Physical Corner

Bullion

Precious metals in bulk form are known as bullion, and are traded on commodity markets . Bullion metals may be cast into ingots, or minted into coins . The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money .

Many nations mint bullion coins, of which the most famous is probably the gold South African Krugerrand . Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion. For instance, the United States mints a gold coin (the Gold Eagle ) at a face value of USD 50 containing 1 troy ounce (31.1035 g) of gold — as of April 2005, this coin is worth about USD 433 as bullion. Bullion coins' minting by national governments gives them some numismatic value in addition to their bullion value, as well as certifying their purity. The level of purity varies from country to country, with some bullion coins of as pure as .9999 available (the Canadian Maple Leaf coin meets this standard.) Note that a 100% pure bullion coin is not possible.

One of the largest bullion coins in the world is a 10,000 dollar coin minted in Australia which consists of a full kilogram of 0.999 pure gold, however China has produced coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold.

Tangible investments in bullion are often seen as a hedge against both inflation and economic downturn. Gold in particular has retained its value well over long periods of time. Meanwhile, silver bullion coins have become popular with coin collectors due to their relative affordability, and unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectables, far higher than their actual bullion value.

Source: www.wikipedia.org

"Borrowers will default. Markets will collapse. Gold (the ultimate form of safe money) will skyrocket."
Michael Belkin