What is Bullion?

We are often asked “What is Bullion?”

Bullion is a term used to describe precious metals that have been refined to a high standard of purity – at least 99.5% and 99.9% pure for silver and gold.

The most common types are gold and silver, but other pure precious metal bars/ingots and coins such as platinum and palladium can also be considered bullion.

Bullion has been used as a form of currency for centuries. In fact, gold and silver were the primary forms of currency for most of human history. However, in the 20th century, fiat currencies (currencies that are not backed by a physical commodity) became the norm. Despite this, bullion remains a popular investment asset.

Origin of the Word

The word bullion comes from the French word “bouillon,” which means “boiling.” The term referred to the process of melting down metal to purify it.

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Trading in Bullion

It can be traded in various ways, with the most common form being coins. The coins are minted by governments or private mints and are guaranteed to be of a specific purity and weight. They are often sold at a premium over the spot price of the metal. Bars are another option for trading bullion.

Investing in Bullion

If you are considering an investment, there are a few things you should bear in mind. First, you need to decide what type of bullion you want to buy. Gold and silver are the most common types, but other precious metals such as platinum and palladium have grown in popularity. Second, you need to decide how you want to store it. It can be?stored?at home or in a secure storage facility. Finally, you need to decide how much you want to buy. The amount you buy will depend on your investment goals and risk tolerance.

If you are new to investing in precious metals, it is a good idea to do some research and talk to someone with more knowledge in the field. It is important to understand the risks and potential rewards of investing in bullion and sometimes to get help with developing an investment plan, balancing your assets and working out how to best meet your longer term needs.

We are not financial advisors but we are happy to talk with or meet customers to share our experience and knowledge.

Benefits and Risks

Here are some of the benefits of investing in bullion:

• Hedging against inflation.?Bullion is a good hedge against inflation. This is because the value tends to rise when the value of fiat currencies falls.
• Store of value.?Bullion is a good store of value. This is because there is a limited supply, it is durable, easy to transport, and difficult to counterfeit.
• Diversification.?Adding bullion to your investment portfolio can help you diversify your risk. This is because the price tends to go the opposite way to the price of stocks or bonds.
• Tax Exemptions.?In the UK you do not pay VAT on gold. UK legal tender coins such as the Britannia and Sovereign are exempt from capital gains tax.

Here are some of the risks of investing in bullion:

• High volatility.?The price can be volatile, meaning that it can fluctuate wildly in price. This can make it a risky investment for some investors.
• Storage costs.?You can store bullion at home or pay to have it stored in a secure location. We can arrange this for you.
• Security risks.?Bullion is a valuable asset, and it is susceptible to theft. If you store it at home, you need to take steps to protect it from theft and make sure it is fully insured. See our article about storage options?here.

Authenticity and Quality

It is vital to consider the authenticity and quality of the bullion when planning an investment. It is essential to purchase from reputable dealers, and to ensure that it is of the stated weight and fineness. Almost all gold and silver bullion will bear a mintmark – any bullion lacking this should be avoided.

Here To Help

If you’d like to speak to a member of our award-winning customer service team for some precious metal investment guidance, we’d be delighted to hear from you. Call us on 01769 618 618, or you can email us at [email protected], and we’ll get back to you asap.