Bullion bars and coins are refined precious metal products, particularly gold and silver but also palladium and platinum. Bars are considered “investment grade” gold when they have a minimum purity of ‘two nines five’ (995 or 99.5% pure). Investment grade silver needs to have a minimum purity of ‘three nines’ (999 or 99.9%), while platinum and palladium are required to have a purity of ‘three nines five’ (9995 or 99.95%). Coins need to have a minimum fineness of 900/1000 (90%) and have been minted after 1800 to be categorized as bullion. The price of a bullion product is determined by its mass and purity rather than by any engraved face value.
The term "precious metals" designates a number of rare and metallic chemical elements which are not radioactive and have a high value. They are discovered and extracted from the earth in the form of ore. Refiners then use chemicals and extreme heat to separate the precious metal from the surrounding rock before applying further treatments and converting it into bullion products.
Precious metals are measured in troy ounces. There is some debate as to the origins of the term. However, it is generally thought to refer to a medieval fair that was held in the French town of Troyes and where gold and silver could be purchased. The troy ounce is equivalent to 31.1035 grams.
Used by mankind since millennia as medium of exchange, gold is considered an investment, a store of value and a tangible asset that offers protection from economic cycles and inflation. Buying gold means that you will not lose your purchase power. You preserve your wealth. Gold coins and bars will always have an intrinsic value, even in turbulent times. With its bright luster, the precious metal is also appreciated in the form of valuable items like jewelry. In the collective unconscious, gold has remained the symbol of success, power, and abundance.
Silver has also played a central role as monetary metal since time immemorial. For thousands of years the precious metal has kept its intrinsic value. Mentioned in the Book of Genesis, mined as early as the 4th millennium BC, and bedrock of the Roman and Chinese Empires, it has been the basis of the most long-lasting monetary systems throughout human history. Today, it is widely used in medicine, photography, electronics and jewelry. Silver constitutes a reliable store of value and an industrial metal with strong potential.
Bullion bars are the most popular form of buying physical gold or silver. Their rectangular shape is instantly recognized all around the world. Bullion bars come in a wide range of different weights, with the gram or the ounce as the most common unit of measurement. The weight, the fineness, the seal of the refiner and the unique serial number are stamped onto each bar. Most gold bars are sold accompanied by a certificate of authenticity. Bullion bars are the preferred format for most investors due to their low premium (this premium is tacked onto the official gold spot price).
Coins must have been minted after 1800 and have a purity equal to or greater than 900/1000 (90%) to be considered "bullion". Bullion coins are available in different weights, the most common being: 1 ounce, 1/2 ounce, 1/4 and 1/10 ounce of gold. They are minted by government institutions in limited quantities each year and have the status of legal tender in their country of origin. However, the value of the gold they contain by far exceeds their official face value. The symbols engraved on the coins may vary depending on the year of issue and give a numismatic (collectible) value to the coin. The value also depends on the "mintage", i. e. the total number of coins that have been produced in one year. Additionally, gold coins have a significant manufacturing cost, which results in higher premiums.
The premium is the difference between the intrinsic value of a coin or bar (depending on the weight, purity and spot price) and its selling price. This price varies according to production costs, offer, demand, state of preservation, product size and the purchase quantity. Coins also have a higher premium due to their numismatic value, while bars generally have lower premiums than coins due to their relatively simply production process. The purchase of large bars allows you to benefit from even lower premiums and to maximize the number of ounces you can buy with your investment.
