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What’s Bullion?

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American Eagle Gold CoinsSo a few weeks ago I wrote about bearer bonds because I’d heard of them in movies and thought they were, besides insanely protected works of art, the thing to steal if you were going to steal anything. Another term I’d heard in the movies a lot was “bullion” and I knew it was related to gold and other precious metals but I wasn’t 100% sure what it meant.

Bullion actually refers to any previous metal whose value is tied to the metal itself and not some fiat money designation assigned by a government. So the bullion coins produced by the United States Mint have no value designation, they are valued at it’s actual metal value. You can buy 1 oz., 1/2 oz., 1/4 oz., and 1/10 oz. of American Eagle Gold and Platinum Bullion coins.

Determining the value of a bullion coin requires three pieces of information – the precious metal, its weight, and the purity. You get the weight of the coin in troy ounces, multiply it by its purity, and then again by the value per troy ounce. American Eagle Gold Coins use 22 karat gold with a 91.67% gold (2% silver, 5.33% copper) and it’s actually quite funny to see the “face value” up against the actual value.

  • 1/10 oz – Face value of $5
  • 1/4 oz – Face value of $10
  • 1/2 oz – Face value of $25
  • 1 oz – Face value of $50

Gold at over $1,200 a troy ounce, its value as bullion is far greater than its face value.

(Photo: sirqitous)

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11 Responses to “What’s Bullion?”

  1. cubiclegeoff says:

    Only worthwhile if you know where to sell it. Any idea where you can sell bullion?

  2. RT says:

    Can you buy the gold bullion coins at face value?

  3. RT says:

    How much is the commission or transaction fee usually?

    Im just thinking a $50 coin has about $1183 in gold in them? but obviously it cant sell for $50…this is where my confusion comes in.

  4. Rick says:

    You buy bullion coins based upon the gold content plus a mark up. For example gold is at $1300 ounce, you can buy a 1 oz. bullion Gold American Eagle for $1372.00 ($1300 for the gold plus $72 for the mark up). I usually buy from a local coin dealer and have found to get the smallest mark up that way.

  5. zapeta says:

    I’d guess you can sell back to the dealer you bought from or to another coin shop. I wish the mint sold the American Eagles directly. I’ve looked in to it and generally a local coin dealer is your best buy for buying these.

  6. otipoby says:

    I went to the US Mint website. Why do the coins have dollar values on them? For example, the Platinum coin (on the reverse side) has $100. The gold coin has “1 oz fine gold – 50 dollars”.

    I thought these coins were specifically minted not to have a minted value, but rather their value is determined by the underlying metal. I expected the “1 oz” notation without a dollar value.

    • Jim says:

      They have “values” but no one follows them, it’s all about the value of the underlying gold. I think the value has to be printed for accounting reasons.

  7. MikeZ says:

    Hypothetically I wonder if the value actually carries some meaning if the gold market drastically collapses. Are you guaranteed by the Gov. the face value of the coin in that case? Perhaps that would explain the value. Not much of a guarantee but could explain it.

  8. Thanks Jim,

    This is a topic that anyone who cares about their personal finances should learn a lot more about.

    -Josiah

  9. Lori says:

    what would a 1/10 or 1/20 of an ounce gold panda coin be worth if bought back in 1986?


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