Bullion Coins
Bullion is the term used to describe precious metals that have been formed into shapes that facilitate easy storage, trade, and transport. These items have markings on them that tell how much of the precious metal is contained within. For example, the United States Gold Eagle is marked as being 22 Karat gold (.916 pure gold) and are available in the one-tenth, one-quarter, one-half, and one ounce sizes. Bullion is also found in other shapes, such as is the case with bars or medals. It is very easy to stack and store away gold bars as well as transfer them to someone who is buying gold bars.
These coins and bars are valuable for the metal contained within. For example, the Gold Eagle is marked at the five, ten, twenty-five, and fifty dollar denominations, but these are strictly for legal purposes: the amount of gold contained within these coins creates a market value that far exceeds that. Usually coins that are meant for circulation have far less or less pure precious metal than that and are rarely worth more than their denominations state. The purpose of monetizing these coins is to protect them as currency under current anti-counterfeiting laws.
The historic primary coin upon which most others are based is the United Kingdom’s Sovereign. Minted for centuries, its mix of alloy with a .9167 pure gold ratio was known for many years as the “crown standard.”
Many other countries began creating coins to take advantage of the well-paying gold bullion market. The South African Krugerrand was immensely popular, becoming the primary gold coin in the world market by 1980. The Canadian Maple Leaf began production in 1979, made of .9999 pure gold. The Chinese Gold Panda began in 1982 and was one of the first bullion coins to involve recurring changes to the reverse each year. The American Gold Eagle began minting in 1986 at .9167 pure, the first pure gold coin to be minted since the .9 pure Double Eagle was last minted in 1933. The Australian Gold Nugget began in 1986 as well.
Each of these coins contributed to a rapidly growing bullion market in which numismatists and gold investors alike clamored to get the most rare and beautiful coins. To this day, the gold market is booming, partly thanks to the wild demand bullion coins have created. When added to a portfolio, these coins are sure to reduce risks of falling stocks by adding a stable precious metal to the mix.