Bullion Bars, Rounds or Coins? Making the Right Choice For You
Bullion can be purchased in three different forms: bars, rounds and coins. Making the right choice for your investment portfolio is easy when you know the differences between the three available product types.
Designed to replicate the look and feel of government-issued coins, bullion rounds are minted by private companies and carry no face value. While they look a lot like currency, these flat, round pieces of bullion are not meant for circulation. They are typically the most affordable way to get started in Precious Metals collecting because their value is derived exclusively from the content of the Gold, Silver, Platinum or Palladium contained within. The term “bullion” is actually derived from an old French word meaning “boiling.” The worth of a bullion round is determined solely by the “melt value” of the Precious Metal. Because a private mint strikes each piece, you can find an eclectic variety of designs, from animals to holidays to pop culture icons.
While private firms produce rounds, bullion coins must be struck by sovereign governments. Additionally, while a bullion coin gets most of its value from its content of Precious Metal, additional factors can add premium value to coins. Because government institutions issue these coins, some investors have a greater sense of trust in the authenticity and are willing to pay a bit more than the current spot price of the metals. Although not intended for circulation, Silver and Gold bullion coins are stamped with a monetary amount by the issuing country and are guaranteed to retain that value at the central bank of that country, even if the Precious Metal content loses value.
Bars of Gold are what many people imagine when they hear the word “bullion.” They are strikingly attractive objects, recalling scenes from countless movies and legends. Available in many shapes and sizes, a bullion bar can be struck by both private and public institutions, so a solid knowledge of Precious Metals investing is vital before you make a purchase. Gold and Silver bars are valued almost exclusively for the melt value of their content, although some people will pay a slight premium if a trusted government authority produced the bar. Privately minted bullion bars traditionally offer the best price-per-ounce to purchasers.