The term Bullion stands for silver and gold bars as well as other precious metals bars or ingots. The word bullion originates from the old French word bouillon (which meant boiling) and was a term used for a mint or melting house. Bullion refers to precious metals in bulk form which are these days usually traded in the commodity markets.
The value of bullion is typically determined by the value of the metals content, which is defined by its purity and its mass. Bullion coins or bars will increase in value if the world silver market moves higher and will decrease in value if that same market moves lower.
Numismatic vs Bullion Coins
If you are considering Investing in Gold Coins, Are Numismatic Coins Better Than Bullion Coins?
Wise investors have made this decision long ago and benefited from outstanding returns over the past decades. Investment advisors suggest that 10% of our portfolios should be in precious metals, but how to invest is the question.
There are three main options when buying gold coins: buy collector coins, numismatic coins, or bullion coins. They offer an easy way to store them in a safe place and sell a few at a time when need be. The actual content of gold in the coin is the paramount driver of value at the time the coin was minted.
Examples are U.S. Gold Eagles, Canadian Gold Maples, and South African Krugerrands. When you buy these coins, you are truly paying for the gold content, and you may pay a small premium to offset the costs of the minting process.
For numismatic coins, you become not only an investor, but also a collector! If you are interested in gold purely as an investment, then bullion is the right answer as pricing is simpler to understand and less variables need to be considered.
Investing in collectibles, on the other hand, is a fine art, and there is often an opportunity for a higher return. With a higher return profile, however, there is also more risk, as you need to understand the intricacies of certification.
Dick Quitmeyer, principal owner of Yellow River Rare Coins, has been involved with coins since the 1950’s when he received his first Silver Dollar as a child. In his 60+ years dealing in coins, he has amassed a wealth of knowledge about collecting and investing.
We maintain a full inventory on collectible and investment grade Coins. Dick is an expert in Coin Grading as well as Problem and Counterfeit Coins. So contact us with your questions.