In previous Coin History articles, the focus has predominantly been on circulating coins of the past or today. For this article, I will focus on another modern coin, but on one of the bullion coins that is offered by the United States Mint: The American Buffalo.
The American Buffalo, also sometimes referred to as a Gold Buffalo, was the first pure, 24-karat gold coin ever produced by the Mint for offer to the public. It bares a legal tender face value of $50 and was first made available starting in 2006. But how this coin came to being might surprise some readers.
The birth of the buffalo gold coin starts in 2005 with the Presidential $1 Coin Act of 2005. That act, as the name suggests, authorized the United States Mint to produce the Presidential Dollar series of coins which began in 2007. Additionally, it had two other mandates on the Mint. First, it called for the redesigning of the Lincoln Cent in 2009 in honor of the 16th President of the United States’ 200th birthday. You can read about that one-off series in this Coin History article. Secondly, and lesser known, is that it authorized the mint to produce a one-ounce 24-karat gold bullion coin. That coin was to have a $50 face value and a mintage up to 300,000 coins per annum.
Interestingly, the United States was already producing a gold coin for collectors and investors, the American Gold Eagle. That coins had been in production since 2002 and remains so today. However the government was feeling the pressure to compete with foreign gold bullion coins. The American Gold Eagle has a gold content of 91.67%. For many investors, that wasn’t enough gold so they were turning to other coins, most commonly the Canadian Gold Maple Leaf which contained 99.99% pure gold. Simply put, the U.S. wanted a piece of the investor action which is why the desire to have a .9999 gold coin found its way into this piece of legislation.
The bill itself called for this new bullion coin to be referred to as the American Buffalo and specifically called out that the design should be based on a modified version of James Earle Fraser’s design of the Indian Head Nickel (commonly referred to as the Buffalo Nickel). Few Numismatist complained about this decision as the Indian Head Nickel’s design is considered by many to be one of the best in United States coinage history. The bill was presented to President George W. Bush on December 15, 2005 and signed into law on December 22, 2005.
The Obverse depicts a Native American similar in look to that of the Indian Head Nickel. Fraser maintained that he created the iconic portrait through the mixing of facial features of three American Indian tribe chiefs: Big Tree, Iron Tail, and Two Moons. Fraser indicated that all three of these chieftains had posed for him in the making of the Nickel.
The Reverse of the coin uses Fraser’s Nickel. Specifically, it uses the Type 1 design which was introduced on the Nickel in early 1913. From mid-1913 through to 1938, a Type 2 design was used on the Nickel which had a reduced mound on which the Buffalo stood.
The American Buffalo gold coin made its debut in 2006. The uncirculated version of the coin was made available to dealers on June 20, 2006 while the proof version was made available to the public directly from the United States Mint on July 22, 2006. The 2006 Proof had a strict strike mintage limit of 300,000 coins and a limit of 10 coins per household was put into place on the coin. The coin was priced at $800. The 2006 American Buffalo today in MS-70 sells on average for $1700.
Sales in 2006 and 2007 were strong, prompting the Mint in 2008 to introduction fractional buffalo gold coins. In the first two years of the coin’s minting, only a one-ounce coin had been produced. In 2008 however, a 1/10 ounce ($5 face value), 1/4 ounce ($10), and 1/2 ounce ($25) coin was introduced. This was similar to the program that had been running for the American Eagle gold coin, with the expectation being that collectors and investors who could not necessarily afford the one-ounce coin would be able to afford the fractional coins. The Mint went on to produce a 8-8-08 Double Prosperity set that contained the 1/2 ounce American Buffalo and a 1/2 ounce American Eagle. The Mint’s theory on fractional sales proved to be true. All of the coins sold exceptionally well but there was an underlying problem that at least potentially inflated sales figures. That issue was the subprime mortgage crisis.
Starting in 2007, the crisis saw foreclosures and defaults on mortgages skyrocket as home values plummeted. This, in turn, drove the United States economy into recession. Investors, seeking security from the crisis and recession, began buying gold and a lot of it. Demand was so high on the Mint that on September 26, 2008, it was announced that sales of the American Buffalo coins would be halted as it could not keep up with demand. When production resumed, only the one-ounce Buffalo was produced. Today, the Mint only produces the one-ounce coin, making 2008 fractional American Buffalo’s slightly more rare.
All of the coins, uncirculated or proof, are struck at the Mint’s West Point facility in New York but only the proof version of the coin bares the “W” mint mark for West Point. The mint mark is found behind the Indian’s neck on the Obverse.
Below you will find a table of the mintage figures for the American Buffalo one-ounce coin in uncirculated condition.
Like other bullion coins that are offered by the United States Mint, the price of the American Buffalo has continued to rise as the price of gold has escalated over the past 14 years. Today, the 2020-W proof sells for $2415. That assumes the price of gold being at least $1700 per ounce. The price can go up or down weekly depending on the spot price of gold. If you are considering purchasing an American Buffalo for your collection or for investment, it will pay to watch gold prices to try to buy when prices per ounce are lower. In 2020, the price of gold has stayed almost unchanged due to the ongoing COVID-19 pandemic which, like the subprime mortgage crisis, is driving investors to buy more gold for protection. That, in turn, keeps prices stable and high.
To get more information on the American Buffalo gold coin program, check out the United States Mint website.