Understanding the US Mint

If you are new to the world of gold and silver coins, you may wonder if the US Mint is a good place to buy some coins. The US Mint does offer a selection of both gold and silver coins annually and they come with the advantage of being backed for authenticity, weight, and purity by the US government. Also, they provide updated sales figures for gold and silver coins that can be useful information for potential buyers  (find bullion coin sales totals here).

One thing that can be confusing is that the US Mint offers a variety of different versions of their standard gold and silver coins. The basic bullion coins offered every year are the gold and silver eagles and the gold buffalo coins. You can see examples of the various bullion coins offered here. Unfortunately, you cannot directly buy these bullion coins from the US Mint. The bullion coins (the least expensive versions of the coins) are only sold by the US Mint to a group of authorized purchasers. These purchasers are large volume dealers who then allocate or distribute the bullion coins further down the chain to smaller dealers and retailers. The coins are then offered to the public by many different online retailers and also at coin shops and coin shows around the country. You can find a list of some of the well known online retailers here (scroll to the bottom of the page). 

This tiered distribution of these bullion coins means that final consumers can expect to pay a premium over the spot price of gold and silver which will vary from dealer to dealer. When retail supplies of the coins get tight, this premium will rise because dealers have to replace their inventory and will have to offer more to sellers to restock.

Critics of the US Mint at times complain about it's inability to meet consumer demand when that demand is high. Some also complain that they do not offer these bullion versions of the coins for sale directly to the public which would be closer to actual spot prices for gold and silver.

The Mint does offer versions of these coins for sale to the public on it's web site. However the coins offered are special collector versions of the coins and come at a much higher price per coin to the buyer. The Mint can get this higher premium because they make these coins with special finishes and the total mintages for these coins are always much lower than for the bullion coins. This makes them relatively rarer than the bullion coins. The higher price for these coins tends to limit the demand creating lower mintages. 

Sometimes the US Mint sets a maximum mintage limit on special versions of the coins as well. Every now and then, the Mint sets very low maximum mintage limits creating intense public demand and also sharp criticism from collector based publications who feel these very low mintage programs are often abused by opportunistic promoters. They often manage to scoop up a lot of the available coins ahead of regular collectors and then quickly offer them for higher prices in the after market.

Here are links to some of these collector versions of the coins so you can see examples of them as presented for sale on the US Mint web site in 2020:

Gold Eagle Proof Coin (a proof coin has a special mirror like finish, it has a W mint mark)

Gold Eagle Burnished Coin (a burnished coin has a special more muted finish, it has a W mint mark)

Gold Buffalo Proof Coin (made at the West Point Mint, it has a W mint mark)

Silver Eagle Proof Coin (made at the West Point Mint it has a W mint mark)

Silver Eagle Burnished Coin (made at the West Point Mint, has a W mint mark)

More About Mint Marks

If you are new to all this, already it can feel like there are a lot of versions of the same coin to deal with. All these are one ounce gold or silver coins, but the collector versions cost quite a bit more per ounce than the bullion coins (which you cannot even buy directly from the US Mint as explained above).

But there is more (much more) to understand about mint marks. Mint marks are stamped on the coins as a kind of signature of where the coin was made. The US Mint has four primary coin making facilities. They are located in Denver, Philadelphia, San Francisco, and at West Point in New York. You may notice from the links above that most of the collector versions of the coins the Mint sells online are made at the West Point facility. They have a W mint mark stamped on them. The bullion (lower cost) versions of these same coins carry no mint mark, even though they are also normally produced at the West Point mint. So always look at any coin to see if it carries a mint mark. If it does, it will be some kind of collector version of the coin and will have a much lower mintage than the bullion version. As an example, in 2020 the bullion silver eagle total reported mintage was 30,089,500 one ounce coins (per the US Mint). The W mint marked "burnished finish" collector version of this exact same coin was only 154,267 one ounce coins (see item 20EG in this US Mint sales report).

Beyond all this, we have more versions of these same coins that the US Mint offers in some years, but not others. Sometimes the Mint will produce a proof collector version of a silver eagle coin minted at the San Francisco mint facility. That coin will have a S mint mark stamped on it. You can see an example of that version here. The US Mint reported that 191,302 of the S minted coins were sold in 2020 (see item 20EM). Collectors view mint marks on coins (and special finishes) as a different coin in terms of how rare it is while most people not involved in numismatics probably would just think all silver eagles are just an ounce of silver and basically the same coin. It is important to understand this distinction in the marketplace to understand why there are so many price points for "the same coin".

If this is starting to get a bit confusing, that is understandable. For most people who may want to own some gold or silver coins, all they want is the lowest cost version of the coin that is closest to the spot price of gold or silver. So all these other versions of the same coin won't matter to them. But keep in mind that if you are looking at a coin to buy, you do need to understand what you are buying and that all these varieties of the same coin exist. As an example, the "burnished finish" version of the silver eagle looks almost the same as the regular bullion version of the silver eagle. The only way most people could tell them apart is that the "burnished finish" collector version has a W mint mark on the back of it (on the lower left side of the coin). The one with the W stamped on it is viewed by collectors as being nearly 200 times "rarer" than the one with no mint mark, so the W mint mark coins sells for a lot more. But the first time new buyer probably wonders why essentially the same coin would sell at such different prices just because one has a mint mark and the other does not. The point is that the collector market sees these collector version coins as lower mintage and rarer coins.

Wait, there is more in regards to special versions of coins and mint marks. Every now and then the US Mint will produce a "very special" version of these same coins. These will have even more unique finishes and may be produced by mints other than the West Point mint. Also, the Mint may limit the total mintage to be produced and sold. Sometimes the mintages are very low creating very rare examples of these coins in the eyes of collectors where the finish of the coin and the mint mark very much do matter; since they make the coins much more valuable in the marketplace where collectors buy and sell. Here are two recent examples from the US Mint web site to illustrate this:

2019-S (mint mark) Enhanced Reverse Proof (finish) Silver Eagle Coin

Where do I start with this coin? It was made in San Francisco and not at West Point. It has a very different finish called "enhanced reverse proof". This means that a special laser generated die mold was used to make this coin giving it a more enhanced look and also done in reverse proof which means different parts of the coin have the mirror like finish than a normal proof coin (this article explains it). No doubt this is a very beautiful and unique version of the silver eagle. On top of all that, the Mint only set a maximum mintage on this coin of 30.000 (only 29.909 were actually sold per the Mint). This makes it the very rarest version of the silver eagle minted so far since the program began in 1986. You can perhaps imagine the intense interest from buyers all this created. This coin sold out in less than 20 minutes on the Mint web site. Literally the next day, this coin that was sold by the US Mint for $65.95 plus $5 shipping was being sold for more than ten times that price on places like Ebay. Certified versions of the coin (graded in 70 perfect condition) sold for thousands of dollars. One hundred of these coins had a certificate of authenticity hand signed by the US Mint Director. Those sold for even higher prices. Even today, these coins sell for high prices (when you can find them) as you can see here and here and here.

2020 World War II V privy mark (special V for Victory on coin) Proof Gold Eagle

This coin created even more uproar. Notice that only 1,945 of these gold eagle coins were minted. This was to honor the end of World War II in 1945, but of course it also insured that only a tiny handful of people could ever own this special version of the gold eagle coin. This coin sold out in just minutes as well at $2,500 per coin. That was a high premium over the price of gold already. But immediately after this coin sold out, they started for selling for tens of thousands of dollars each in the after market. This kind of situation created by the US Mint by its own mintage limit policies has caused some anger and backlash from the numismatic community because promoters and big dealers can find ways to get the coins (such as paying people to order coins for them to get around one coin per household limits) and shutting out regular collectors from a chance to get one from the US Mint directly at the US Mint price.

In recent years, the US Mint has experimented more and more with making coins with special finishes and making them at different mint facilities (creating coins with different mint marks) than the mint facility where coins are usually made. This excites collectors because it makes the coins unique from just the standard bullion coins valued simply for the gold or silver content of the coins. 

Conclusion

If you are new to gold and silver and thinking about picking up some coins just to own some gold or silver, you probably won't have interest in all the special versions of the US Mint coins discussed above. The point here is that it is good to understand these coins exist and how the US Mint operates even if all you want are standard bullion versions of the coins. For one thing, you cannot buy those directly from the US Mint and will have to buy them from a dealer or someone who owns some and wants to sell them (like on Ebay). So you want to make sure you understand what you are buying and why what may seem like the same coins can have so many different price points. Hopefully, this article can help some with that understanding.

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Added news note 2-11-2021 - US Mint Sells Out 2021 Proof Silver Eagles in Minutes

This is the first of a three part series of articles on the basics of various forms of gold and silver investment. Understanding Mining Stocks and Understanding Gold and Silver ETF's are the other articles in the series.