What is bullion coin?

Bullion coin are coins that are issued by national mints as a way to trade gold or silver, many countries that has gold surplus often issue their own version of bullion coin to market their gold, examples include the South Africa, United States, Canada, China as well as United Kingdom. The South African are the first to produce bullion coins with the introduction of the Krugerrand, although the circulation of the Krugerrand was not legal in many countries until after the 1990's due to the apartheid policies then. Since then many countries have followed suit, issuing multiple series of beautifully crafted bullion coins and with some of the designs changing every year.

Unlike the coins that we used as a currency, bullion coins are not used in day-to-day trading. People buy bullion coin as a means to counter inflation, as a investment vehicle or simply as a beautiful collector item.

The defining characteristic of a bullion coin is that the value of the bullion coin is determined by its precious metal content, be it gold, silver or platinum, the higher the gold / silver / platinum weight, the more value it commanded. The value that is imprinted on the bullion coin, known as face value, has no relation to the true value of the bullion coin, in most cases the bullion coin often has a actual value far exceed its face value. Say for example, a $1 Canadian Gold Maple Leaf is worth probably £51.00 or more.

Bullion coin can be purchased either direct from the issuing mint (the United States Mint), in a coin collector shop, from the bank or through the internet.

Watch the video below for the difference in collecting gold coins as a bullion or for its numismatic value.