Gold Buffalo Coins:

American Buffalo Gold Coins

The first pure gold coins (.9999 fine, 24-karat) ever struck by the United States Mint, 1-oz Gold Buffalo coins carry a $50 legal tender value. American Buffalo Gold Coins can be bought at premiums slightly higher than the premiums on the US Mint's 22-karat Gold Eagles, the world's best-selling gold bullion coins.

Although the Mint produces four sizes of Gold Eagles, 1-oz, 1/2-oz,1/4-oz and 1/10-oz, American Buffalo Gold Coins are available in only one size: 1-oz.

A resounding success

First minted in 2006, American Buffalo Gold Coins have been a resounding success. With only seven months of production in 2006, the Mint sold 323,000 coins. By comparison, the Mint sold only 201,500 one-ounce Gold Eagles, the world's best selling gold bullion coins, for all 2006. In 2007, the Mint sold 167,500 Gold Buffaloes; in 2008, 172,000 and in October 2009, the first month of Gold Buffalo sales, 116,500.

The success of the Gold Buffalo Coins was because of two factors: the immense popularity of the coin's design and huge promotions by telemarketers.

These coins carry the famed Buffalo-Indian Head design that graced the American nickel 1913-1934. The Buffalo-Indian Head design is as much identified with American coinage as is the Walking Liberty that graced the popular Walking Liberty half-dollars 1916-1947.

Highly promoted

With the Buffalo-Indian Head design being used on an American coin for the first time in seventy-two years, telemarketers jumped all over the coins. Most of the 2006 coins were sent to grading services where they were "slabbed," as putting a graded coin in a plastic holder is called. Then the telemarketers promoted, at huge markups, the "slabbed" American Gold Buffalos as First Strike Coins.

Immediately following the coins' release, telemarketers were selling MS69 First Strike Gold Buffalo Coins at hundreds of dollars above the market for bullion coins. The MS70 First Strike Gold Buffalo Coins were hawked at $1500 premiums. Fortunately for investors, the promotions at those prices did not last long because many more Gold Buffalo Coins were slabbed than the telemarketers could sell.

Premiums collapsed on slabbed Gold Buffalos as dealers cut prices drastically to recapture their investments. For a time, MS69 First Strike Gold Buffalo Coins could be bought at only $7 each above Gold Buffalo Coins in original US Mint packaging.

By the spring of 2007, the second year of the Gold Buffalos' production, premiums on MS69 First Strike Gold Buffalo Coins had risen to only $15 each over regular Gold Buffalo Coins in US Mint packaging. The MS70 First Strike Gold Buffalo Coins, which had been promoted at $1500 premiums, could be bought at only $120 or so over regular US Mint packaged Gold Buffalo Coins.

In September 2006, shortly after the Gold Buffalos were released, we posted an expose of "First Strike" coins on this site, titled First Strike Coins or Strikeout Coins? We think that the article was one of the major reasons that today "First Strike" coins are now called "Early Release" coins, which the telemarketers now promote.

Gold Buffalo Coin packaging

Although American Gold Buffalo Coins are aimed at investors who prefer pure gold coins, the packaging of the coins is not suitable for investors. The Mint seals the coins in Mylar sheets approximately 16" X 12", twenty coins to a sheet, five horizontally by four vertically. The packaging makes shipping and storage problematic, and the coins often come out of their Mylar packaging.

Additionally, when small investors want less than twenty coins, the coins have to be cut out of the sheets. Actually, minimal handling often results in the coins coming out of the packaging. By contrast, the 1-oz Gold Eagles are packaged twenty coins to a tube, making them easy to ship and store.

American Buffalo Coins mint box

A "Mint box" of Buffalos contains 500 coins and measures 17-1/2" X 12-1/2" X 4". Unlike a Gold Eagle Mint box, which is a rubber-like plastic, a Mint box of 500 American Gold Buffalo Coins is cardboard.

American Buffalo Gold Coins are magnificent coins. However, because of their packaging, investor interest in the coins is not great, but the US Mint is enjoying good sales because of telemarketers' promotions. Investors wanting strictly a gold investment should consider going with Gold Eagles or other low-premium gold bullion coins.

If you would like to discuss the American Buffalo Gold Coins or any aspect of gold investing, call us at 800-528-1380. We take calls 7:00 a.m. to 5:00 p.m. MST. The minimum order for American Gold Buffalo Coins is ten coins.

PRINT THIS PAGE