Many people seem to be confused about exactly what is involved in investing in bullion.

Gold Bullion is not restricted to buying gold bars or wafers.  Gold bullion is a term that includes many types of gold coins. Some coins are pure gold while others are alloyed with copper. In any case, gold bars are not necessarily better or worse than gold coins. Many people like the fact that modern gold coins are for the most part legal tender in the country they are produced in. If you’re looking for 24KT gold you can look for gold bars, which are made by a wide variety of private Mints. They can be made in Switzerland, USA, Turkey or almost any other major country. There are also a variety of pure gold (24KT) coins available.

Among a few are as follows.

The US makes a 1 oz Gold Buffalo coin. They also make a 1 oz gold Eagle coin that is not pure gold but has 1 ounce of gold in the coin.

Countries including Canada, Great Britain, Austria, Australia, Mexico, and China to name a few of the major producers also make pure gold coins. A pure gold coin or bar is .9999 fine gold.

What makes a coin a “Bullion” coin?

A bullion coin or bar trades daily based on the price of gold. You will pay a premium above the spot price for ANY gold bar or coins. This is a market premium that considers the price to produce the gold coin or bar and the market demand. 

Do not confuse this with so called “collectable” coins which may be influenced by the price of gold but have a high premium (price you pay over the actual gold value).

Beware of buying collectable gold coins if you are a novice or new to gold buying.

Most gold bullion bars can be purchased for $100-$250 over the spot price of gold. That is the price you will see on American Federal’s website or a wide variety of sites online.

Keep it simple. Stay away from dealers offering you “deals” on off beat coins such as special issue Coins from Canada, Malta, or a variety of other sources. You will not capture the high premiums when you sell.

Another area that has been promoted is the Pre 1933 US gold coins. While they are certainly beautiful and somewhat historic they are not the investment you want if you are looking for bullion

I have had investors tell me they paid $950 for ¼ oz gold coins and $85 for 1 oz silver coins. That is 3 to 4 times the value of the underlying metal.

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  • Nick Grovich