What is Gold Bullion?

June 13, 2018

What is Gold Bullion?

Exactly what is gold bullion?

We've all heard the term before, but what exactly is "gold bullion" and how is it different from other gold products? Don't fear, GBS is here to break it all down. First, simply put "bullion" refers to precious metals in bulk form, valued by weight. You often perceive gold bullion as bars or ingots and that is one form, albeit the most popular. Bullion can also be gold shaped like coins. Large gold bars can be an efficient way to buy physical gold, especially if you are going to store your larger gold bullion holding in a recognized insured storage facility. Also, if you apply your gold for working applications, such as in electronics, manufacturing, or the arts, gold bullion bars are the most cost-efficient way to buy it. It's key to note that while bullion bars come in a range of sizes, they tend to be quite large and can be more unwieldy than coins, making them less versatile. Essentially, they’re more appropriate for serious gold investors.

What is gold bullion terminology?

We always think it's crucial to learn the various terminology associated with gold bullion. For gold, it's recognized that the trading unit is one fine troy ounce and for silver, platinum and palladium one troy ounce. The importance of this differentiation is that in the case of gold, the unit represents pure gold irrespective of the purity of a certain bar, whereas for silver, platinum and palladium it represents one ounce of material. So of that, a minimum of 999 parts in every 1,000 will be silver and 999.5 parts in every 1,000 will be platinum or palladium. Fineness is a measure of the proportion of gold or silver in a bullion bar or platinum or palladium in a plate or ingot and is expressed in terms of the fine metal content in parts per 1,000. It thus defines the purity of a gold or silver bar or platinum or palladium plate or ingot. Assaying is the process by which fineness is determined. Purity is often quoted in the form of fineness – for instance, sterling silver is 925 fine. On the other hand, the fineness of gold jewellery is usually illustrated in carats (parts of fine gold per 24). Eighteen-carat jewellery is therefore 750 fine in bullion market terms.

What are gold bullion bars vs coins?

You might think bullion only refers to bars but they can also refer to coins. The only real difference is the shape of the gold you buy. Coins are also produced by different entities, such as the United States and Canadian governments. United States American Eagle Gold Bullion Coins contain their stated weight in gold, including some alloy to help them hold their shape and ward off damage, making them just under 92 percent gold, generally. And since coin are smaller and already in usable form, coins can be easier to liquidate and use than bars. We hope we cleared things up for you on what bullion is, how it can refer to not just bars but also coins, and the various options available to you as a gold investor. And if you are interested to learn more about gold, from its history to how it's made, be sure to check out more blog posts we regularly publish.


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