What are Proof Coins?
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In the world of numismatics, a proof coin is a specially minted or struck coin which possesses extremely high details and an often highly aesthetic 'mirror' finish that can easily be differentiated (with some exceptions) from coins meant for general circulation. In a nutshell, a proof coin is actually nothing more than a specially minted coin which is originally minted to check for any damage or inconsistencies with the dies that strike the coins. While many proof coins are not strictly for circulation, some mints do in fact issue them in limited numbers for numismatists. Unlike standard issue coins, proof coins usually appear finer and more detailed, with their background usually made to a mirror polish and their devices (details on the coin) frosted and stuck with more visible detail. Some proof coins even differ from standard issue ones, with little oddities that are absent in standard issue coinage.  Proof coins are only valuable insofar as their rarity is concerned, although some proof coins are standard collectible issues and are not at all rare. An exception to this rule are proof bullion coins which are similar to official bullion coins in that they are issued with the same amount of gold, silver, or platinum purity as standard Brilliant Uncirculated (BU) bullion coins, but are struck with specially made dies that leave a more aesthetically pleasing result.
Normal proof coins are collected by numismatists (and a rare number of investors) for their aesthetic appeal as well as their value (if they're rare enough, that is!). However, because proof coins are now commonly issued along with standard ones (referred to as 'ordinaries'), many investors usually consider proof coins worthless, except of course if they have an interest in numismatics. Rare proof coins can appreciate overtime, given the right amount of demand and extreme rarity, although as long-term investments, they really don't amount to much. Most of the time, if one does intend to make something out of collecting proof coins, very little profit can be made as many coin dealers will just throw the proofs on a scale to weigh them, and pay the collector around 92% to 95% of its spot price if and only if they are made of silver, gold, or some other precious metal. Unfortunately, many proof coins are made of base metal that (if one is lucky) can be electroplated in a thin layer of precious metal, although most of the time, it is simply made of a shiny alloy. 
Proof bullion coins however will appreciate overtime, as they contain a significant amount of fine noble metals, if not made from pure gold, platinum or silver (at the highest grade) itself. Both Brilliant Uncirculated gold, silver and platinum coins and proof bullion coins make for excellent investments and for great displays to flaunt to friends and family, whether or not they are issued officially.  Some proof coins are issued as commemorative collectible coins, while some are issued as souvenirs and are not even considered legal tender.
Collecting proof coins has a grey area as some proofs are issued officially by a country's mint and can be worth a few dollars (to a few thousand dollars if they're bullion), while some are issued by independent mints for numismatic hobbyists. Collecting bullion proofs however can be profitable overtime regardless of the issue, since the price of gold, silver, and platinum precludes a coin's rarity with the latter only increasing the price upwards if they're ancient or extremely rare. Most of the time, unofficially issued bullion proofs are simply weighed, paid for, and melted while non-bullion proofs are simply sold off to auctions if they're scare or in high demand. It should be noted however, that since ordinaries are made for general circulation, a number of proof coins are only issued as bullion (usually officially, but with some exceptions) while others are issued only as non-bullion collectibles. 
What are Proof Coins? - References:
Content researched and created by Alexander Leonhart for coinandbullionpages.com © coinandbullionpages.com 2012
Note - this site provides general information about gold, silver, coins and bullion. None of the contents of this web site should be seen as financial or investment advice.