What is Bullion?

Bullion has long been revered as a tangible asset for both collectors and investors. Whether you're fascinated by its historical significance or seeking a stable investment option, understanding the intricacies of bullion is paramount. 

While the typical types of investments found in most investment portfolios are stocks, bonds or mutual funds, most gold bullion investors are drawn to gold bullion because of its scaling affordability, portability, and ease of storage. For individuals looking for simple ways to invest in gold, buying gold bullion can be a good option. Let's explore what bullion is and the factors to consider when collecting and investing in bullion.

What is Bullion?

Bullion refers to precious metals, typically gold, silver, platinum, or palladium, that are refined and shaped into standardized coins, bars, or ingots. It derives its value primarily from the metal content rather than its aesthetic or numismatic qualities, but many collectors enjoy the aesthetic and artistic qualities of beautifully minted coins and rounds. Bullion is highly valued for its purity, liquidity, and ability to preserve wealth during times of economic uncertainty.

Types of Bullion:

Bullion Coins: Bullion coins are minted by government or private mints and may possess a legal tender value, however, the intrinsic value of the metal they are minted from usually far exceeds their face value. Bullion coins are typically available in different sizes, such as 1/10th, 1/4th, 1/2, and 1 ounce. They often feature intricate designs and carry historical or cultural significance, adding to their appeal for collectors, but otherwise carry no collectible value beyond the precious metals it contains.

Bullion Rounds: Rounds are minted by private mints and have no monetary face value and are not intended to circulate as currency. Their value is based solely off its precious metal content. This usually means that it is more affordable to buy rounds than coins.

Bullion Bars: These rectangular bars are produced by refineries and mints and come in various weights, typically ranging from 1 gram to 1 kilogram (or more) ingots. With fewer costs for production and lower premiums per ounce, bullion bars can offer a cost-effective way to accumulate a larger amount of precious metal. They are often preferred by investors seeking to preserve wealth and diversify their portfolios.

Numismatic Bullion: Numismatic bullion combines elements of bullion and numismatics (the study or collection of coins, paper currency, and medals). This type of bullion may have limited mintage, special finishes, or unique artistic designs or shapes like stars, bullets, or caricatures that appeal to collectors. Numismatic bullion not only carries the value of the precious metal content, but also the potential numismatic premiums, making it attractive to collectors and investors seeking potential appreciation.

Gold Bullion Coins

Because gold bullion is sold by many sovereign nations and sought by investors and collectors the world over, purchasing gold can be a good investment. With proof gold coins, the coin is specially manufactured to have visual appeal. These proof coins may be created with special dies, polished dies, or a special strike. However, proof gold coins often carry a high premium because of their controlled mintage, artistic value, and planned scarcity.

Proof Gold Coins: Proof coins are the finest quality of coin produced by the United States Mint. The term "proof" refers to the coin's finish. Proof blanks are specially treated, hand-polished, and cleaned to ensure high-quality strikes. The blanks are then fed into presses fitted with specially polished dies and struck at least twice.

Burn Gold Coins: In contrast, burn gold coins are those that have been specially processed to wear down as if they were used as currency. With the expectation of future wear, these types of coins are processed to allow for the coin's design to be clearly seen, adding to the visual appeal.

Factors to Consider before Collecting and Investing in Bullion:

Precious Metals Value: Precious metals are used for various industries, and they are acutely subject to supply and demand. However, the base value of precious metals is determined by their weight. They can come in bars, ingots, rounds and commemorative pieces. Choosing to invest in precious metals often provide an accessible entry point for new investors.

Purity: The purity of bullion is determined by its metal content. The most common purity levels are 99.9% (often referred to as "fine" or "investment-grade") and 99.99% (referred to as "four nines" or "ultra-fine"). Higher purity levels usually command a higher premium due to the increased refining costs and assurance of metal content.

Authenticity and Certification: It is essential to verify the authenticity of bullion to ensure you are purchasing genuine products. Bullion.com provides certificates of authenticity or assay certificates, verifying the weight, purity, and origin of the bullion. These certificates can add an additional layer of trust and facilitate future reselling.

Premiums and Pricing: Bullion prices are influenced by various factors, including market demand, production costs, and economic conditions. When purchasing bullion, investors should consider the premium over the spot price of the metal. Premiums are the additional costs associated with manufacturing, refining, and distribution. Lower premium bullion (like rounds or bars) typically offers a more cost-effective way to acquire the metal content. We at Bullion.com are able to offer low premiums on our collection by introducing a wholesale option to the market. By buying and selling precious metals in bulk, we can cut overhead and pass along the savings.

Market Liquidity: Liquidity refers to the ease with which bullion can be bought or sold in the market. Popular bullion products with high market liquidity can be readily traded and are more likely to attract competitive bids. Recognizable government-minted bullion coins, such as American Gold Eagles or Canadian Silver Maple Leafs, generally enjoy greater liquidity due to their widespread recognition.

Unlike most investments, bullion offers a hands-on and reliable means of preserving wealth and diversifying investment portfolios. Gold, silver, and Platinum all come in various forms of bullion, but it is important to research their spot prices and market value before deciding to invest.

Expand your collection today and shop our Best Sellers [link] and compare prices across the market.