Gold Buffalo Coins approved by Congress
New .9999 fine (24 karat) 1-oz legal tender $50 gold coins will be added to the U.S. Mint’s line of gold bullion coins in 2006 when President Bush signs into law a bill that Congress passed in December. The legislation calls for the Mint to have the coins ready to distribute by June 2006, but the coins may be ready before then.
Indian Head-Buffalo designs mandated
The legislation authorizing the new .9999 fine gold coins was quite specific, mandating the design and even the method of packaging. For the first year of issuance, the coins “shall bear the original designs by James Earle Fraser, ‘which appear on the 5-cent coin commonly referred to as the ‘ Buffalo nickel’ or the ’1913 Type 1′.” This wording, without specifically saying it, calls for the obverse (front) of the coins to carry the famed Indian Head design by Fraser. The reverse will carry the equally-famed buffalo design.
Each Gold Buffalo coin is to be encased in a protective capsule, possibly such as the capsules used by Australia’s Perth Mint to protect its .9999 fine gold bullion coins, including the popular limited edition Lunar Series Gold Bullion Coins. The protective cases “shall be readily distinguishable” from the packaging for proof coins, which are also authorized by the bill.
For years, proof coins have been individually encapsulated in protective cases. Individually encapsulating bullion coins will be new to the U.S. Mint. The Mint’s 22-karat (.9167 fine) American Gold Eagles, which are the world’s best-selling gold bullion coins, are packaged twenty to a tube and are not individually encapsulated.
Production of the Gold Buffalo coins will be unlimited, and they will be marketed toward gold investors who prefer .9999 fine (24-karat) gold coins. The U.S. Mint already has the world’s best-selling gold bullion coins with its 22-karat (.9176 fine) Gold Eagles. Still, there is a huge market for pure gold coins , and the new Gold Buffalo coins will give the U.S. Mint a product for that market. The Asian and Indian markets clearly prefer pure gold coins , while alloyed gold coins are more popular in the Western World.
Presently, the Royal Canadian Mint’s .9999 fine Gold Maple Leafs are the world’s best selling pure gold coins . However, the Gold Maple Leafs have fallen into disfavor with investors because of the ease with which they are damaged. To counter this, the Royal Canadian Mint recently introduced new packaging for the 1-oz Gold Maple Leafs.
The new packaging for the 1-oz Gold Maple Leafs will put the coins individually in capsules that are suspended in credit card sizes cards, twenty-five coins to a box. It is too early to gauge market acceptance of the new packaging for the Gold Maple Leafs.
Considering the popularity of the of Gold Buffalo design, the U.S. Mint’s new .9999 fine gold coins could provide stiff competition for the Gold Maple Leafs. Fraser’s designs proved to be a winner in 2001 when the U.S. Mint produced a limited number of Gold Buffalo $1 silver coins sets. The sets sold out immediately and today carry prices several times their initial offering prices.
The new Gold Buffalo .9999 fine gold coins , however, will not be limited edition, at least not the first year. The bill permits the Mint to “change the maximum number of coins issued” in subsequent years. Further, the bill authorizes the Mint to change the designs on either the obverse or the reverse after the first year’s production.
Although the U.S. Mint produces its popular American Gold Eagles in four sizes, 1-oz, Â½-oz, Â¼-oz, and 1/10-oz, the new Gold Buffalo pure gold coins will be minted in only one size: 1-ounce. With the popular Indian Head and Buffalo designs, the Mint’s new .9999 fine gold coins could quickly become favorites with gold coin investors.