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Are you wondering just what exactly is bullion? No it’s not those soup stock cubes, that’s bouillon.

Bullion refers to precious metals (like gold or silver) valued by weight! They’re usually produced in coins or bars.

We’re going to go over the different types of bullion, and their purpose in the coin world, and amongst coin collectors.

What is a bullion coin?

Bullion coins are precious metals minted into coins, they are generally minted into one ounce coins, or fractions of an ounce, such as a quarter ounce.  The U.S. American Eagle Gold coins are bullion coins, as well as the silver, and platinum coins.

Bullion is a market that is driven entirely by the value of the metal that’s in the coins, instead of by the historical or numismatic value of the coin.  An example of a coin with numismatic value or historic value would be the original minting of the Morgan silver dollar in the late 1800s.  While those coins do contain 90% silver, they’re worth more for their numismatic value.

Why don’t we have gold and silver coins anymore?

Nearly all the coinage back in the day (pre-1930s) was made of precious metals.  Precious metals like gold, and silver.  This was when our currency was still on what is known as the gold-standard.  The gold-standard directly tied the worth of currency to the cost of gold.

In the 1930s, the U.S. began to move away from the gold-standard.  This was mainly due to the Great Depression, and was put into motion in an effort to save the economy, by President Franklin D. Roosevelt.  Naturally, the price of gold began to increase after this.

And finally in the 60s, due to the rising costs of the precious metal, silver was also removed from the U.S. coinage. If you look, you can usually still find silver coins, especially if you have an old coin jar that’s been sitting for many years.  Look for Mercury head dimes, as well as dimes and quarters prior to the year 1965; these were all made with silver!

When Were Bullion Coins First Minted?

After switching to fiat currency (currency that is backed by the government and not intrinsic value), demand for bullion coins increased.  This demand was mainly met in the U.S. by foreign coins, such as the South African Krugerrand which was first minted in the 60s, or the Canadian Maple Leaf, which began in the late 70s. 

Of course the United States wanted to get in on making bullion coins, and in 1986, they launched the American Eagle program.  The American Eagle silver and gold coins were the first coins released in the U.S. as bullion, and backed by the U.S. government.  The U.S. Mint mints bullion coins in gold, silver, and platinum.

What Types of Bullion Coins Are There?

Bullion coins are sold for bullion value (which is the value of the precious metal they contain).  They generally feature a nominal denomination (face value, such as $50 dollars) and are usually sold for bullion value + a premium.  Most collectors of bullion will prefer to collect newer bullion coins rather than vintage coins, as the weights are more precise, and they come in easier to purchase weights, as well as a wide variety of designs, fineness, and even bullion from other countries. 

There is also bullion that is produced by private companies, rather than by government.  These are usually in the form of rounds, or bars.  Generally they are sold in larger weights of precious metals, usually gold or silver, and are not backed by a government institution, and are usually plain.

In addition to the American Silver Eagle program, there are a number of countries who also produce bullion coins.  As mentioned previously, the Canadian Maple Leafs are bullion coins produced in gold,silver, and platinum versions.  They also produce designs each year for their other bullion coins.  The Canadian Mint prides itself on its counterfeit protections, and is one of the leading Mints in developing anti-counterfeiting technology.

Another popular bullion coin is the South African Kruggerand, this coin is largely credited with being the first modern gold bullion coin minted.  In the 1980s, they were banned in the U.S.  Here’s an excerpt from the Baltimore Sun from 1994:

“The U.S. government enacted a ban on the import of Krugerrands as part of sanctions against the former government in South Africa for its practice of apartheid, or racial separation. Although Krugerrands sold in the secondary market between collectors and dealers, no new coins were imported from 1985 until the ban was lifted in 1991.”

After the ban was lifted, Kruggerands started trading again, and are still popular today.

The New Zealand Mint is another great Mint producing bullion coins, if you’re a bit on the geeky side, but still want to collect coins, they have officially licensed many popular characters from shows (and movies) such as Star Wars, Harry Potter, Batman, and many more!

No matter which bullion or Mint you choose, each one would be a great addition to any coin collectors collection.