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What is gold bullion?

We sometimes see the term gold bullion being used exclusively for gold bars, but this is in fact incorrect. Gold bullion is both coins and bars, even rounds or tokens could be classed as gold bullion. It is essentially any gold of a high purity in a form suitable for investment purposes.

Bullion Bars

The origin of the term gold bullion is unclear, although there is general agreement over the fact that it comes from the French language. Popular theories include the ideas that the word derives from the French ‘bouillon’ (the act of boiling), bille (an ingot), or even that the word is taken from French King Louis XIII’s Minister of Finance, Claude de Bullion. Gold bullion is defined by its mass and fine gold content which, along with wider economic forces, determines its value.

What is gold bullion worth?

Gold bullion is worth whatever the gold spot price is at any given time, and how much gold it contains. The gold price fluctuates every two minutes according to various economic and geopolitical factors. The value of gold bullion then also changes with it, and does not have fixed worth.

For most gold bullion a dealer (such as BullionByPost) will simply take the current price and multiply it by the amount of gold in the particular item to work out its market value. They will then usually offer a high percentage of this value to cover any costs to testing and processing the item.

What karat is gold bullion?

The karat (or more accurately carat in the UK) of gold bullion will typically be 24 carat. This is pure, 99.99% gold. Quality standards are set by the London Bullion Market Association ( LBMA ), whose Good Delivery Rules are considered the international regulatory standard for gold and silver bullion. The standard LBMA gold bullion bar weighs around 400 troy ounces, and must have a minimum purity of 995 fine gold (99.5%). They must be marked with a serial number, the refiner’s hallmark, its fineness and the year of production.

As mentioned above however, the majority of mints and refiners produce gold at a slightly higher 99.9% or 99.99%, with some competition amongst these various companies over the years to produce ever-higher purity gold bullion.

Some gold bullion coins however are product at 22 karat/carat. This was a common tradition for older coins, as the addition of copper to the mix helped strengthen the coin, preventing bending or scratching when they were in use. Even though these coins are no longer used in everyday life, mints continue to produce them to the same 22 carat purity. This means these gold bullion, such as the Sovereign, Krugerrand, or Eagle, are of a lower purity but are still considered gold bullion.

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Gold Sovereign

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