What is a Proof Coin and How to Tell?
Coins made of gold, silver, and other precious metals have an inherent value that regular currency does not possess. But not all precious metal coins are the same. In other words, gold and silver coins of equivalent weight and size could be priced differently.
Besides the historical significance or rarity of the coins, there are a few other aspects that ascertain prices. If the coin was not part of the circulation, for instance, it could be a lot more precious in the eyes of coin collectors and investors than standard coins.
Proof coins are one of the uncirculated kinds that are deemed valuable for multiple reasons. In this article, you’ll learn what those reasons are or why proof coins have a special place. The following are the topics covered:
- A complete overview of proof coins (how they are made, packaged, graded, etc.)
- How they stack up against uncirculated coins, and much more.
If you’ve never come across the term “proof coin”, this article will be your gold mine of information on an important topic. And even if you are familiar with proof coins or precious metal investments in general, this write-up shall still present you with new, invaluable information.
Table of Contents
Proof Coin: A Complete Overview
Proof coins are samples for regular-issue coins. The phrase “proof coinage” denotes different samples of the coins issued. Several coin issues have had their roots in proof coins. Proof coins were/are made by the Royal Mint, the United States Mint, and several other government-owned mints across the globe.
Proof coins were historically manufactured to check whether the coining press and proof die were working correctly. Once proof coins are minted to specifications, the regular coin-making process begins.
For instance, the U.S. Mint or the Royal Mint director will inspect the test coins made and approve or reject them before a massive batch of coins is ordered for minting. The coins are also manufactured for archiving and preservation purposes.
Proof coins are not made every year or on a schedule. The United States, for instance, primarily stopped making them in 1916. Between 1936 and 1942, the American mint accepted individual orders. Proof coins can now be ordered as complete sets only.
Read More: Mexican Gold Coins
The Manufacturing Process
Proof coins look unique because the coins are struck differently from regular and bullion coins. The dies are polished beforehand to ensure high-quality strikes. The polishing process entails using chemicals, which help make certain portions of the coin’s design look frosted.
Proof coins are struck two times at least under higher pressure than usual so that intricate details come to the fore. During the early 19th century, the production methods weren’t as sophisticated as they are currently. That means much older proof coins developed scratches at the minting process phase itself.
Kindly note, the term “proof” denotes the manufacturing process and not the coin’s condition.
Looks and Finishing
The thing that sets apart proof coins from other coins is the former’s striking appearance.
The coins could be easily distinguished from regular coins with their unique design. The shiny rear and the sharper rims are dead giveaways. Most other coins, including uncirculated coins, do not have that gloss.
Packaging and Contents
Proof coins came in cellophane bags between 1950 and 1955 to maintain their looks. Cellophane is a transparent, thin sheet made from regenerated cellulose. The material’s claim to fame is its ability to not let in air, greases, oils, water, bacteria, etc., within.
From 1955, proof coins came in flat packs, sealed in cellophane, inside an envelope. The packaging method was in place till 1964, post which various hard plasticized cases were used to lock in the coins.
What is a coin proof set? The double-struck coins came as a set. They were rarely sold as individual coins. The following are the years during which they were/are available:
- Between 1936 and 1972, six-coin and five-coin sets were available, comprising a nickel, cent, quarter, dime, and half a dollar.
- Starting from 1973 and until 1981 and post-2000, a dollar coin was added to the mix.
- The proof sets from 1999 to 2008 consisted of five unique 50 State quarters.
- A couple of Clark and Lewis nickels were thrown in the 2004 to 2005 series.
- The 2007 to 2016 sets also included Presidential dollars.
- The sets from 2010 to 2021 comprise “America the beautiful quarters”, depicting various monuments and national parks.
The coin is typically sold as proof sets, which come with the official certificate of authenticity from the U.S. Mint.
Also, certain sets may be put together by some third parties to include specific coins that may not be readily available in the government-issued assortments.
Grading
Not all proof coins are in the same physical condition. Though the packaging and meticulous handling render the coins almost impervious to dings and dangs, not all proof coins are spotless and speckless. As mentioned earlier, older proof coins may not be as clean as their contemporary counterparts.
Certification agencies grade and allocate alphanumeric ratings to the coins. A PR70 grade is considered the highest, denoting “perfect condition”. A PR69 status is deemed low, imputing deficiencies in the striking, detailing, and other physical characteristics of the piece.
How Do Uncirculated Coins Compare to Proof Coins?
The U.S. Mint manufactures different types of coins. Primarily, there are four coin types: circulating, uncirculated, proof, and bullion coins. (We’ll not be discussing currency and bullion coins here).
Contrary to general perception, the different pennies the U.S. Mint makes differ from each other at the manufacturing phase itself. The disparities in the materials used and the designs come in only later.
What is an uncirculated coin? An uncirculated coin is modeled after every coin that enters circulation during a given year. Uncirculated coins are not meant for use as fiat money and are packaged specially for collectors. But it’s not wrong or illegal to use it as currency. Not to mention, uncirculated coins are highly collectible.
The United States Mint has been producing uncirculated coins since 1947. Because the coins are “uncirculated”, they are usually devoid of scratches and usage marks typically identified with circulating coins. That implies the uncirculated variants are almost always in mint condition.
All of the above might indicate proof and uncirculated coins are the same. But that’s not the case. The following are ways in which the two differ from each other:
Manufacturing
Uncirculated coins are struck the same way as circulated coins but on specialty blanks or specially burnished blanks. The brilliant uncirculated coins are specially treated to achieve their trademark matte-like, soft appearance.
The coins are subjected to a marginally higher coining force, special cleaning post-stamping, and early die striking. When compared to proof coins, uncirculated coins aren’t hand-polished, and the inspection process is usually not as meticulous.
The Looks and Grading
Compared to proof coins, uncirculated coins are not as flashy, but they certainly do not look typical.
Unlike proof coins, uncirculated coins have an identical finish on both sides. They have a sheen to them, which sits somewhere between “glossy” and “frosted”. And because the coins do not undergo rigorous inspection, a blemish or two cannot be completely ruled out with them.
Like proof coins, uncirculated coins are also graded for their physical condition. The grading system or range starts from AG-3 (About Good) to MS-70 (Perfect Uncirculated).
Cost of Purchase
Typically, proof coins are considered superior or higher than the most fancy-looking or most brilliant uncirculated coins.
Besides the appearance, the fact that a proof coin is made in lesser numbers than an uncirculated coin is also why proof coins come for a slight premium. If you were curious, fewer proof coins are made each year due to their complex manufacturing requirements.
The making process brings down production volumes, but the intricacies attached to the making also mean the requirement for highly-skilled, aka expensive labor. The maker’s margins are also higher on proof coins.
Why is a Proof Coin Desirable Over Uncirculated Coins?
Both proof and uncirculated coins are more desirable than your regular gold and silver coins. But there are a few things that give proof coins an upper hand over the uncirculated kind.
Spotless Look
Generally, an avid coin collector would find a proof coin more desirable due to the attention to detail and the craftsmanship involved. The “shininess” synonymous with proof coins cannot be replicated, thanks to the unique methods used to produce proof coins.
In other words, a proof coin is a specially made coin, or the production process is highly meticulous. In other words, do not be under the impression that you could buy uncirculated coins and subject them to special coating to make them look like coins that have come directly from proof blanks.
Because proof coins are made in fewer numbers and rarer, the premium tag gets associated with them instantly and automatically.
Investor-Friendliness
Due to the traits mentioned above, proof coins are a lot more “investment-friendly,” too. It’s not uncommon for proof gold coins to trade significantly higher than regular gold coins. American Eagle proof coins have been sold at a price three times higher than the spot price of gold in the past.
Read More: How Much Does it Cost to Get a Coin Graded
Conclusion
People looking to invest in gold and silver coins don’t care whether the article is “proof” or “uncirculated”. Between gold and silver coins, they’ll most likely purchase gold bullion coins.
But if you are one of those buyers who care more about the story or historicity behind the item, you may sway more toward proof coins. Just make sure you know which period those coins belong to, their significance, etc.
Gold and silver proof coins aren’t the only way to invest in precious metals. There’s another route in the form of bullion coins or IRA-approved precious metal coins. Click here to learn more about precious metals.
Proor Coin FAQs
Can proof coins be used as currency?
Proof coins can be considered legal tender if they have served as the sample for coins already in circulation. But it’s not recommended to use proof coins as fiat money as they are more valuable than their face value.
How important is it for proof coins to remain in their original packaging?
Proof coins sold as a set or within their original packaging are more valuable than coins sold individually. When sold without its protective casing, the coin gets perceived as not being in mint condition. And the case has its value since it is produced by the United States Mint or the Royal Mint with the mint mark or the particular mint’s terminology. A proof coin without its casing can be likened to a luxury watch without its original box and papers.
What is a reverse proof coin?
A reverse proof coin is a proof coin with its finishing interchanged or inverted. In other words, the coin’s background is frosted, and the design elements are polished to a striking gloss. What is a gold proof? It’s a proof coin made of gold.
Are there “proof notes”?
Proof or specimen banknotes exist too. However, they are not as collectible or desirable since they are only made of paper. In other words, they carry no melt value. Besides not being intrinsically valuable, unlike gold and silver, paper can also deteriorate if not taken good care of.
