Only 1% to 3% of the US population has invested in precious metals.
If you’re looking for a steadier investment that maintains its value through a physical backer, you need to consider bullion.
What is bullion? Use this useful guide to find and learn all the benefits when you buy gold bullion or buy silver bullion.
What Is Bullion?
Bullion is a precious metal in its purest form. For example, you can have silver bullion, gold bullion, or even platinum bullion. It’s valued strictly for its metal content and not a government stamp (like currency) or artistic aesthetics (like jewelry).
Unlike typical currency or other investments, bullion tends to be safer from the effects of inflation and market uncertainty.
Examples of Bullion
In order to be considered bullion, the metal must be refined to a pure or nearly pure status. Most often, bullion comes in the form of coins or bars of gold, silver, platinum, and palladium.
Even in coin form (which you can purchase directly from mints and manufacturers), bullion is not meant to be currency. it is an investment in something that will not lose value in and of itself. Genuine bullion is often stamped with its purity and size.
You may purchase bullion bars or coins (more common) through online precious metal dealers, auctions, and brick-and-mortar stores. You may also find a bullion investment through exchange-traded funds backed by gold and silver or through futures contracts.
How Does a Bullion Investment Work?
Precious metals are limited in supply. They either have to be mined from the earth or synthetically created in an expensive process. Because there is a limited supply of precious metals, ownership of it is considered a rare privilege and a sign of wealth.
Bullion also has a tendency to appreciate instead of depreciating in value, so many people add bullion to their investment portfolio in order to include something more reliable than some other rewarding yet risky investments.
It’s a good idea to include bullion in your portfolio if you have concerns about your other investments depreciating overtime or being at the mercy of inflation and geopolitical risks.
Even the U.S. government (and many other world governments) recognize the value of bullion and keep a stock of it in their own federal reserves. It’s one of the most reliable investments for individuals or governments to make.
Alternatives to Physical Bullion
Not everyone wants the stress of personally protecting physical gold bars and coins in their home or finding a safety deposit box for bullion. Instead, people opt for not physical versions of investing in bullion.
Similar to buying stocks, you can buy gold bullion by buying a share of gold EFTs. These are stock exchanges that use gold or silver bullion as their main backing asset. The gold and silver will never personally pass into your hands, but you’ll be able to buy and trade stock in it that will be much more reliable than some of your other stock options.
The Simple Guide to Bullion
Hopefully, this beginner’s guide to bullion has answered your question, “What is bullion?” Consider buying into one of the steadiest and most reliable forms of investment!
Want more financial advice and explanations? Check out our Markets section for more!
Also published on Medium.
