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What is 'Bullion'? All You Need To Know

Published by honor in category Precious Metal Information Guides on 22.05.2024
Gold price (XAU-GBP)
1,839.75 GBP/oz
  
+ GBP3.90
Silver price (XAG-GBP)
23.37 GBP/oz
  
+ GBP0.02
legal tender

Bullion refers to precious metals, primarily gold and silver, valued by their weight and purity rather than by face value as money. These metals are typically in the form of bars, ingots, or coins and are used as a reserve asset by governments, financial institutions, and investors.

Understanding Bullion

Bullion is often bought and sold in the financial markets and serves as a hedge against inflation and economic uncertainty. The term “bullion” originates from the French minister of finance under Louis XIII, Claude de Bullion, emphasising its historical importance in the financial world.

Bullion is typically categorised into two main types:

Gold Bullion

yale of beaufort

Gold bullion is the most popular form of investment bullion. It comes in various forms such as bars and coins. Gold bars range from small sizes like one gram to large ones weighing several kilograms. Gold coins, like the British Britannia Gold Coins (produced by The Royal Mint) and the Canadian Gold Maple Leaf, are also highly sought after by collectors and investors.

  1. Gold Bars: These are rectangular blocks of gold and are available in various sizes and weights. Common gold bullion bars come in sizes include one ounce, ten ounces, and one kilogram. Large gold bars, like the 400-ounce bar, are typically used by institutional investors and central banks.
  2. Gold Coins: Fine gold coins are minted by various countries and often have a face value as legal tender. They are often more expensive than bars due to their collectible nature and intricate designs.

Silver Bullion

Silver bullion, like gold, is available in bars and coins. Silver bars come in sizes from one ounce to 1kg. Popular silver coins include the Austrian Silver Philharmonic. Silver is often more affordable than gold, making it accessible to a broader range of investors.

  1. Silver Bars: These are available in a wide range of sizes, from small one-ounce bars to larger 100-ounce bars. Silver bars are a cost-effective way to invest in silver due to their lower premiums over the spot price compared to coins.
  2. Silver Coins: Silver coins are often issued by government mints and have legal tender status. They are popular among investors due to their beauty and the prestige of owning government-backed bullion.

Why Invest in Bullion?

Hedge Against Inflation

Bullion is considered a safe-haven investment. During periods of economic instability or high inflation, bullion tends to retain its value, providing a hedge against the depreciating value of paper currency. Historically, during times of financial crisis, such as the 2008 financial meltdown, the value of gold surged as investors sought refuge in tangible assets.

Portfolio Diversification

Including bullion in an investment portfolio can reduce risk and increase stability***

Precious metals often perform well when other asset classes, such as stocks and bonds, are underperforming. For instance, during stock market downturns, the price of gold often rises, balancing out losses in other areas of the portfolio.

Tangible Asset

Bullion is a physical asset that you can hold. Unlike stocks or bonds, which are digital or paper representations of value, bullion is tangible and can be stored securely. This physicality offers a sense of security and ownership that digital assets cannot provide.

Global Acceptance

Gold and silver bullion are recognised and valued worldwide.

This global acceptance ensures liquidity, allowing investors to easily buy or sell bullion in major financial markets

Central banks around the world hold significant amounts of gold as part of their foreign reserves, underlining its universal appeal.

How to Buy Bullion

Purchasing bullion involves several steps:

Determine Your Budget

Before buying bullion, determine how much you are willing to invest. This helps in choosing the right size and type of bullion. For example, if you have a smaller budget, you might opt for smaller gold coins or silver coins. Larger budgets can afford more substantial bars or a mix of both metals.

Select Your Bullion

Decide whether you want to invest in gold or silver and in what form (bars, or coins). Each form has its own benefits, with coins often carrying a premium due to their collectible nature.

Bars generally have lower premiums over the spot price (market price), making them a cost-effective way to invest in precious metals

Additionally, you may have a personal preference from which mint or refinery your bullion comes from, e.g The Perth Mint, The Royal Mint, or PAMP.

Verify Purity and Weight

Ensure the bullion you purchase is of high purity and accurately weighed. Gold bullion should have a purity of at least 99.5% gold content, while silver bullion should be at least 99.9% pure. Reputable dealers provide certificates of authenticity and assayer marks, which guarantee the weight and purity of the bullion.

Examples of Popular Bullion Products

British Britannia Gold Coin

First introduced in 1987, the Gold Britannia coin is known for its high gold purity. From 2013 onwards, it has been produced with a fineness of .9999 (24 carats). The coin portrays the iconic image of Britannia, a symbol of strength and integrity, while the reverse typically depicts the effigy of the reigning monarch.

CGT EXEMPT
britannia-1-oz-gold-coin-reverse-2024 In Stock

1oz British Britannia Gold Coin 2024

We sell 1+ £1,886.09 1818.78 1818,78 1818.78 1818,78 1818.78 1818,78 1886.09 1886,09 1884.25 1884,25 1880.57 1880,57
We sell £1,880.57 1818.78 1818,78 1818.78 1818,78 1818.78 1818,78 1886.09 1886,09 1884.25 1884,25 1880.57 1880,57
We buy £1,818.78
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Canadian Gold Maple Leaf

The Canadian Gold Maple Leaf is produced by the Royal Canadian Mint and is one of the purest gold coins available, with a purity of 99.99%. The coin’s design features the iconic maple leaf, a national symbol of Canada, and is highly prized for its beauty and craftsmanship.

Obverse of 1 oz Canadian Maple Leaf Gold Coin In Stock

1oz Canadian Maple Leaf Gold Bullion Coin 2023

We sell 1+ £1,913.69 1800.41 1800,41 1800.41 1800,41 1800.41 1800,41 1913.69 1913,69 1910.01 1910,01 1904.49 1904,49
We sell £1,904.49 1800.41 1800,41 1800.41 1800,41 1800.41 1800,41 1913.69 1913,69 1910.01 1910,01 1904.49 1904,49
We buy £1,800.41
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Austrian Silver Philharmonic

The Austrian Silver Philharmonic coin is celebrated for its beautiful design featuring the Vienna Philharmonic Orchestra. It is a popular choice among silver investors due to its fine artistry and purity. The coin’s obverse showcases the Great Organ of the Golden Hall in Vienna, symbolising Austria’s rich musical heritage.

1oz Austrian Philharmonic Silver Coin 2023 reverse1 In Stock

1oz Austrian Philharmonic Silver Coin 2023

We sell 1+ £32.51 22.16 22,16 22.16 22,16 22.16 22,16 22.16 22,16 32.51 32,51 32.39 32,39 32.15 32,15 31.79 31,79
We sell £31.79 22.16 22,16 22.16 22,16 22.16 22,16 22.16 22,16 32.51 32,51 32.39 32,39 32.15 32,15 31.79 31,79
We buy £22.16
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Conclusion

Bullion represents a valuable and stable investment option for those looking to hedge against inflation, diversify their portfolio, and hold a tangible asset. Whether investing in gold or silver, please note it is essential to buy from reputable bullion dealers and ensure secure storage.

Understanding the different forms and types of bullion, along with their benefits, can help investors make informed decisions and achieve their financial goals. Investing in bullion offers both financial security and the satisfaction of owning a piece of history.

Gold price (XAU-GBP)
1,839.75 GBP/oz
  
+ GBP3.90
Silver price (XAG-GBP)
23.37 GBP/oz
  
+ GBP0.02

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