Are Gold Coins Considered Bullion?

- February 13, 2015 -

We often hear this from potential customers who are relatively new to buying physical gold: “I want to buy gold, but I don’t want to pay the extra fees associated with gold coins…. I just want plain gold bullion.”

Basically, this is just a misunderstanding of what gold bullion is. A common perception is that the rectangular pieces of gold (bars, wafers, ingots) are the most cost effective, and perhaps the only form of gold bullion available. This same line of thinking suggests round pieces of gold (coins) are not really gold bullion. There is a common misconception that gold ‘coins’ are limited in supply, expensive and are collectible (numismatic) items. This is rarely the case.

When one goes to buy gold solely to own gold, what you are looking for is a practical and liquid form of the metal. Gold bullion serves that purpose. Gold bullion is a recognized weight and purity of gold that can be purchased for the current ‘spot’ price of gold, plus a nominal percentage mark up that covers refining, fabricating, shipping and a profit to the seller.

The word ‘bullion’ has a very simple definition: a refined and stamped weight of precious metal. What most of the public thinks of as gold bullion are the large gold ‘bricks’ that may or may not be stored at Fort Knox. Bars of that size are primarily held by governments and central banks. They are known as ‘good delivery’ gold bullion bars, weigh approximately 400 troy ounces, and are accepted for ‘delivery’ at London and other major gold bullion markets. These large bars may be the least expensive way to own bullion but they are also the least practical. It is far more difficult and time-consuming to liquidate large bullion bars than it is to sell the same amount of gold bullion coins in more convenient and frequently traded sizes. Over 95% of our gold bullion sales here at Jack Hunt’s involve either the one ounce United States Gold Eagle or the one ounce Canadian Maple Leaf gold bullion coins. Our experience along with mint issued annual sales figures suggest these two coins are the most recognized and liquid forms of gold bullion in the world. We strongly recommend the ‘Eagle’ or the ‘Maple Leaf’ when the time comes to add gold bullion to your portfolio.