Bullion - Gold &
Silver
Precious metals
in bulk form are known as bullion,
and are traded on commodity
markets. Bullion metals may be cast into ingots,
or minted into coins.
The defining attribute of bullion is that it is valued by its
mass and purity rather than by a face
value as money.
Many nations
mint bullion
coins, of which the most famous is probably the gold South
African Krugerrand.
Although nominally issued as legal
tender, these coins' face value as currency
is far below that of their value as bullion. For instance, the United
States mints a gold
bullion coin (the Gold
Eagle) at a face value of $50 containing 1 troy
ounce (31.1035 g) of gold — as of January 2006, this coin
is worth about $550 as bullion. Bullion coins' minting by
national governments gives them some numismatic
value in addition to their bullion value, as well as certifying
their purity. The level of purity varies from country to
country, with some bullion coins of as pure as 99.99% available,
such as the Canadian
Gold Maple Leaf. Note that a 100% pure bullion is not
possible, as absolute purity in extracted and refined metals can
only be asymptotically
approached.
One of the
largest bullion coins in the world is a 10,000 Australian
dollar coin minted in Australia
which consists of a full kilogram of 99.9% pure gold; however China
has produced coins in very limited quantities (less than 20
pieces minted) that exceed 260 troy ounces (8 kg) of gold.
Gold
as an investment and silver
as an investment are often seen as a hedge against both inflation
and economic downturn. Silver
bullion coins have become popular with coin collectors due
to their relative affordability, and unlike most gold and
platinum issues which are valued based upon the markets, silver
issues are more often valued as collectables, far higher than
their actual bullion
value. For more information on Gold & Silver bullion
visit Gold.org
and the Silver
Institute. |
