The Complete Guide for Bullion Coin Collectors

Did you know that gold was first used as currency in the form of coins in 600 BC, in what is now Turkey? More than a thousand years later, gold is still one of the most popularly traded metals and is a favorite among investors. However, it is important to note that gold is not the only type of metal you should find interesting if you plan on investing.

In fact, there are many different types of bullion that you need to consider before you spend any of your own money. These different types of bullion include gold bullion, silver bullion, copper bullion, and more. Not only is investing in these different types of metals a great way to diversify your portfolio, but if you're a collector of bullion coins, this is a great way to add to your collection.

If the idea of gathering different kinds of bullion is appealing to you, you're in the right place to have all your questions answered. In this article, we'll explore everything you need to know about bullion and its variations. To start off, we'll take a closer look at what you need to know about bullion in general.

What You Need To Know About Bullion

If you want to start investing in bullion, you need to know everything about it and what it is. The first thing you need to know is that bullion is usually pure gold or silver in the form of bars or sometimes coins. What is pure gold or silver, you might ask?

For gold bars, sometimes known as ingots, the purity must be at least 99.5% gold. The purity standard for silver is a little bit higher at 99.9%.

Bullion in this form is usually kept in very secure locations such as at important banks or in government reserves. However, some esteemed investors may also keep the bullion in this form if they are able to keep it secure.

As for terminology, you should know that if you ever hear the term "parted bullion" it refers to bullion that has no other metals in it. This is a token of high purity. On the other hand, the term "unparted bullion" means that the bullion does have some other metals mixed in, even if it only is a very small percentage.

Gold bullion is a huge part of our economy and has been used as legal tender. In fact, out of all the gold that we have ever mined out of the earth, 20% of it is in the hands of banks located around the world. This bullion is important for economies across the globe and it is often used to help countries pay off debts.

If you're not yet a full-time investor, you may be able to start investing in bullion through ETFs. Otherwise, they can be found on precious metal markets or the bullion market.

What Is The Bullion Market

The bullion market, as the name suggests, is a market that deals primarily in the buying and selling of bullion. It is an over-the-counter market and it is open at all hours of the day and night. These markets are all over the world, but much of the trading can be done from the comfort of your home via your phone or your computer.

If you keep a close eye on the bullion market, you will see that prices fluctuate up and down. The price of bullion can change for a variety of reasons. More often than not, bullion prices will change because large companies are buying or selling large quantities of gold that are used for the creation of gold jewelry, for example.

The perception of the economy by the public is also a very important factor when considering the price of any commodity on the stock market. For example, if people perceive that the economy is not doing well, more gold may sell during this time because gold is always seen as a safe and stable investment. However, if the economy is doing well, on the other hand, the bullion prices may be very calm and unchanging.

It is important to remember that while gold bullion usually has the spotlight in the global markets, silver bullion and bullion of other metals are also very significant. However, it is most often gold bullion that is in the highest demand which is why other precious metals may be forgotten about.

While gold bullion is generally a safe investment that pays well in the long term, as with any investment, you should know that there is always the possibility that you could lose money. Even so, let's take a closer look at the ways in which you can invest in bullion.

How To Invest In Bullion

The idea of owning gold (or silver) bars and coins can seem like a very far away dream, but if you have the funds to fuel your investment ambitions, you may find that this dream is not so far away after all. However, there is not just one way to invest in gold bullion. First, you need to decide whether you want to invest in physical gold bullion or in funds and stocks.

Investing in physical gold can be a good idea if you're worried about economic instability or if something might happen to the stock market. There are two ways to invest in physical bullion: you can either buy the gold bullion itself or you can obtain the bullion in the form of paper.

You will most easily be able to buy bullion from a bullion dealer. However, when doing this, make sure you find a dealer who is reputable. Once you have your bullion in physical form, it is important to keep it safe. To accomplish this, you may lock the bullion away in a safe or you may have a bank keep it safe for you.

If you're worried about the idea of keeping your bullion in a bank, don't be. If something were to happen to the bank such as bankruptcy, you will still have full ownership over the bullion. This is because the bank can claim no ownership over the bullion even though it is residing at the bank.

In short, you will always have full ownership over your bullion. However, what if you're not interested in investing in physical bullion? The next best way to invest in bullion is with exchange-traded funds or ETFs.

Investing in Bullion With ETFs and Futures Contracts

The downside with investing in bullion via ETFs is that you are not really investing in physical bullion. Instead, you are investing in gold and silver bullion certificates. This does not mean you should steer clear of ETFs altogether.

Keep in mind that when you invest in bullion certificates such as gold certificates, these certificates can easily be traded in for the physical metal. You may also trade in these certificates for cash if you don't want real gold.

Investing in ETFs is a great way to start off your bullion investment journey since investing in ETFs is quite easy. They are also cheaper to invest in when compared to physical bullion.

A slightly more complicated way to invest in bullion is with futures contracts. These contracts require that you agree to buy (or sell) a certain amount of bullion at a set price. However, this trade will only occur at some point in the future, hence the name of futures contracts.

Until the date of the transaction, you will not own the bullion, but you will be the proud owner of a paper gold contract. When the transaction occurs, only then will you own the gold you have paid for.

It is important to know that these futures contracts can be very expensive with some ranging around $100,000 per contract or more. Because futures contracts deal with large quantities of gold, if the economy is favorable, you can find yourself making huge profits. However, on the other hand, if the price of gold bullion decreases, you can also find yourself losing large chunks of money.

Because futures contracts are so expensive and because the way they work can be confusing to new investors, it is best to have more investing experience before investing in futures contracts.

Understanding The Different Types of Bullion

So far, we have only explored what you might expect when investing in gold bullion bars and other forms of gold bullion. As mentioned at the beginning of this article, there are actually many different types of bullion that you can choose to invest in. These types can range from cheaper metals like copper to pricy metals such as platinum bullion.

However, before diving into the world of precious metals, it is important that we take a closer look at the different physical forms of bullion. While we have discussed a little bit about bullion bars, we need to know more about bullion coins and the lesser-known bullion rounds. Not only is knowing this information beneficial if you want to invest in a certain amount of bullion, but it is useful information for coin collectors as well.

Since coin collection has long been a popular hobby, we'll start by taking a closer look at bullion coins and what makes them unique.

What Are Bullion Coins

Bullion coins are defined by the fact that they have been minted by the government. They are also considered legal tender. The authenticity of bullion coins is supported by the government, and for this reason, bullion coins can often be a great and safe investment.

If you are already a collector of bullion coins, you may know that some coins are more prized by collectors than others. For example, few coin collectors can go without owning the American Silver Eagle or the Canadian Maple Leaf coins.

Bullion coins may come in different weights. They are usually only a fraction of a single Troy ounce which is around 31.1 grams. A problem you may come across with bullion coins is that many of them are not pure gold. For example, the ever-popular American Eagle coin is only around 91.67% pure gold.

However, if you are interested in bullion coins only to collect them, purity may not be very important to you. Instead, the size of the coin or the date it was minted may be more significant to you. For example, many gold bullion coins minted early in the history of the United States are now considered very rare and valuable, not to mention sought after by many coin enthusiasts.

However, you might be wondering what the difference is between bullion coins and rounds. We'll take a closer look at rounds next.

What Are Bullion Rounds

At first glance, bullion rounds appear the same as bullion coins. After all, they have similar stamped designs on their surfaces much like coins do. However, these rounds are not coins at all but really bullion bars in the shape of coins.

This may seem confusing, but to put it simply, bullion rounds are not used as legal tender while bullion coins are. This is because bullion rounds are privately minted by the government.

The downside with bullion rounds is that it is difficult to find them made of other metals beyond gold and silver. Bullion coins and bars, on the other hand, can often be found made of a variety of metals.

What Are Bullion Bars

As with bullion rounds, bullion bars are privately minted and are not generally considered legal tender. Bars come in the shape of rectangles and may have designs stamped on their sides. Many investors choose to invest in bars rather than rounds or coins because they save money per troy ounce per bar compared to other forms of bullion.

As we have already seen, bullion bars are very popular on the market. However, they don't have much value for collectors. An advantage of bullion bars is that beyond gold and silver, rhodium and palladium bars, along with other metals, are on the rise.

This diversification makes them especially attractive to potential investors. This is not to mention that bars can be easily stored in contrast to coins and rounds which requires more meticulous and organized storage techniques. However, now that we've seen all the forms that bullion comes in, it's time we take a closer look at bullion of different metals.

Investing In Copper Bullion

If you've invested in precious metals in the past, you may scoff at the idea of investing in copper bullion. However, don't be too quick to judge. Investing in copper bullion can come with more benefits than you might expect.

Investing in copper bullion, whether in the form of bars or coins, can be a great way to start investing in bullion. This is because copper bullion is often significantly cheaper than gold and silver bullion or bullion of other precious metals. It is also more affordable by weight when compared to other kinds of bullion which can make for a very efficient choice.

Beyond that, copper may be more valuable than you thought. For example, pennies used to be made of a significant percentage of copper in the past, but since the price of this metal has increased, fewer and fewer coins used for currency use copper at all. In fact, pennies minted before 1982 were 95% copper while today, pennies are 97% zinc and coated with a thin layer of copper to keep their typical bronze appearance.

Because of this change, pennies made before 1982 are actually worth significantly more than a single penny because of their high copper content. This has led to some people stockpiling old pennies as a kind of investment. However, if you want to really invest in copper, it's best to stick with copper bullion since bullion is purer than any pennies were in the past.

Before investing in anything, always study the prices on the stock market. For example, when studying the fluctuations in copper prices, you'll be able to have a better understanding of what you're investing in. As with other types of bullion, copper can be bought online in physical or non-physical form.

Investing In Platinum Bullion

On the other side of the investing and collecting spectrum is platinum bullion. While copper bullion is very common and can easily be bought, platinum bullion is a premium investment and can be hard to come by. Because of this, it may be more difficult for beginner investors to get their hands on platinum bullion.

So, what makes platinum bullion so special? The primary fact you need to know about platinum is that it is 15 times rarer than gold. However, this doesn't mean that it competes with gold on the bullion market.

In fact, because platinum is so much rarer than gold, not many investors or collectors can boast of having platinum as part of their portfolios. Also, because of its rarity, the demand for platinum is usually much greater than the actual amount of available platinum.

Why is platinum so rare? One of the factors contributing to this issue is that platinum is often hard to mine and extract from the earth. It is also found at a deeper level in the earth compared to gold which makes it hard for mining equipment to reach.

However, if you're able to get your hands on some platinum, this can prove to be a great investment, especially in the long term. This is because the mining industry is slowly improving on the way it extracts platinum. As more platinum enters the bullion market, its price is likely to increase along with its demand.

As with any other metal, be sure to keep an eye on its price on the market. An interesting variation concerning platinum is that it behaves opposite to gold on the market.

For example, when the economy is perceived as unstable, platinum prices tend to decrease. Conversely, when the economy is stable, the price of platinum will rise.

Investing in Silver Bullion

While silver came up in this article before, we have not yet discussed it in as much depth as the other bullion metals. While gold is often considered a safe-haven investment, silver, although still very popular on the market, tends to be a bit more volatile. However, this does not mean that it doesn't make for a great investment.

The benefit of silver is that it is more common than platinum but rarer than copper. Also, while it is not as in high demand as gold, it is still a greatly sought-after precious metal. These factors all make silver an ideal investment choice if you're not prepared to invest in more expensive metals like gold or platinum.

If you decide to invest in physical silver bullion, you also have the advantage of having tangible legal tender on your side. Remember, you can invest in physical silver in coins, bars, or rounds, all of which can offer financial stability and even a return on your investment if the price of silver rises.

For coin collectors, investing in silver coins may be an especially attractive choice. This is because many collectible coins such as the American Eagle are made of silver.

However, keep in mind the fluctuations in silver prices before you make an investment. Since silver tends to change in price more than gold, it's best to keep a close eye on the market lest you risk losing money on your investment. Although, in the long-term, silver, much like gold, can be a safe investment.