Bullion & Numismatic Coins: Learn the Differences
Coins fall into three main categories: bullion, numismatic, and semi-numismatic. These three types of coins differ in how they are valued and each has distinct advantages and limitations from an investment standpoint.
Bullion coins are perhaps the best known. Examples of bullion coins are Silver American Eagles and Gold Maple Leafs. The common dominator amongst this coin type is that the value of these coins is derived primarily from its precious metals content. Therefore, the value or price of a bullion coin is very closely related to the spot prices of gold, silver, and sometimes platinum. There is no historical precedent for bullion coins commanding a value much beyond that of the current spot price.
Numismatics is the little known field of rare coins. The Saint Gaudens is arguably the most well-known numismatic coin. By definition, a numismatic coin must have been minted prior to 1933 and can never be reproduced. As one might imagine, over the years, these coins become more and more rare.
This rarity and historical significance has an impact on the value of a coin, often catapulting its worth far beyond that of the current spot price. However, like their bullion counterparts, the numismatic coin type also carries the inherent value of its precious metals content. Thus, its worth is twofold: a function of the current spot price and a premium allocated by its rarity.
Furthermore, a numismatic coin’s condition can also have an impact on its price, because the better the condition, the rarer the specimen is. There are two agencies that formalize and quantify a rare or collectible coin’s condition. One is the Professional Coin Grading Service or PCGS and the other is the Numismatic Guaranty Corporation or NGC. These two entities set the standard for coin grading and house a plethora of historical data on the prices of the numismatic coins over the years.
The last of the three types of coins is the semi-numismatic category. Best known among this class are “proof coins”. These are special versions of the gold and silver eagle coins. They are double struck for improved brilliance, never touched by human hands, encased in a protective container, and come with a certificate of authenticity.
Other examples of semi-numismatic coins are the 2016 Silver and Gold Snow Falcons. The Silver Snow Falcon comes in a unique 1.5 oz size with an attractive heft and thickness. The Gold Snow Falcon comes in a quarter of an ounce. Struck by the Royal Canadian Mint with an exceptional 99.99% purity, the Snow Falcons’ engraving are a handsome alternative to the mint’s typical maple leaf depiction.
In the cases of both the proof and the Snow Falcon coins, their population and availability set them apart from ordinary bullion coins. Proof coins are a limited mintage each year. The Snow Falcon coins are only struck for one year before they are retired. Thus, both have a population that are a fraction of more popular bullion coins.
Like numismatics, semi-numismatic coins also have two opportunities for appreciation: upward movements in the spot price of metals as well as a premium to be commanded by their scarcity in comparison to their contemporary bullion counterparts. Of course, semi-numismatics are not as rare as those struck before 1933 and are not graded by PCGS or NGC. However, they are easier to obtain—especially in uncirculated condition, occupying a middle ground between bullion and numismatic coins.