Posted on June 08, 2022
Anyone familiar with coins knows not all coins are created equal. For example, a standard bullion coin is generally far more valuable than any ordinary coinage in circulation. When it comes to valuable coinage, BU coins are rivaled only by proof coins.
BU is an acronym for Brilliant Uncirculated. BU coins are a step up from bullion coins, offering more detail. What’s considered Brilliant, Uncirculated, and what’s considered bullion-grade varies from mint to mint. For example, here’s what U.S. Mint has to say about the difference:
The term uncirculated refers to the special coining process used to make the coin, which gives it a brilliant finish. Uncirculated coins are manufactured using the same process as circulating coins, but with quality enhancements such as slightly higher coining force, early strikes from dies, special cleaning after stamping, and special packaging. Uncirculated coins may vary to some degree because of blemishes, toning, or slight imperfections.
On the grading scale, BU coins fall in the middle, a notch above bullion coins and a notch below proof coins.
Coins are assigned grades by third-party grading services from companies like The Numismatic Guaranty Company (NGC) and Professional Coin Grading Service (PCGS). To assess a coin’s quality, these companies will use the Sheldon Coin Grading Scale, which evaluates a coin based on a 70-point scale.
Originally, a 70, the highest possible score on the Sheldon Scale, was supposed to indicate a coin worth 70 times that of a coin receiving a 1, the lowest score on the scale. However, since the 1970s, the adapted Sheldon Scale has been the authority in the numismatics industry. Circulated grades for coins are under 60, with 1 (poor) being the lowest grade. Scores in the 50-59 range are About Uncirculated or Almost Uncirculated (AU), meaning they have some traces of wear but have maintained at least half or more of their original luster.
Mint state (MS) coins, which usually include Brilliant Uncirculated coins, receive grades of 60-70, with 60 representing a coin that lacks luster, and 70 indicating a flawless coin, even at 5x magnification. Standard BU coins might be given a grade between 60 and 65 on the Sheldon Scale, while a Gem Brilliant Uncirculated coin demonstrates an exceptional specimen, earning it a score between 65 and 70.
One of the key similarities between BU and proof coins is that they are both struck multiple times by hand-finished, hand-polished dies. Usually, only proof coins come with certificates of authenticity.
Though they do share some similarities, a couple of distinguishing traits separate BU coins and proof coins. For example, proof coins are struck up to six times, versus just two for BU coins. In addition, the dies used to strike proof coins are newer, cleaned between each use, and limited to fewer strikes before being retired. This is an important factor because dies slowly degrade with use, and fine details become increasingly lost over the course of a die’s production run.
A proof coin is also polished and cleaned by hand, after which it is rigorously inspected and carefully packaged.
Overall, proof coins have more detail and, in many cases, a frosted or high-relief finish. Proof coin grades sometimes include a cameo effect, where the raised image (the relief) appears frosted and the background (the field) behind it shines reflectively. Cameo grade coins have a strong contrast between the relief and the field, while ultra cameo or deep cameo coins have the most pronounced contrast of any coins.
Proof coins are cherished as collectibles and typically have a higher value than BU coins, which are more popular for investing.
Circulation coins are minted for everyday transactions, though it doesn’t always make sense to treat them like ordinary currency. In fact, some circulating coins produced by the U.S. Mint are sold by the mint directly, rather than being released to the Federal Reserve Bank.
Though the production process for BU and bullion coins can vary by mint, it takes more time and attention to make BU coins. At the Royal Mint, for example, BU coins are machine-fed and twice-struck at the rate of roughly 100 coins per hour. Bullion coins, on the other hand, are only struck a single time, so production can be as high as 250 per hour for gold coins and 3,000 per hour for silver coins. Ordinary circulated coins today are minted at far greater speeds, with a circulating press striking up to 45,000 coins per hour.
When dealing with the top government mints – such as the U.S. Mint, Royal Mint, Royal Canadian Mint, or Perth Mint – all bullion coins are expected to be in BU condition. These mints go to extreme lengths to control quality and ensure the owner of these coins has the highest-quality product. However, if the coin is roughly handled or not properly cared for by its owners, it can quickly lose its BU grade.
When BU or bullion coins are minted, they are packaged in protective tubes before being carefully packed into a monster box for shipment to authorized bullion dealers. By comparison, circulated coins are often dumped into a bag and are often scuffed or scratched up before even leaving the mint. Some examples of circulated coins include the Canadian silver dollar coin and the 20 Franc gold rooster.
Coin prices are determined by supply and demand, grade/condition, and market pricing of the precious metals they’re made of. If a coin was minted in limited quantities and there are very few available, the price will increase. When the price of gold increases, the prices of gold coins will rise alongside it. Naturally, a mint coin will be more valuable than its damaged or worn counterpart.
Despite Dr. Sheldon’s original coin grading scale losing its relevance in the 1950s, one thing that hasn’t changed is the vast discrepancy in pricing between circulated coins, BU coins, and proof coins. For the most part, circulated coins are worth no more than their face value (collectibles and coins containing precious metals are the exceptions). Circulated coins with precious metals will usually be sold for the melt value of their precious metals.
The price of BU coins depends on the metal used and the weight since gold and platinum are much more valuable than silver. BU coins in general, carry a premium of 5-20% over the spot price, usually higher for fractional weights.
Proof coin pricing is another 10-20% higher than BU pricing at least. Flawless-grade ultra-cameo proof coins may sell for 2-3x their melt value simply based on rarity, collectability, and demand.
Generally, the closer a BU coin ranks on the Sheldon Scale to 70, the closer it will be in price to a proof coin. This rule of thumb applies to individually-priced coins. When you purchase a BU coin from a large dealer like BullionMax, you’ll receive a coin that was issued as brilliant, uncirculated condition by the mint that produced it. Among those will be some truly lovely specimens approaching proof quality, and others that aren’t as crisp. They’ll all be BU coins, but some will inherently be nicer than others.
One of the most common misconceptions with the acronym BU is that the letter B stands for the word beautiful. Though BU coins are indeed beautiful, there are no coins graded “beautiful uncirculated” – only Brilliant Uncirculated.
In some cases, the BU identifier can be used to deceive collectors, since it ranges from 60-70 on the Sheldon Scale. Sometimes, when it’s not worthwhile to pay for an official grading on a coin, unscrupulous sellers may wrongfully use BU as a general grade for coins, or as a substitute for Mint State. Instead of offering the complete details of the coin, BU may act as a stand-in for Mint State to denote that the coin represents its same condition from the time of its minting.
Remember, BU is a grade assigned by the mint itself. As we said before, some specimens are nicer than others – but they’re all brilliant and uncirculated, fresh-from-the-mint, brand new.
You can buy brilliant uncirculated coins in coin shops or from coin auctions or shows. Still, the best place to buy BU coins is from trusted bullion dealers like BullionMax, where you can find below reasonable pricing and free shipping on orders over $199.