One of the many terms you may hear used regarding coins is Mint State coins and Proof coins. What do each of these mean and what do they mean from an investment standpoint?
Let’s dive into these terms and what they mean.
When looking into precious metals for investing or collecting purposes, you may see some coins with an “MS” grade on it. When broken down, what this means is that the coin in question is a glorified bullion coin. There are hundreds of thousands minted every year and by law, the U.S. Mint must meet the demand for bullion, which in turn results in the high populations. The “MS” grade means that a bullion coin has been graded and is now a certified coin. However, don’t get caught up in the certified aspect of it.
While some Mint State coins can be higher value, most won’t be valued much higher than what the spot price is. Most Mint State coins that are of a higher value are old coins that have survived years of handling and maintained a crisp image and still look relatively new. Another type of Mint State coin that can have a higher value will be ancient coins, anything with a high MS grade on these will have significant value as they are thousands of years old. The last type is the 2009 $20 Ultra High Relief. This is a Mint State coin that has a low mintage (115,178) and an even smaller number in the MS70 grade. These coins were only minted for one year and are in very high demand.
Proof coins are different from Mint State coins as they are minted with more care and attention to detail. The term “Proof” refers to the minting process of the coin and not the condition of the coin. The planchet for proof coins is polished and highly reflective, almost like a mirror finish, while the image on the coin is frosted which makes it stand out even more.
Many people may not know that Proof coins were minted and given to members of Congress, gifted to foreign dignitaries and put on display at special exhibits. They were never meant to be put into circulation and considered to be quite rare.
Modern Proof coins are sold by the U.S. Mint to the public. Minted in Gold, Silver, and Platinum the U.S. Mint may put a limit on production numbers or limited time of production for these Proof coins. Both reasons cause the mintage numbers to be low. Proof coins are made with the intent for collectors and investors and will have a higher premium above the spot price.
Now is the time to determine which of these types of coins is better for your portfolio. As discussed in another article, supply and demand. Look for the coins that have a low population and a high demand and you will be set in a position for precious metals investing.
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