Gold bullion has performed exceptionally well this century. On average, physical gold has appreciated 10% year over year in these two and a half decades. The United States Mint’s bullion coins have closely mirrored this trend. For the period that the Gold Buffalo has been in circulation this century, it has appreciated 8% on an average year-over-year basis, showcasing a robust market. The Gold Buffalo Coin is a compelling investment option, particularly for those seeking to diversify their portfolio with alternative assets.
As detailed in our explanation of why Gold Buffalo Coins are better than American Eagles, the key factor considered is the similarity in purchase prices. Over Gold Buffalo’s 18+ years, they have been slightly more expensive to buy than American Eagles and are worth slightly more to sell on average. Therefore, it seems that as an investment to own as an alternative asset for diversification, along with gaining the convenience of coins, Gold Buffalos are a smart way to go.
However, it’s important to note two periods of distortion that warrant a second look and may discourage potential investors from owning pure gold Buffalos instead of 22k Eagles. In 2006, the Buffalo’s first year of issue saw overly zealous collector speculation that did not warrant the higher premium over Eagles. Then, in 2010, Eagles were plentiful and relatively cheaper than Buffalos, potentially spelling worthwhile savings.
That said, Gold Buffalo Coins have proven their resilience even during market anomalies. For instance, when coin premiums were unusually high or low, Monex customers leveraged the flexibility of trading with bullion bars to arbitrage the opportunity. This was evident during the COVID anomaly, when coin premiums were comparatively high due to gold coin supply chain challenges and increased investor demand, further solidifying the trust in Gold Buffalo Coins as a reliable investment option.
All in all, Gold Buffalo Coins are a great choice as an alternative investment and potential hedge against the dollar’s devaluation and other investor concerns, especially when one prefers to buy American.
When judging the performance of American Buffalo Gold Coins, you need to factor in the relative buying costs and relative selling values over time. Let us view Gold Buffalos in light of the Top 5 bullion coins and gold bullion traded at Monex. You cannot compare products to a global spot price because it differs across dealers, whereby many quote buying and selling prices versus one spot figure.
Since its inception in 2006, Gold Buffalos have been worth more than all the other top bullion coins. Buffalo’s bid price has averaged about 1.25%- 1.4% more than the Maple Leaf, Philharmonic and Krugerrand, which was $17-$19 per coin more on average. Buffalos have been worth slightly more than American Eagles, averaging .15% more. The Gold Buffalo has averaged about 2.5% greater in relation to gold bullion trading bid prices.
So it seems that gold Buffalos have been worth more when selling, but how much did they cost investors at the time of acquisition?
On average, pure Gold Buffalos have had a higher cost, meaning the ask price for them has been more than the ask price for each of the other top bullion coins. Buffalo ask prices have averaged about 1.25% to 1.36% more than the Maple Leaf, Philharmonic and Krugerrand, which averaged $18 to $19.4 more per coin. Some coin investors choose these other coins for cost savings. A Buffalo’s cost has been slightly greater than an American Eagle’s, averaging .15% more. However, in relation to gold bullion trading bid prices, the Gold Buffalo has averaged about 4% greater, which is why many gold bullion traders prefer the Atlas Monex bullion avenue over coins.
Call your Monex Account Representative to better understand gold investment products today.
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