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What is Silver Bullion?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 12 November 2016
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Silver bullion is silver that is considered “raw,” or “unformed,” so that the value of the pieces correlates to the normal value of raw silver. In the study of finances and precious metals, silver bullion is generally the metal in its raw form, distinguishing it from processed or “gilded” forms that have their own unique values. Understanding the role of this raw material in financial markets can help investors make the best decisions about precious metals like silver.

The original definition of silver bullion would be silver that is “in the lump” or unrefined, or otherwise unformed. A more modern definition of silver pieces of bullion refers to a refined product that, regardless of its refinement, has not been made into coins or other items. This telling difference in definitions shows how the financial world now treats various forms of refined precious metals.

In the financial world, silver bullion is silver in bars, lumps or other pieces that are not individually valued, and which meet specific standards of purity. The opposite of these are numismatic silver pieces, sculpture, and jewelry, all of which carry a value different from the value of raw silver. Some financial experts will talk about this distinction as numismatic versus raw, or numismatic versus bullion.

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Part of the role of silver bullion in today’s markets is to represent silver as a commodity. Precious metals are commodities, which means they are traded in specific ways. Bullion is the most concrete form of silver, which is valued according to its weight.

Investing in silver bullion means collecting actual pieces of raw silver, whether they are in bars or bits. Investors who want to benefit from price changes in silver can obtain these actual silver pieces, or contribute to different types of “silver funds” that track the price of this precious metal. Either one of these strategies can help an individual trader experience gains related to the gain in the price of silver.

In addition to the above options, investors can take advantage of some opportunities for buying coins that are still valued as raw metals. One coin, the Krugerrand, represents a form of gold bullion because it has a value by weight that is the same as the value of raw gold. With silver, some older coins may also have a value identical to bullion.

All of the above shows how silver bullion is a definitely valued product. Investors today have many decisions and how to make plays on silver as a commodity. Using bullion is the most direct and basic one, but a strategy that is still popular with some kinds of investors.

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