Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from the Anglo-Norman term for a melting-house where metal was refined, and earlier from Frenchbouillon, "boiling".[1] Although precious metal bullion is no longer used to make coins for general circulation, it continues to be held as an investment with a reputation for stability in periods of economic uncertainty. To assess the purity of gold bullion, the centuries-old technique of fire assay is still employed, together with modern spectroscopic instrumentation, to accurately determine its quality.
The specifications of bullion are often regulated by market bodies or legislation. In the European Union, the minimum purity for gold to be referred to as "bullion", which is treated as investment gold with regard to taxation, is 99.5% for gold bullion bars and 90% for bullion coins.[2]
Investors may choose to purchase physical gold bullion for several reasons – to attempt to hedge against currency risks, inflation risks, geopolitical risks, or to add diversification to an investment portfolio.[citation needed]
London bullion marketEdit
The London bullion market is an over-the-counter market for wholesale trading of gold and silver. The London Bullion Market Association (LBMA) coordinates activities of its members and other participants in the London bullion market. The LBMA sets and promotes quality standards for gold and silver bullion bars. The minimum acceptable fineness of the Good Delivery Bars is 99.5% for gold bars and 99.9% for silver bars. Bars with a purity less than these may not be referred to as "bullion".
CoinsEdit
Bullion coins are contemporary precious metal coins minted by official agencies for investment purposes. Some bullion coins have been used as currency throughout the 20th century, such as the Maria Theresa thaler and the Krugerrand. However, modern bullion coins generally do not enter common circulation despite having legal tender status and nominal face value. Some modern bullion coins are produced as both business strike and collectible proof and uncirculated versions, such as the American Silver Eagle and American Gold Eagle coins. Private mint strikes[clarification needed] called bullion rounds, bullion wafers, or bullion bars are typically sold at prices slightly above the underlying prevailing precious metals spot price commensurate with their overall precious metal content, whereas collectible versions are sold at a significant premium over their actual precious metal bullion melt value. In some cases, the grade and mintages of privately struck rounds, bars, or wafers can affect their value as a collectible too, so they can too at times be considered collectible numismatic pieces rather than bullion items.
UsesEdit
Base metals such as copper can be refined into bullion but are not widely traded as such.
A range of professional market participants is active in the bullion markets, such as banks, fabricators, refiners, and vault operators or transport companies, as well as brokers. They provide facilities for the refining, melting, assaying, transporting, trading, and vaulting of gold and silver bullion.[3]
Besides the direct bullion market participants, other professional parties such as investment companies and jewelers use bullion in the context of products or services which they produce or offer to customers. For example, shares of the world's largest gold exchange-traded fund, the SPDR Gold Shares, represent a gold spot price mimicking derivative although shareholders in popular gold ETFs such as GLD are almost always unsecured creditors, meaning they own no vaulted gold bullion potentially underlying the exchange-traded fund (ETF). Investors often prefer to own bullion outright over ETFs due to the minimization of counter-party risks inherent.
Private individuals use bullion primarily as an investment or as a long term store of value. Gold bullion and silver bullion are the most important forms of physical precious metals investments. Bullion investments can be considered as insurance against inflation or economic turmoil, their sole direct counterparty risk is theft or government confiscation.
Compared to numismatic coins, bullion bars or bullion coins can typically be purchased and traded at lower price premiums over the fluctuating spot price and their trading bid/ask spreads or buy/sell price differences are closer to the values of the contained precious metals.
bullion, other, uses, disambiguation, this, article, needs, additional, citations, verification, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, schol. For other uses see Bullion disambiguation This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Bullion news newspapers books scholar JSTOR March 2016 Learn how and when to remove this template message Bullion is non ferrous metal that has been refined to a high standard of elemental purity The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver It comes from the Anglo Norman term for a melting house where metal was refined and earlier from French bouillon boiling 1 Although precious metal bullion is no longer used to make coins for general circulation it continues to be held as an investment with a reputation for stability in periods of economic uncertainty To assess the purity of gold bullion the centuries old technique of fire assay is still employed together with modern spectroscopic instrumentation to accurately determine its quality Gold bullion bars and coins Contents 1 As investment 2 London bullion market 3 Coins 4 Uses 5 See also 6 ReferencesAs investment EditThe specifications of bullion are often regulated by market bodies or legislation In the European Union the minimum purity for gold to be referred to as bullion which is treated as investment gold with regard to taxation is 99 5 for gold bullion bars and 90 for bullion coins 2 Investors may choose to purchase physical gold bullion for several reasons to attempt to hedge against currency risks inflation risks geopolitical risks or to add diversification to an investment portfolio citation needed London bullion market EditThe London bullion market is an over the counter market for wholesale trading of gold and silver The London Bullion Market Association LBMA coordinates activities of its members and other participants in the London bullion market The LBMA sets and promotes quality standards for gold and silver bullion bars The minimum acceptable fineness of the Good Delivery Bars is 99 5 for gold bars and 99 9 for silver bars Bars with a purity less than these may not be referred to as bullion Coins EditBullion coins are contemporary precious metal coins minted by official agencies for investment purposes Some bullion coins have been used as currency throughout the 20th century such as the Maria Theresa thaler and the Krugerrand However modern bullion coins generally do not enter common circulation despite having legal tender status and nominal face value Some modern bullion coins are produced as both business strike and collectible proof and uncirculated versions such as the American Silver Eagle and American Gold Eagle coins Private mint strikes clarification needed called bullion rounds bullion wafers or bullion bars are typically sold at prices slightly above the underlying prevailing precious metals spot price commensurate with their overall precious metal content whereas collectible versions are sold at a significant premium over their actual precious metal bullion melt value In some cases the grade and mintages of privately struck rounds bars or wafers can affect their value as a collectible too so they can too at times be considered collectible numismatic pieces rather than bullion items Uses Edit nbsp Base metals such as copper can be refined into bullion but are not widely traded as such A range of professional market participants is active in the bullion markets such as banks fabricators refiners and vault operators or transport companies as well as brokers They provide facilities for the refining melting assaying transporting trading and vaulting of gold and silver bullion 3 Besides the direct bullion market participants other professional parties such as investment companies and jewelers use bullion in the context of products or services which they produce or offer to customers For example shares of the world s largest gold exchange traded fund the SPDR Gold Shares represent a gold spot price mimicking derivative although shareholders in popular gold ETFs such as GLD are almost always unsecured creditors meaning they own no vaulted gold bullion potentially underlying the exchange traded fund ETF Investors often prefer to own bullion outright over ETFs due to the minimization of counter party risks inherent Private individuals use bullion primarily as an investment or as a long term store of value Gold bullion and silver bullion are the most important forms of physical precious metals investments Bullion investments can be considered as insurance against inflation or economic turmoil their sole direct counterparty risk is theft or government confiscation Compared to numismatic coins bullion bars or bullion coins can typically be purchased and traded at lower price premiums over the fluctuating spot price and their trading bid ask spreads or buy sell price differences are closer to the values of the contained precious metals See also EditBullion coin Bullionism Official United States bullion coins Inflation hedge Ingot List of bullion dealers West Point MintReferences Edit Bullion Archived 2017 08 16 at the Wayback Machine Merriam Webster Dictionary Council Directive 98 80 EC Archived 2012 10 28 at the Wayback Machine of 12 October 1998 Special scheme for investment gold A Guide to the London Precious Metals Markets http www lbma org uk assets OTCguide20081117 pdf Archived 2012 06 19 at the Wayback Machine Retrieved from https en wikipedia org w index php title Bullion amp oldid 1174832248, wikipedia, wiki, book, books, library,
