Types of Bullion Products
Though investors differ on which metal they prefer, there is no denying that gold and silver remain the most popular precious metals to buy and sell. However, if you’ve attempted to purchase gold or silver recently, you may have been overwhelmed or intimidated by the sheer number of choices available to you.
If that’s the case, you’ve come to the right page. The guide below will walk you through the different types of gold and silver you may encounter, along with some suggestions about our favorite bullion products.
Types of Bullion Products
Gold and silver remain the touchstones for many precious metals investors. Both shiny metals have enjoyed a place of prestige in almost every civilization in the last three thousand years. So, let’s talk about the different forms and formats that are available to you as bullion products.
What is bullion?
Bullion is physical gold or silver that you can buy or sell. It comes in one of three formats – coins, bars, and rounds. Each format has its own positives and negatives, but the choice about them is largely a personal one.
In the end, the primary drivers of the value of your gold and silver are their purity and weight. Although coins may be more expensive, the reality is that you should choose the format that speaks to you. The value difference is mostly negligible.
What is a coin?
Coins are pieces of gold or silver that are minted by sovereign governments. They almost always are or have historically been used as legal tender in their respective jurisdictions.
Because coins are issued by government entities, they are quite reliable for their weight and purity. Each coin is certified by their home governments to be exactly their advertised mass of gold or silver.
Coins’ reliability makes them the easiest precious metal format to trade. In addition, some of them are collectors’ items.
One thing to note, however, is the difference between circulation and bullion coins. Although both are legal tender, only circulation coins have been used for transactions in their countries of origin. Bullion coins have not and will not be issued as currency.
What is a bar?
A bar of gold or silver is a shaped ingot or slab of the precious metal. They tend to be formed into soft-edged rectangular objects, although they can take on whatever shape the issuer would like.
The value of bars is entirely based on their weight and purity. Bars are rarely found to be legal tender, but they are favored by many investors due to their ease of storage. They are quite easy to stack into a secure place.
In other words, gold or silver bars are the bulk option for precious metals investors. If you simply want to amass as large of a stack as you can, bars may be the right option for you.
What is a round?
A round is a form of bullion that exists between a coin and a bar. It is a circular disk like a coin, but it is more like a small wafer of gold or silver.
Furthermore, rounds are issued by private mints, rather than sovereign ones. So, like bars, they are valued for their weight and purity, rather than their tradeability.
One of the nice things about rounds, though, is that private mints have quite a bit more discretion about the designs they can stamp into their rounds. You can find rounds with almost anything stamped onto them, from historical figures to brand logos.
What type of bullion should I buy?
The choice about what type of bullion to buy is entirely personal. There isn’t a “best” or “worst” one, per se. It’s more a matter of what you like and don’t like.
However, each type bears its series of advantages and drawbacks. So, to aid your decision, here are the pros and cons of each format.
Coins
| Pros | Cons |
| Extremely reliable | Higher premiums to buy or sell |
| Easy to trade or exchange | No identifying marks to personalize |
| Guaranteed weight and purity | Subject to statutes and laws |
Bars
| Pros | Cons |
| Easy to store and stack | Heavy and unwieldy at times |
| Can allow bulk purchasing of metal | Weight and purity harder to check |
| Can mark with identifying symbols or words | Can be difficult to trade |
Rounds
| Pros | Cons |
| Easy to carry and store | Easy to misplace or to be stolen |
| Cheaper to buy than coins | May be difficult to trade |
| May come with unique markings or stamps | May be difficult to assure purity and weight |
FAQ
What’s the difference between a round and a coin?
Both rounds and coins are circular disks containing precious metals, but only coins are issued by sovereign governments and may be used as legal tender.
Are sovereign mints better than private mints?
It depends on what you want in your investment. Sovereign mints produce more reliable products, but private mints make many fun and interesting pieces that no government would allow.
What is the spot price?
The spot price is the current value of gold or silver in the open market. In general, it’s how much the metal is “worth” at a given time. You can find a live ticker of the gold and silver spot prices at the top of any silver.com page, including this one.
Can I buy bullion at the spot price?
No. No matter where you go to buy bullion, you will have to pay some sort of premium above the spot price. The key is to shop around and find the lowest premiums that you can. Not to brag, but we feel our premiums are both reasonable and quite competitive.
Is there any way to tell that my bullion is legitimate?
Yes. There are several home tests that may give you an idea about the veracity of your bullion. Neither gold or silver are magnetic, so you can try to see if your items attract or not. There are acids that you can purchase which can help you determine where things stand.
However, we would recommend that you confirm your bullion’s legitimacy by visiting a reputable dealer nearby. Ask around and find someone that you can trust, then have him drill into or shave off a piece of your bullion to check. He can tell you if you have a genuine article or a fake.
