Many people think that all coins are made the same way, just with different designs and out of different precious metals. This couldn’t be further from the truth. Coins are minted in various ways and for different purposes to produce different finishes. Proof coins and brilliant uncirculated coins, for instance, are both wonderfully designed and carefully minted, but take a closer look. These two types of coins are more different than you think.
The term “brilliant uncirculated” can refer to three things, the last of which we will focus on here since it’s the U.S. Mint’s preferred usage. Just keep in mind that if you hear or read about a brilliant uncirculated coin elsewhere, the user may be referring to any one of these three things: a coin that’s released to the public but not intended for general circulation, a coin that has been given an official grade of “Mint State 60+,” the process by which a coin is made (this is how the U.S. Mint refers to the brilliant uncirculated coins it sells and the definition we’ll rely on.)
Knowing the difference between proof and brilliant uncirculated coins, as well as how to relate to circulating and bullion coins, can help you make the best, most informed decision for your precious metals portfolio.
The U.S. Mint groups their coins into four different families: bullion, proof, uncirculated, and circulating.
What Are Bullion Coins?
Bullion is simply defined as, “Precious metals in bulk form.” Bullion coins are, “Valued by the weight of the precious metal, which fluctuates based on its daily price,” notes the U.S. Mint. This family of coins is great for novice buyers, as bullion coins are easy to understand and easy to buy.
What Do Bullion Coins Look Like?
Bullion coins are struck only once, meaning that the coin’s design is pressed into the front and back of the coin once, as opposed to multiple times (like proof coins). Bullion coins have a basic finish that is neither incredibly matte nor incredibly shiny. You could say the finish is satin or just slightly frosted. Bullion coins are generally not sealed in plastic slab cases.
Why Buy Bullion Coins?
There are numerous reasons to buy gold bullion coins. Bullion coins can be optimal for a short-term holding strategy, as they tend to behave more like commodities. A few of the most popular gold bullion coins include Gold American Eagles, Gold American Buffalos, and Canadian Gold Maple Leaf Coins.
What Are Proof Coins?
What’s a proof coin? “Proof” indicates a coin’s finish and method of manufacture, not a coin’s condition or grade. The Guide Book Of United States Coins defines the term as: “Proof, a specially made coin distinguished by sharpness of detail and usually with brilliant, mirror-like surfaces.”
To understand how proof coins came to be, it helps to understand how most coins are made.
Once a coin’s design is approved, a pair of master dies are made and the coin’s manufacturing process begins. A die is a metallic piece, usually a steel rod, that contains an inverse version of the design that is to be pressed into a coin. Dies are kind of like rubber stamps, as the design on a stamp is used to create multiple copies of the same image.
The first proof coin was made as a die test, not necessarily for public distribution. Only a few copies were made since that’s all that was needed. Each proof coin was struck multiple times to bring out every detail in the design. The proofs were then examined to ensure every part of the design was rendered perfectly. It all looked right, the proof was approved and the die then started making circulating coins - but only striking them once.
The Smithsonian collection now guards the first “unquestionably” proof gold coins, an 1821 Quarter Eagle and Half Eagle. Without these proof coins to reference scholars would have a much more difficult time deciding whether or not a coin should be designated as proof.
Some proof coins were kept as records, writes the U.S. Mint, and others were given as gifts to leaders of other nations. Historical records indicate that sets of proof coins were put together in 1834 as gifts for the King of Siam and the Sultan of Muscatine.
What Do Proof Coins Look Like?
Silver and gold proof coins are the finest quality of coins produced by the U.S. Mint, and they’re no longer produced for die tests. They’re hand-polished and cleaned to ensure high-quality strikes. The dies are also specially polished. Each blank is struck at least twice (remember, bullion coins are struck only one) and then carefully packaged to preserve the coin’s exceptional finish.
The resulting coin has a frosted, sculpted foreground, glamorous shine, highly-detailed design, and mirror-like background. This is a hallmark quality of a proof coin.
Why Buy Proof Coins?
Proof coins are the finest quality of coin produced by the U.S. Mint. They can help precious metals owners minimize the risk and maximize reward over a long period.
Why? While the price of bullion coins is primarily determined by the spot price of precious metals and the coin’s weight in gold and silver, the price of a proof coin is also tied to its availability and condition. Accordingly, proof coins, especially those that are graded and certified, have shown to not be subject to the same level of spot price volatility as bullion coins. When economic conditions start seesawing, you could see the price of a proof coin fluctuate less than that of a bullion coin.
Due to their rarity, grading, and insulation from spot market volatility, proof gold and silver coins can achieve greater potential when held for longer periods. By nature, their scarcity allows for increased potential. Proof coins also make exceptional and memorable coin gifts for holidays, birthdays, and anniversaries.
What Are Brilliant Uncirculated Coins?
A BU coin is a coin that has never been circulated and retains all of its original mint lusters. BU stands for “Brilliant Uncirculated,” but this term is used less frequently now the Sheldon scale of numerical grading is more widely used. “Brilliant Uncirculated” is sometimes used interchangeably with Mint State or Uncirculated.
“Brilliant Uncirculated” can indicate that a coin is in mint condition and does not have the usual wear and tear of circulated coins. While proof coins aren’t circulated in an everyday currency like a penny, nickels, and dimes, they aren’t technically classified as “uncirculated coins.”
Per the U.S. Mint, “the term ‘uncirculated’ refers to a specialized minting process...uncirculated quality coins are distinguished by the presence of a mint mark, indicating their production facility, and by the use of burnished blanks, which are hand-fed into specially-adapted coining presses one at a time.”
Uncirculated coins can have the same designs as circulating coins but they’re not meant for daily use.
Instead, “they are for collectors, and are kept in far better condition than coins that have been handled every day,” explains the U.S. Mint.
Sounds simple enough right? Do a little online research and you’ll see that everyone seems to have a different definition of the word.
Much of the confusion lies with changes in 2006 to the U.S. Mint’s terminology and with the hobby’s use of an alternative term. From 1986 to 2005, the Mint referred to the American Eagle gold and silver bullion coins as having an ‘Uncirculated’ finish at a higher grade.
Then in 2006, the Mint introduced a collector Uncirculated [American Eagle] coin while at the same time dropping the same term from all marketing materials for the bullion coin versions, even though those pieces still had an Uncirculated finish. Meanwhile, the hobby side of things seized upon the term burnished and eventually began referring to the collector coins as ‘Burnished Uncirculated.’
The numismatic community continues to use the term “burnished” about coins produced with burnished blanks during the minting process, while the U.S. Mint does not use the term “burnished.” The U.S. Mint refers to these coins as uncirculated.
Bottom line? Get clarification on the terms “uncirculated” and “burnishes” whenever and wherever used, especially if you’re looking at buying a half dollar coin with these labels. The seller may not use the term in the same way that the U.S. Mint does.
A BU coin is usually described as MS (Mint State) today and generally falls into the lowest MS grades (grades between MS-60 and MS-63) on the Sheldon scale. Since there is no definitive mapping between what a “Brilliant Uncirculated” coin is on the Sheldon seventy point coin grading scale, very few dealers and collectors use the term to value their coins apart from the NGC and the PCGS. You should be cautious when buying coins if a coin dealer is using this relatively undefined coin grade to assign a value to his coins.
Common adjective grading usually maps to the following Mint State grades:
- Uncirculated (MS-60, MS-61, MS-62): A technically uncirculated coin with abundant and noticeable defects such as bag marks and scrapes. It is usually accompanied by a poor strike and dull mint luster.
- Select Uncirculated (MS-63): An uncirculated coin with few deficiencies and a better eye appeal in lower Mint State grades.
- Choice Uncirculated (MS-64): These coins have moderate distracting bag marks and/or very few, but noticeable light scratches due to handling. Eye appeal will be good but not outstanding.
- Gem Uncirculated (MS-65, MS-66): Any uncirculated coin with only minor and light distracting marks or imperfections. Strike and eye appeal will be above average for the coin type.
- Superb Gem Uncirculated (MS-67, MS-68, MS-69): An uncirculated coin or a Gem-bu with only the slightest of imperfections due to handling and transportation. Many of these imperfections will only be visible under magnification. Strike and eye appeal must be outstanding compared to other coins of the same type.
- Perfect Uncirculated (MS-70): An utterly flawless coin with no imperfections or marks visible even under magnification. The strike must be exceptional and eye appeal must be dazzling.
The History Of Adjectival Grading
Although Dr. William Sheldon developed his seventy-point grading scale in 1949, it wasn’t widely accepted in the numismatic community until the mid-1980s. Before that time coin dealers and coin collectors used a variety of adjectives to describe the condition of their coins. Terms such as “Nice”, “Very Good”, “Hardly Worn”, or “Pretty Good Shape” were used to describe the condition of coins.
Unfortunately, the meaning of these terms as it relates to the coin being described was subjective and inconsistent. What one dealer might consider “Nice”, a coin collector might consider as “Very Fine”. Is nice better than very fine? It all depends on who you are asking. With this lack of standardization, it was a free-for-all in the coin market.
In 1934 Wayte Raymond, a New York City coin dealer and researcher published the first edition of the “Standard Catalog of United States Coins”. In his work, he defined such terms as Proof, Uncirculated, Extremely Fine, Very Fine, etc. He also rank-ordered these in his catalog from the very finest condition to the very lowest condition.
Although this was an improvement because the terms were now rank-ordered from best to the least, what these terms exactly meant was still a matter of debate. In 1946 the Whitman Publishing Company issued its first annual edition of “A Guide Book of United States Coins”. Later editions of the book gave more detailed descriptions of what each adjective meant regarding the coin’s grade as collectibles.
In 1970, James F. Ruddy published the first edition of “Photograde”. Ruddy adopted Dr. Sheldon’s seventy point scale and gave detailed descriptions for each grade within every series of United States coins. Additionally, he provided photographs of what a coin should look like and that particular grade.
Dr. Sheldon’s original scientific approach to grading was based on research over many years of coin values. The basic premise was that a coin in Mint State 70 (MS-70) would be worth seventy times more than a coin graded Basal State-1 (currently known as Poor-1). Regrettably, his scientific theory did not hold for all coins, across all dates and mintmarks. However, this provided the basis for our current standard grading system.
What Do Brilliant Uncirculated Coins Look Like?
In 2005, the U.S Mint began making brilliant circulated coins with specially prepared dies so that the coins would have a smooth, beautiful finish that was attractive and more detailed than a bullion coin, but not as shiny as a proof coin.
Brilliant uncirculated coins are hand-loaded into the coining press and struck on specially burnished blanks. The result is a soft, matte-like finish. While brilliant uncirculated (read: burnished) coins often share the same design as your pocket change, they also can be minted with commemorative designs or the same designs as your favorite silver or gold proof coin.
The term “uncirculated coin” refers to the condition of a coin that indicates that it has never circulated in the regular money supply in the economy. In other words, the coin shows no signs of wear on any of its surfaces. Since most modern coins are mass-produced in large quantities, it is common that the coin may have small nicks and scrapes on its surface from the production process and being transported in bags and bins. These minor imperfections are not from the coin circulating in commerce, and hence the coin is still uncirculated.
Numismatists grade uncirculated coins by taking into account the concentration and quantity of these minor imperfections. Coin collecting grades uncirculated coins using a scale that ranges from MS-60 (a lot of marks and imperfections) to MS-70 (a perfect coin with no marks). Numismatists grade world coins and silver dollars using adjectives to describe the grade, such as Uncirculated ( a considerable amount of marks on the coin’s surface), Brilliant Uncirculated (just a few minor marks), and Gem Brilliant Uncirculated (no marks are visible to the naked eye).
When a coin first comes off the coining press, it exhibits a luster that can only be produced by the minting process. If you held a coin under a single light source and tilted from side to side and top to bottom, you will notice that the light will dance around the surface of the coin. This movement of light on the surface of the coin is known as the cartwheel effect.
If the coin does not exhibit the “cartwheel effect,” it has been circulated and cannot be classified as uncirculated. Next, look at the highest points of the design. If the cartwheel effect is evident in the fields of the coin but not on the highest points of the design, numismatists would consider it uncirculated. The only way for a coin to be classified as uncirculated is if there is no evidence of wear anywhere on the coin. In other words, the luster is bright and complete across the entire surface of the coin.
Why Buy Brilliant Uncirculated Coins?
Like proof coins, brilliant uncirculated coins are made for saving, not spending. Because they’re minted in much the same way as circulating coinage, though, brilliant uncirculated coins tend to be more affordable than proof coins. They can also be produced in higher numbers than proof coins, but not always. For example, the Burnished Gold American Eagles with the “W” Mint Mark offers the absolute lowest mintages of any coin in the entire history of the Gold American Eagle program.
Some precious metals holders may look to buy brilliant uncirculated coins to keep with a certain theme in their portfolio, or for sentimental reasons.