History of the Buffalo Gold Coin

The United States government and Congress authorized the American Buffalo Gold proof coin through the Presidential $1 Coin Act 2005. This act aimed to revitalize the design of United States coins and return circulating coinage to its historical and aesthetic origins. While the main focus of the act was on dollar coins, it also provided for the production of the first-ever 24-karat gold coin in the United States.

James Earle Fraser’s design for the Buffalo Nickel, which was in circulation from 1913 to 1938, was chosen as the design for the new coin. Fraser’s design is renowned for its American imagery, depicting a Native American figure on the obverse and an American buffalo on the reverse. 

The U.S. Mint started selling the American Buffalo Gold Coins to the public on June 22, 2006. As a 24-karat, .9999 fine gold bullion coin, it offered a competitive alternative to other international 24-karat gold coins, like the Canadian Maple Leaf.

The American Buffalo quickly became popular among collectors for its purity and iconic, historically-significant design. Since its inception, the coin has been minted in various denominations and forms, including proof and uncirculated versions.

The First Ever 24-Karat Gold Coin From the U.S. Mint

The American Buffalo Gold Coin, the first-ever 24-karat gold coin produced by the U.S. Mint, marks an essential milestone in the history of U.S. coinage. Before the introduction of the American Buffalo, the U.S. Mint produced only 22-karat gold coins, such as the American Gold Eagle. While 22-karat gold is durable and stands up well to handling and circulation, there was a global market demand for 24-karat gold coins that the U.S. Mint needed to serve. 

This demand was being met by international mints, such as the Royal Canadian Mint with their Gold Maple Leaf coin. In response, the U.S. produced a coin to directly compete with these 24-karat coins and meet the market’s demand. The Presidential $1 Coin Act of 2005 paved the way for creating a 24-karat gold coin, and the American Buffalo was the result. 

The coin was named the “American Buffalo” because it depicted a buffalo or bison on the reverse. The design is a tribute to the classic Buffalo Nickel by James Earle Fraser, which was circulated from 1913 to 1938. The obverse of the coin features a profile of a Native American figure.

The first American Buffalo coins were struck and made available to the public by the U.S. Mint in 2006. Despite being more expensive than their 22-karat counterparts, these coins were met with significant demand due to their .9999 pure gold content and nostalgic design.

The American Buffalo Gold Coin is available in both proof and uncirculated versions, and it continues to be an attractive option for collectors seeking gold coins of the highest purity.

Yearly Limited Maximum Mintage

The limited maximum mintage of the American Buffalo Gold Coin (or any coin, for that matter) creates a sense of scarcity, which can increase the coin’s desirability and potential future value. Limited mintage is a common tactic used by mints worldwide to enhance a coin’s collectibility.

From an asset standpoint, limited mintage can potentially lead to greater returns in the future, particularly if demand for the coin remains strong or increases. Coins with lower mintages are often more difficult to find in the secondary market, which can drive up prices as collectors and people interested in its economic value compete for the limited supply. 

From a collector’s perspective, coins with limited mintage can offer the satisfaction of owning something unique and rare. Many coin collectors derive enjoyment not only from the aesthetics and history of the coins they collect but also from the challenges of acquiring coins that are not easily obtainable.  

The limited mintage does not necessarily affect the bullion value of the coin- that is, the value of the coin’s gold content- but it can significantly affect the coin’s numismatic value or the value that collectors assign to the coin above and beyond its bullion value. This can be influenced by factors such as rarity, condition, and demand among collectors. 

However, it’s also important to note that not all coins with limited mintage will necessarily appreciate. The future value of a currency also depends on factors such as the overall state of the economy, interest in coin collecting, and changes in cultural tastes and interests. 

Denomination and Gold Content 

The American Buffalo Gold Coin carries a face value of $50. However, because the coin is made from one troy ounce of 24-karat, .9999 fine gold, its intrinsic value is generally much higher, fluctuating with the price of gold in international markets. 

It’s important to note that while the face value is a testament to its legal tender status, people typically buy these coins for their gold content and collectibility, not their face value. As such, the actual market value of the currency usually far exceeds its denomination.

The Purity of the Buffalo Gold Coin

As mentioned, the American Buffalo Gold Coin is minted from .9999 fine gold, often referred to as 24-karat gold. The term “karat” indicates gold’s purity, with 24-karat representing pure gold. 

Therefore, .9999 fine gold indicated that the coin is 99.99% pure gold, with just a tiny fraction (.01%) of other metals. This purity level is the highest available for gold coins, and it signifies that the American Buffalo Gold Coin contains virtually no alloy metals.  

Before the American Buffalo was introduced, all gold coins produced by the U.S. Mint were 22-karat gold, such as the American Gold Eagle Coin. A 22-karat gold coin contains 91.67% gold, with the remaining 8.33% of other metal alloys, typically copper or silver. These alloy metals were added to make the coins more durable, but they also diluted the purity of the gold. 

The Eligibility of the Buffalo Gold Coin for a Gold IRA

The American Buffalo Gold Coin is eligible for inclusion in a Gold IRA. Gold coins must meet specific standards set by the Internal Revenue Service. The IRS stipulates that gold must be a .995 fine or higher to be eligible, and the American Buffalo Gold Coin, being  .9999 fine gold, exceeds this requirement.

Including gold or other precious metals in a self-directed IRA can provide a hedge against inflation and diversify an asset portfolio. When you buy gold for your IRA, the coins or bullion must be held in custody by an IRS-approved custodian until retirement. 

It’s also important to note that not all types of IRAs can accept gold and other precious metals. If you’re interested in this type of asset, you need to open a self-directed IRA, which allows a broader range of options than traditional or Roth IRAs. 

Obverse

The obverse (front) of the coin depicts a right-facing profile of a Native American figure, a composite created by Fraser to symbolize the spirit of America’s native people. 

Reverse

The reverse (back) of the coin features a left-facing American buffalo, also known as a bison, which is said to be modeled after the “Black Diamond,” a popular attraction in the New York Zoological Gardens in the early part of the 20th century.

The American Buffalo Gold Coin represents a unique blend of historical significance and economic value. As the first 24-karat gold coin produced by the U.S. Mint, it holds a special place in the annals of U.S. coinage. With its iconic design, high purity, and potential appreciation due to its limited mintage, the Buffalo Gold Coin is highly desirable. Before purchasing, potential buyers should consider their financial situation and consult a trusted advisor, like American Hartford Gold.