Bullion refers to any precious metal in a form in which its primary value comes from the worth of the metal, not from an artificial currency value. Bullion is most often traded in the form of coins minted by national governments, or in bulk ingots.
While government issued coins have a nominal value assigned to them upon minting, this value is virtually always overshadowed by the commodity value of the metal itself. As an example, most government issued gold coins have a currency value of between US$10 and US$100, but usually contain at least one troy ounce of gold. Given that the exchange rate of gold consistently rises, and from the beginning of the twenty-first century on was worth at least US$350 a troy ounce, one can see that the government-assigned currency value of a bullion coin is essentially meaningless.
The value of bullion is affected by three factors: metal, weight and purity. The metal the bullion consists of is obviously important in determining its overall value: gold is worth more than silver, while platinum is worth more than gold. The weight of bullion is usually measured in troy ounces, where one troy ounce is equal to approximately 31g. Purity also varies widely in bullion, though many countries release coins with 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, one of the reasons they are so popular with collectors. Extremely limited presses are also relatively frequent, with countries sometimes releasing as few as 20 to 50 of a certain bullion coin. Silver coins, particularly, are popular with collectors; because of the relatively low worth of their metal, they are cheaper in general. For this reason, silver bullion coins, more than gold or platinum, are often valued substantially above the market value of silver.
At this point, most major countries offer at least one type of bullion coin. Usually these coins will have one main symbol they use each year, though some nations choose to keep the same theme but alter the image yearly.
Examples of bullion coins include:
- U.S. Eagles: Minted in platinum (since 1997), gold and silver, these coins are embossed with the image of a bald eagle. Gold Eagles are 91.67% pure.
- Canadian Maple Leafs: These coins are minted in platinum, gold and silver, with the Canadian maple leaf embossed. Gold Maple Leafs were the first 99.99% pure gold coins to be released. A very limited platinum coin is also released by Canada, depicting wildlife.
- Chinese Pandas: These come in platinum, gold, silver, palladium, copper and brass. They depict a panda bear, the image of which changes each year. China also had a short-lived series of unicorn gold and silver coins, and a limited run of twenty bullion coins in excess of 260 troy ounces (8kg).
- South African Krugerrands: These were the first bullion coins ever released by a nation, and are made of gold.