What is bullion and what are its different types?

Bullion is precious metal, usually gold, silver, platinum or palladium, that is valued purely for its metal content rather than for artistry, rarity or face value. It is typically cast or struck into bars, coins or ingots of a stated weight and purity, so that buyers and sellers can price it directly against the spot market.

What makes something "bullion"

Three things define bullion: a known weight, a known purity (fineness) and a form that is easy to trade. A one troy ounce .999 fine silver bar is bullion because anyone can look up spot silver (currently around $59.51 per troy ounce) and know what the metal inside is worth. A silver necklace is not bullion, even though it contains silver, because its weight and purity must be tested and its value is tied up in design and workmanship. Purity is expressed as fineness: .999 means 99.9% pure, .9999 means 99.99% pure.

The two main types

Bullion can be categorized into two main types: coin bullion and bar bullion.

• Coin bullion consists of legal-tender coins struck by government mints. Examples include the American Gold Eagle, American Gold Buffalo, Canadian Gold Maple Leaf, South African Krugerrand, American Silver Eagle and Canadian Silver Maple Leaf. They carry a face value, but that value is symbolic; the coin trades on its metal content. Because they are government-backed, instantly recognizable and hard to counterfeit, they carry higher premiums over spot than bars.
• Bar bullion comes in various shapes and weights, from one gram wafers up to 1,000 troy ounce industrial silver bars and 400 troy ounce gold bars. Bars are produced by private refiners and some government mints, are stamped with weight, purity and maker, and usually carry the lowest premium per ounce. Ingots are simply cast (poured) bars, as opposed to minted bars that are cut and stamped from rolled metal.

Other forms you will encounter

Rounds look like coins but are made by private mints and have no face value or legal-tender status. They offer near-bar pricing in a coin-shaped format and are a popular way to buy silver. "Junk silver," meaning pre-1965 US dimes, quarters and half dollars that are 90% silver, is often treated as bullion too, because it trades on melt value: a full $1 of face value contains about 0.715 troy ounces of silver. Fractional bullion (half, quarter and tenth ounce coins) allows smaller purchases at a somewhat higher premium per ounce.

Bullion is primarily used as an investment or for industrial purposes. Investors hold it as a hedge against inflation and a safe-haven asset, and central banks hold gold bullion as part of their reserves. Industry consumes large quantities of silver, platinum and palladium in electronics, solar panels and catalytic converters. Bullion that meets IRS purity minimums (gold 0.995, silver 0.999) can also be held in a Precious Metals IRA.

Accurate Precious Metals both sells and buys bullion in all of these forms. You can browse our current selection at the online shop, read the bullion buyers guide to choose between coins, bars and rounds, or see what we pay for gold bullion you already own.