Whether its bars, rounds, or coins, bullion has been a longstanding staple of the gold and silver industry. Iconic coins such as the South African Gold Krugerrand and the Royal Canadian Silver Leaf are just a few coins that come to mind. Read on to learn more about the history of bullion, the most famous products it possesses and how it was started.
What is Bullion
According to Investopedia, Bullion is gold and silver that is officially recognized as being at least 99.5% and 99.9% pure and is in the form of bars or ingots. Bullion is often kept as a reserve asset by governments and central banks. It is considered legal tender, and is often held as reserves by institutional investors.
When Bullion first began
Beginning in the mid 1960’s, Bretton Woods’ system of stable exchange rates came into fruition with the inflation and increasing pressure on the American dollar. As a result, President Richard Nixon to converted the dollar into gold leading to the first gold bullion, the South African Gold Krugerrand. This coin was issued by the South African Mint and its President, Paul Kruger.
Intergold, known as the International Gold Corporation, was known in the marketplace as being responsible for the distribution of Krugerrand from the South African Chamber of Mines. It established two offices worldwide with the goal of educating the investing public. In the early stages, Krugerrand commanded as much as 80% of the world’s gold bullion coin market.
How is Bullion created
To create bullion, gold first must be discovered by mining companies and removed from the earth, Gold ore, which is a combination of gold and mineralized rock, is then extracted from the ore using extreme heat resulting in pure bullion called “parted bullion” that contains more than one type of metal.
The Coins of Bullion
Bullion features the most iconic gold and silver in the world. Below are the most recognizable.
- Canadian Gold Maple Leaf- Considered legal tender with a face value of 50 Canadian dollars.
- American Gold Eagle- First released by the U.S. Mint in 1986.
- Chinese Gold Panda- Introduced in 1982 by the Chinese Mint.
- Great Britain Gold Britannia- Issued by the Royal mint for gold in 1987 and silver in 1997.
- Silver Freedom bar- Depicts a rendering of the Statue of Freedom.
These coins are the most recognized because of the demand by investors. The pure gold and silver content all these precious metals make them the most valued and iconic bullion in the world. All come in different sizes such as 1/10 ounce, ½ oz, ¼ oz and 1 oz.
Gold is known to cost more than Silver due to it having more stability and being more gradual. Both Gold and silver spot prices change daily.