What is Gold Bullion? | Definition, Examples, and How to Invest in Gold
At a Glance:
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- Gold bullion refers to very pure gold coins or bars manufactured for investment purposes.
- Numismatic gold is different from gold bullion because numismatic gold coins are sold for their rarity.
- On this page, learn more about what gold bullion is and how to invest in it.
Defining Gold Bullion – What is Gold Bullion, Really?
Whether you’re a new investor or a seasoned gold stacker, you’re likely to hear the term gold bullion quite a lot. But what is gold bullion? Gold bullion refers to highly pure gold products produced for investors. Not all gold items are considered gold bullion. Gold jewelry and collectible gold coins, for example, are not considered bullion. Products sold for their rarity, age, or collectability are usually called numismatic gold items.
Is gold bullion the best way to invest in gold? What’s the difference between numismatic gold and gold bullion? Oftentimes, the precious metals industry is filled with technical terms that can be confusing for new investors. That’s where Hero Bullion comes in. Our goal is to arm you with the knowledge you need to make more informed investing decisions.
On this page, learn about the definition of gold bullion, different types of gold bullion, and how to begin investing in humanity’s most precious metal.
Gold Bullion Vs. Numismatic Gold
As we explained above, gold bullion is a term used to describe highly pure, investment-grade gold products. Gold coins and gold bars are the most common types of gold bullion and make up the largest percentage of annual investment gold sales. Not all gold coins and bars are considered gold bullion, though.
Numismatic gold is also a popular investment vehicle. What’s the difference between numismatic gold and gold bullion? Gold bullion coins and bars are valued almost exclusively based on their precious metal content. Numismatic gold items are valuable because of their rarity, condition, age, or collectability. Expect to pay a greater premium over spot price for old, collectible gold coins than you’d pay for a modern gold bullion coin.
Some gold bullion products may also have numismatic value. Limited mintage gold bullion coins, for example, can become more numismatically valuable over time. For the most part, gold bullion coins and bars are sold primarily based off their melt value.
What’s the Better Investment?
What’s the better way to invest in gold? There’s no easy answer to this question. The best way to invest in gold depends on your personal preferences, investment objectives, and budget. Both gold bullion and numismatic gold come with several advantages – and disadvantages.
The biggest upside to investing in numismatic gold is that these products tend to become more valuable over time. Since old, rare gold coins will never be minted again, these investments appreciate in value as the number of surviving coins decreases naturally over the course of several decades.
Numismatic gold coins and bars can also play an important role in portfolio diversification. If the value of gold decreases, the resale value of a gold bullion coin will decrease as well. Numismatic gold coins, on the other hand, will still gain value over time based on their rarity, condition, or age. Mixing numismatic gold with gold bullion can give your portfolio more opportunities to profit.
Gold bullion is usually cheaper to buy than numismatic gold, as far as premiums are concerned. You’ll pay a premium whenever you buy gold, regardless of which type of gold product you choose to purchase. Premiums for gold bullion coins like the American Gold Eagle tend to be lower than premiums for rare pre-1933 gold coins, for example.
Ultimately, it’s up to you to decide which type of gold is best for your portfolio. Most financial advisors recommend that investors diversify their gold portfolios using a variety of different product types, including both gold bullion and numismatic gold coins.
Let’s take a look at the pros and cons of buying gold bullion vs. numismatic gold.
| Numismatic Gold | Gold Bullion |
|---|---|
| Great for diversification | More recognizable |
| Harder to quickly liquidate | Easier to quickly sell |
| Numismatic value over melt value | Wider variety |
| Higher premiums over spot price | Lower premiums over spot price |
Types of Gold Bullion
What are the different types of gold bullion? Most gold bullion comes in the form of either gold bars or gold coins. Gold jewelry is usually not considered gold bullion, since jewelry is sold at a higher premium over spot price and is typically not as pure as many gold coins and bars.
Gold bars and coins are two of the most popular forms of gold bullion. Below, we’ll explore the differences between gold bars and gold coins.
Gold Bars
Gold bars are instantly recognizable and are typically the cheapest way to invest in gold. Because gold bars don’t usually feature the ornate, complicated designs you’ll find on gold coins, they’re often sold at lower premiums over spot price than most gold bullion coins. Some gold bars might have added numismatic value, especially if they’re from a limited mintage series or were minted very long ago. This is uncommon, though, and most gold bars are sold for a modest premium over spot price.
Modern gold bars also offer a great deal of variety. Several gold bars by mints like PAMP Suisse feature beautiful obverse designs, making them an excellent way to merge low premiums with gorgeous artwork in your precious metals portfolio.
Gold Coins
Gold coins are another popular form of gold bullion. Not all gold coins are considered gold bullion – old, collectible gold coins are usually categorized as numismatic gold. Modern gold coins, including the 2024 Canadian Gold Maple Leaf Coin, are minted primarily for investors using highly pure gold.
Are gold coins cheaper than gold bars? Compared to gold bars, gold bullion coins are usually sold at higher premiums. This makes sense, given that gold coins cost more to produce and often feature complex, intricate designs on the obverse and reverse.
Despite higher premiums, gold coins can be an excellent addition to any precious metals portfolio. Many gold coins increase in value over time, even when the spot price of gold decreases marginally. It’s also worth mentioning that gold coins are beautiful. It’s always great to save money when buying gold, but adding gorgeous, intricate gold coins can elevate your portfolio to the next level.
How to Invest in Gold Bullion Coins and Bars
Ready to start investing in gold bullion? Especially for new investors, the process of buying a gold coin for the first time can be both daunting and rewarding. We’re here to help. Buying gold can be as easy as 1, 2, 3:
- Choose your favorite products.
- Find the best gold dealers.
- Store and protect your gold portfolio.
Let’s take a closer look at some tips and best practices for investing in gold bullion coins and bars.
1. Choose Your Favorite Products
The first step in buying gold bullion is to choose the category of product you’d like to buy. Most gold bullion products are either gold coins or gold bars. Both types of gold have advantages and disadvantages, so the best kind of gold to buy is a matter of personal preference.
Once you’ve decided which type of gold bullion you want to buy, look for a gold dealer with a wide selection, fair prices, and an excellent reputation for selling your favorite type of gold.
2. Find the Best Gold Dealers
Finding the right gold dealer can be tricky, particularly if this is your first time investing. There are hundreds of gold dealers online, and picking the most reputable gold dealer requires quite a bit of research. Luckily, online resources like Shopper Approved can help you quickly vet and compare gold bullion dealers to find the best gold bullion deals, read customer reviews, and choose the best dealer possible for the next step of your investing journey.
When you shop around for a new gold dealer, be sure to consider three main factors:
- Reputation. How many verified reviews does your dealer have? What do customers have to say about this company’s quality of service? Be sure to read customer testimonials to get a better idea of your gold dealer’s reputation among veteran gold investors.
- Selection. If you’re shopping for a specific gold bullion product, you’ll want to work with a dealer who offers a wide selection of different bullion coins and bars. Always take some time to browse a gold dealer’s website to see how many different products they keep in-stock.
- Value. When budgeting for a new gold bullion coin or bar, you’ll want to determine the total cost of your investment. Gold coins and bars always sell for more than their melt value, but premium costs vary from dealer to dealer. Shipping costs can quickly add up, so you should also look for dealers who offer free shipping on qualifying orders.
Who’s the best gold dealer? The internet is filled with excellent gold bullion dealers, and picking the best one is always a question of personal preference. With over 18,000 reviews from verified customers, Hero Bullion has established itself as a premier gold and silver dealer. That said, we always recommend that readers do their own research before choosing a new gold dealer.
Remember: Always Compare Prices!
Comparing prices is one of the most important parts of investing in gold. The total cost of a gold bullion coin or bar includes a few factors, including:
- Melt value. Melt value refers to the value of the precious metals that make up a bullion coin or bar. Multiply the gold weight of a gold item in troy ounces by the current spot price of gold to determine its melt value.
- Premiums. Premiums are applied to every gold product but vary based on product type and dealer. Subtract the melt value of a gold coin or bar from its total price on a gold dealer’s website to determine the amount you’re paying in premiums.
- Additional fees. Several additional fees add to the total value of a gold product, including shipping costs and state sales taxes. Be sure to read up on the sales taxes in your state to figure out how much you’ll be charged for a gold bullion coin or bar. Some gold dealers, including Hero Bullion, offer free shipping for orders over $149.
Comparing prices can save you hundreds – or thousands – of dollars as you build your investment portfolio using gold bullion coins and bars.
3. Store and Protect Your Gold Portfolio
After you’ve chosen the right products and picked a reputable gold dealer, it’s time to secure your investment. Properly storing your gold coins and bars is a cost you should consider before investing. For expensive gold items like gold coins or bars, spending money on a secure safe can save you thousands of dollars.
The last thing any new gold stacker wants is to lose their portfolio to theft or disaster!
Final Thoughts: What is Gold Bullion, and Should You Invest?
What does gold bullion mean? Gold bullion is a term used to describe gold products minted with a high purity for investment purposes. Gold bullion is different from numismatic gold, since numismatic gold is valued for its rarity, condition, or age. Gold coins and gold bars are two of the most popular types of gold bullion, and they both come with advantages – as well as drawbacks.
Whether you do business with Hero Bullion or another gold dealer, always be sure to compare prices and read reviews to make sure you find the right gold seller for your needs.
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.