for many eBay stores/dealers and individual collectors listing set on eBay, they've already given them the once over. This is not to say that you will not get nice coins or potentially receive coins which could grade high if submitted to a TPG, not suggesting that you even aspire to do this with coins in your collection.

My recommendation would be to only buy new sets direct from the US Mint in the year of issue and as close to the release date as possible to avoid receiving someone else's returns AND to only buy past years sets that you can examine in person, in a dealers shop, at a coin show or that you are certain have never been opened from their US Mint Original Govt. Packaging (OGP). This will save you a lot time, upset and money in the long run, even if it takes you longer to build your collection. At least this way you will have laid eyes on each piece before plunking down your money.

Not sure if you know mintproducts.com, but many here on CT have good reviews of the company and they also sell Proof sets, if you are looking for a reputable dealer and cannot find what you are looking for in person, at a shop or at a show.

 

You teach 'em real good... but not quite correct in how you put it.

Gold is gold. It comes out of the earth a pure element, 24k. Yes, it's soft and easily damaged, it is also typically yellowish in this pure state. Gold is blended with other metals to create an alloy. This also changes it's color and strength for different applications. There's no difference in the gold itself in a piece marked 24k to that of 22k. So there is no good or bad gold in that sense. The karat indicates the alloy, the other metals blended with the gold.

 

ty for updated knowledge

 

Yer welcome.

 

Except for the fact that higher purity is always more in demand than lower purity. This is why sterling silver has such a low price versus pure silver, its low alloy makes it hard for the smelters to come up with their end product. Its easy to add to gold and come up with a ratio you want, its much harder to separate out copper and silver from gold. Therefor, .999 gold will always be in more demand from smelters, and given higher demand, should come a premium, or at least less of a discount. This is precisely why most international bullion is sold as .999, since the investors understand this.

 

Coupled with that is the backing of the governments minting these coins and the 'guarantee' of that bullion's purity which investors demand. A so called pure gold coin by an unknown mint, mine or refiner for instance doesn't carry the same market acceptability and demand as do govt issued bullion. Therefore govt issued bullion is more liquid than are bullion from private mints with smaller output and a smaller collector/investor base of awareness of the private mint's reputation.