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Types of Gold Bullion
Types of Gold Bullion
Gold bullion is a recognized fineness and weight of gold, which can be bought at current gold prices. This can either be in the form of coins, ingots/bars or rounds. Gold bullion is valued by its purity and mass rather than face value.
Bullion Gold Bars
Purchase of bullion gold bars is one of the most popular ways of investing in gold. These can be purchased either from bullion dealers or major banks in countries like Switzerland, Canada, Austria, Liechtenstein and Argentina. Gold bars are of two types, cast and minted. The minted bars are produced by hand cutting a flat piece of gold into required dimensions, while molten gold is poured into mold to make cast gold bars. Presses are used to apply markings on both the types of bars.
Gold is measured in troy ounces. While talking about gold, ‘ounce’ often refers to troy ounce. Gold bars are available in a number of sizes like 1oz, 10oz, 10 g, 100g, 1 Tola, 1 Tael and 1 kg (32ozt). Internationally bullion dealers and central banks use Good Delivery bar, a standard gold bar with nominal weight of 400oz. The precise gold content in such bars may vary from 430oz to 350oz. These bars need to have a minimum purity of 99.5%. Bars are preferred over bullion gold coins or rounds as they have lower price premium, but the risk of forgery is higher in case of large bars.
Bullion Gold Coins
Gold bullion coins are commonly available in sizes like 1/20 ounce, 1/10 ounce, 1/4 ounce, 1/2 ounce and 1 ounce. The price of gold coins is based on their fine weight and to a small extent on supply-demand premium. Some of the most popular gold coins include the Krugerrand (a South African gold coin), American Gold Eagle, Australian Gold Nugget, Vienna Philharmonic coins (the Euro gold commemorative coins), Canadian Gold Maple Leaf and Chinese Gold Panda.
The Krugerrand was first minted in 1967. It is available in four sizes: one-tenth ounce, quarter ounce, half ounce and one ounce. These are 91.67% (22 carat) pure coins and the rest 8.33% is formed by copper. The American Gold Eagle Coins were first released in 1986 by the United State Mint. They are also available in the same four sizes and are 91.67% pure. In this case, the remaining 8.33% weight consists of 5.33% copper and 3% silver.
The Perth Mint offers Australian Gold Nuggets in sizes like one-twentieth ounce, one-tenth ounce, quarter ounce, half ounce, one ounce, two ounce, ten ounce and one kilogram. These coins are 99.99% pure (24 carat). Unlike most legal tender bullion gold coins, the Australian Gold Nuggets change in design every year. This increases their numismatic value. The Vienna Philharmonic coins are valued as both bullion coins and collectable coin. They have frequently been the annual best selling gold coin across the world. They are 24 carat gold coins and are available in weights ranging from 3.121g to 31.103 kg.
Royal Canadian Mint introduced the Canadian Gold Maple Leaf for the first time in 1979, when Krugerrand was the only bullion coin available. These are 24 carat gold (.9999 fine) coins available in one-twentieth ounce, one-tenth ounce, quarter ounce, half ounce and one ounce denomination. China introduced the panda gold coins in 1982. They are also available in same dimensions as the Canadian Gold maple Leaf and are 99.9% pure.
Other than bars and coins, you can also buy gold bullions in the form of rounds. Gold rounds are cheaper than coins, but costlier than bars. Regardless of the type, gold bullion remains one of the most popular forms of investment today.
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