A bullion coin is a precious metal coin struck kept as a store of value
or an investment, and not usually used in day-to-day commerce. Investment coins
generally have a purity at least 90.0 percent of the precious metal used, and is
or has been used as legal tender in its country of its origin.
Bullion coins are normally but not exclusivly available in gold and silver, with
the exception of the Krugerrand and the Swiss Vreneli which are only available in gold.
The American Eagle series is available in gold, silver and platinum, while the Canadian
Maple Leaf series is available in gold, silver, platinum and also palladium.
Bullion coins are usually available in a varity of weights. These weights are usually
multiples or fractions of 1 troy ounce. However, some bullion coins are produced in
limited quantities in kilograms (kg) and some are even heavier.
Bullion coins often sell at a premium over the market price of its base metals
price on the commodities exchanges. This is because of their comparative small size
and the expenses associated with manufacture, storage and distribution. The margin
that is paid may vary depending on what type of coin it is, the weight of the coin,
and of which precious metal it is made. The premium also is affected by popularity
of the coin at that time.
Bullion Trading term you should know.
Bullion Coin A bullion coin is a coin that is valued by its weight in a specific precious metal.
Collector or Rare Coin The value of a collector or rare coin is based upon the coin’s rarity,
demand, condition and mintage. A collector or rare coin may be worth more than its bullion value.
Spot price The spot price is the market price for immediate delivery of a commodity, such as gold,
silver or platinum. Melt value: Melt value refers to the basic intrinsic bullion value of a coin if melted and sold.
Spread The spread is the difference between what a dealer will charge to sell an item
and what he will pay to purchase it.
Troy ounce The troy ounce is the measurement used in the pricing of precious
metals such as gold and silver. The troy ounce is 480 grains or exactly 31.1034768 grams.
Ask The price a seller is willing to accept for a security, also known as the offer price.
Along with the price, the ask quote will generally also stipulate the amount of the security
willing to be sold at that price.
Bid An offer made by an investor, a trader or a dealer to buy a security.
The bid will stipulate both the price at which the buyer is willing to purchase
the security and the quantity to be purchased.
