Comparing the long-running American Gold Eagle Coins to the more recent U.S. Gold Buffalo Coins requires attention to several distinguishing factors. Frankly, aesthetics is relatively unimportant for investment purposes because it is subjective and not easily measured, but it is included in the factors discussed here nonetheless. While distinct advantages may present themselves in this discussion, both Gold Buffalos and American Gold Eagles are exceptionally beautiful coins in their own right and offer value to the right investor.
After reviewing the following eight points, you should agree that for an investment in gold bullion coinage, the benefits of buying Gold Buffalos outweigh the American Gold Eagle. However, for a more survivalist line of thinking regarding potential use as precious metals currency, American Eagles can make more sense.
Here, we thoroughly explain why…
Gold Purity — The gold fineness in the Gold Buffalo is ‘pure gold,’ which means it contains almost no other metals and is 99.99% 24k. The American Eagles are 91.67% 22k gold plus the balance in copper and silver alloy. Investors increasingly lean toward pure gold in their coin investments, and Gold Buffalos are preferred.
Wear Resistance – Surface durability is important if coins are repeatedly handled or not stored and transported securely. For holdings where coins are not unduly disturbed, wear resistance is of no consequence. As such, adding an alloy to gold to improve durability does not offer a benefit unless the coins will be exchanged or transported frequently. If so, the American Eagle, with the hardening alloys of copper and silver, would present an advantage in this instance. For use as a ‘medium of exchange’ or a currency substitute, the American Eagle is better. Still, one ounce is excessive for typical transactions, so fractional ounces of a quarter to a tenth of an ounce are better to own for that purpose.
Popularity — Without a doubt, the current view of Gold Buffalos vs. American Eagles indicates that Eagles are more popular to own. From 2006 to 2023, Eagle “mintages”were produced and sold at an average rate three times that of Gold Buffalos. Annual mintages averaged 666,724 for 1 oz Gold Eagles and 217,390 for Gold Buffalos.
Longevity – The American Gold Eagle entered the precious metals marketplace twenty years before Buffalos. Although Gold Buffalos are no longer considered a new addition to the gold market, longevity does lead to the next important factor: recognizability.
Recognizability – Because of its widespread longevity and popularity, the American Gold Eagle is arguably one of the most recognizable coins worldwide. This recognition stems from its design, which replicates the final version of the United States St. Gaudens $20 gold piece. The term “recognizability” refers to the coin’s familiarity and acceptance in global markets, factors that can enhance liquidity and value. While this global recognition is a benefit for exchange and liquidity on a global scale, it means very little to American investors seeking a larger bullion hoard.
Popularity & Recognizability Trend – Though often overlooked, one key factor for investors to consider when determining which U.S. gold bullion coin is better is to analyze the trend in Popularity & Recognizability. In the first 16 years, from 2006 through 2021, the new gold buffalo mintage was 30% of the more established American Gold Eagle coin. However, in 2022 and 2023, the gold buffalo mintage was 45% of American Gold Eagles, suggesting a 50% increase in relative buying and popularity. Furthermore, people now widely recognize the newer United States bullion coin’s western imagery across the globe.
Lower Supply — The Gold Buffalo’s mintage is significantly smaller than that of the American Gold Eagle. The outstanding global supply is just one-sixth, or 17%, of 1 oz Eagles, suggesting limited availability. This exclusivity, coupled with an increasing trend of popularity and recognizability, suggests stronger liquidation valuations, favoring the Gold Buffalo coins.
Purchasing Costs and Selling Worth — For the most part, purchasing costs and selling values are the same for both U.S. gold bullion coins. However, as discussed above, Gold Buffalo coins have the advantage of being pure 24k and having an attractive trend toward greater popularity and lower ‘outstanding supply,’ or the number of coins available in the market. The Buffalo gold coin currently appears better for investors as long as buying costs are close.
Both the Gold Buffalo and the American Gold Eagle are exceptional investment bullion coins. Because of its increased purity, growing popularity, and lower supply, the Gold Buffalo currently stands out as the better coin to most investors, provided handling durability is not an issue. This apparent increase in preference and demand for the Gold Buffalo against outstanding supplies should theoretically manifest in more robust market valuations.
Contact your Monex account representative to discuss which gold coin is better for your investment strategy.
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