Gold Bullion

What Is Bullion?

Most of us probably think of gold bullion as large gold bars or ingots, the best known example being those stored in Fort Knox. The term is actually more general than that. "Bullion" just means a lump of precious metal, usually silver or gold. This can include large ingots but also small pure (or nearly pure) solid gold coins.

Many people who invest in gold prefer to buy bullion coins such as the American Gold Eagle, the South African Krugerrand or British Sovereigns. As with most commodity and currency trading, dealers rarely buy and sell at the same price - they make their profit from the difference between the prices, known as the spread. Many dealers refuse to accept payment by credit card because the cost of processing the card transaction eats too far into the spread.

Modern gold bullion coins are rarely intended to be spent as the value of the raw gold is usually more than the face value of the coin.

Gold Bars

Gold bars can be produced in one of two ways, either cast or minted. The level of purity required varies between countries, usually between 99.5% and 99.9%.

Cast

Cast bars are the traditional form of bullion and usually assocated with larger bars and ingots and are produced by pouring molten gold into a mould. The most common sizes of cast bar are 100g, 250g and 500g, however far larger weights are used by banks and governments.

Minted

Minted bars are a newer development, first issued in 1952. Their method of production is similar to that of gold coins: the bars are stamped out from a thin strip of metal. Often they are also stamped with a mark indicating their origin. Although large minted gold bars are available on the market, they are more commonly associated with lower weights.

If you're considering buying gold bullion as an investment then I suggest you seek advice from an expert regarding the suitability of the investment and any tax implications.