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Buying Gold Bullion
What are Gold Bullion Coins?
Gold Bullion coins generally refers to gold coins
whose value is contained entirely in their intrinsic gold value, and
not in their desirableness for collectors. Gold sovereigns are
referred to as "bullion" if they are valued purely by their gold
value. However, this definition is only partly true as almost all gold
sovereigns have some value or premium as coins over and above their
pure gold value. This means that most gold coins which are described
as "bullion" will be in poor condition.
However, this is not always how the word "bullion" is
used. Some sellers use the word to refer to all the sovereigns they
sell, with the exception of very collectable examples. The
Royal Mint use the word
"bullion" to refer to most of their sovereigns which are not proof.
These gold "bullion" coins may be in BU (Brilliant
Uncirculated) condition.
The date on a bullion sovereign may be the date of
the die and not the date on which the coin was struck.
Therefore, it is important to look beyond the word
"bullion" if you are buying gold coins to see what the seller
actually means.
Bullion Coins
While obsolete gold coins are primarily collected for their
numismatic value, gold bullion coins today derive their value from
the metal (gold) content.
South Africa
introduced the Krugerrand in 1967 to cater to this market; this was
the reason for its convenient and memorable gold content—exactly one
troy ounce. It was the first modern, low premium (i.e. priced only
slightly above the bullion value of the gold) bullion gold coin.
Bullion coins are also produced in fractions of an
ounce – typically half ounce, quarter ounce, and one-tenth ounce.
Bullion coins do not carry a meaningful face value, as their value
is mainly dictated by their troy weight and the current market price
of the precious metal. (If a face value is minted on the coin, it is
done for legal or other reasons and it is nearly always
significantly less than the actual value of the coin.) Gold has an
international currency code of XAU under ISO 4217.
In 2007 the Canadian Mint produced a 100 kg gold coin with a face
value of $1,000,000, though the gold content was worth over $2
million at the time. It measures 50 cm in diameter and is 3 cm
thick.
It was intended as a one-off to promote a new line of
Canadian Gold Maple Leaf coins, but after several interested buyers
came forward the mint announced it would manufacture them as ordered
and sell them for between $2.5 million and $3 million. As of May 3
2007 there were five confirmed orders. Austria had previously
produced a 37 cm diameter 31 kg gold coin with a face value of
€100,000.
Gold bullion coins usually come in 1 oz, 1/2 oz, 1/4 oz, 1/10 and
1/20 oz. sizes. Most countries have one design that remains constant
each year; others have variations each year, and in most cases each
coin is dated.
A 1/10th oz bullion coin is about the same size as a
U.S. dime.
A 1 oz. gold bullion coin is about the size of a U.S.
half dollar.
Gold Bullion Value of a Sovereign
Gold Price x 0.2354 = Gold Bullion Value of a
Sovereign
The London Bullion Market
Association
For the daily Gold and Silver Price check
the London Bullion Market website.
http://www.lbma.org.uk/statistics_current.htm
Learn
about: The Gold Standard
PLEASE SEEK
PROFESSIONAL ADVICE BEFORE YOU BUY OR SELL GOLD, SILVER & COINS.
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