Business, Legal & Accounting Glossary
Any precious metal which exists in a form in which its primary value comes from the worth of the metal, and not from an artificial currency value is referred to as bullion. Most often bullion is traded in the form of coins that are minted by national governments, or in bulk ingots.
While the coins issued by the government have a nominal value that is assigned to them upon minting, virtually this value is always overshadowed by the commodity value of the metal itself. For instance, gold coins are issued by most governments and these have a currency value of between US$10 and US$100, but they usually contain at least one troy ounce of gold. Given that there has been a rise in the exchange rate of gold consistently, and from the beginning of the twenty-first century on it was worth at least US$350 a troy ounce, you can see yourself that the government-assigned currency value of a bullion coin is essentially meaningless.
There are three factors that affect the value of bullion and these are:
metal, weight, and purity
In determining the overall value of bullion the metal the bullion consists of is obviously very important: gold is more worthy than silver, while platinum is more worthy than gold.
Usually, the weight of bullion is measured in troy ounces, where approximately one troy ounce is equal to 31g.
In bullion purity also varies widely, though by many countries the coins are released having 99.99% purity, which is as close as one can practically get to pure.
The average minting of a bullion coin is less than 10,000, which is one of the reasons why they are so popular with collectors. Extremely limited presses are also relatively frequent, countries sometimes release as few as 20 to 50 of a certain bullion coin.
Among collectors silver coins are particularly more popular; due to the reason that they have a relatively low worth of their metal, and in general they are cheaper. Due to this reason, silver bullion coins are often valued substantially above the market value of silver, more than gold or platinum.
At this point, at least one type of bullion coin is offered by most major countries. Usually, these coins will have one main symbol which is used by them each year, though every year some nations choose to keep the same theme but they alter the image.
Following are the examples of bullion coins:
U.S. Eagles: They are minted in platinum (since 1997), gold, and silver, these coins are embossed with the image of a bald eagle. Gold Eagles are having 91.67% purity. Canadian Maple Leafs: These coins are minted in platinum, gold, and silver, having the Canadian maple leaf embossed. Gold Maple Leafs were the first such gold coins to be released that were 99.99% pure. By Canada a very limited platinum coin is also released, depicting wildlife.
Chinese Pandas: These come in platinum, gold, silver, palladium, copper, and brass. A panda bear is depicted by them, the image of which changes each year. China has also got a short-lived series of unicorn gold and silver coins, and they have a limited run of twenty bullion coins in excess of 260 troy ounces (8kg). South African Krugerrands: These were the first bullion coins that were ever released by a nation, and they are made of gold.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Bullion are sourced/syndicated and enhanced from:
This glossary post was last updated: 13th November, 2021 | 0 Views.