What Exactly is Bullion?
New to the World of Investing in Precious Metals and Asking “What is Bullion?”
If you’re new to the world of investing in precious metals you likely have a host of questions as it concerns the many fascinating opportunities before you. What precious metals are prime for the best investment? Which collectible metals should I consider? What exactly is bullion?
Fortunately, there are many investment experts both locally and online who can help you navigate this shiny new world of precious metals. As well, the experts at Hero Bullion are happy to answer your many questions about which metals are primed for positioning in your portfolio or which collectible coin, round, bar and more would best suit your needs. As for defining what is bullion? Well, let’s go ahead and check that box for you now.
Should You Invest in Bullion or Numismatic Coins? Silver or Gold?
Bullion is defined as a precious metal that is pure (99.9%) or nearly pure (99.5%). Bullion can take the shape of either coins or bars and can be composed of a precious metal like gold, silver, platinum and palladium with gold and silver prevailing. Because it is more refined, bullion investors generally yield a better return on the actual investment. However, the obvious issue here is that it can also be more costly to purchase.
Collectible coins are a slightly different type of investment. There are a number of factors that come into play as a value is applied to a collectible coin such as survival or circulation rate, mintage and grade or condition. And this is where an investor realizes the difference between price and value. Both bullion and collectibles have a spot price but, unlike bullion, collectible coins can achieve a value beyond the spot.
Gold, of course, is considered the frontrunner as it comes to investing in bullion and for good reason. It easily stands the test of time as it comes to providing consistent returns on one’s investment. Silver boasts the highest conductivity of all metals and is growing in popularity for its use in the booming solar energy sector. Platinum and palladium are also key ingredients as it comes to manufacturing the catalytic converter. To be sure, these precious metals will always be in demand and that demand will only increase in the years and decades to come.
What Kind of Bullion Should I Invest In?
Now that you know what exactly is bullion and that you want to invest in physical bullion, your next question will likely be “what kind of bullion should I invest in?”
A popular choice as it comes to investing in bullion is the American Gold Eagle coin. This sovereign coin is very recognizable among investors. Therefore, it’s more liquid and typically sells at a higher per ounce premium than gold bars.
Generally speaking, the American Gold Eagle is still considered bullion as it doesn’t have the qualities collectors may be looking for in an investment that would have it trade well beyond the spot price of gold. Condition, year and other variables such as being a proof or first-strike coin can add value to the American Gold Eagle coin for collectors, but these coins should be avoided by bullion investors simply wanting the most gold for their money while enjoying the aforementioned benefits of a standard American Gold Eagle coin.
If you have a preference for silver bullion, then you might have a look at the Canadian Silver Maple Leaf coin. As an interesting reference point, the Royal Canadian Mint was among the first mints in the world to increase the purity of its silver coins to what is called the ‘four nines’ standard, being 99.99% pure. So, yes, the Canadians have a reputable history as it comes to minting bullion and their silver coins make for a solid investment. The Canadian Silver Maple Leaf coin also has enhanced security features not found in coins such as the American Silver Eagle, which has historically been a more popular buy for residents of the United States.
Lower-premium, generic, bullion is a great alternative to sovereign coins for investors simply looking to get the most metal for their money. This often offers the most reliable return if you’re not going to get into the nuance of which coins or bars you could most reliably retrieve the premium from.
And, as mentioned, bullion can also be made of palladium and platinum coins or bars. Either of these precious metals in bullion form would also make for a worthy addition to your investment portfolio. Now that you know what exactly bullion is, it’s simply a matter of researching the matter and conferring with an expert who can better help you make the choice that’s right for you.
About The Author
Jake HaugenFollow @herobullion
Hero Bullion provides an environment that is informative and safe for those looking to own physical gold and silver bullion as an investment. We love helping folks at all stages throughout their bullion journey making progress towards acheiving their financial goals. Whether you are a seasoned bullion investor or brand new to the game of gold and silver bullion ownership, we're here to help and serve you in any way we can.