Bullion can be a great way to directly invest in Gold

Gold bullion is traded all over the world and is seen as one of the most conservative investments there is, short of treasury bonds and TIPS. Unlike T-notes and the like, bullion offers a significantly greater ROI than a TIP, CD, or other more conservative investment. Gold can be a great way to not only protect your wealth but grow it in times when the currency is weakening.

Generally, the word ‘bullion’ is used to refer to a number of form factors of precious metals. Gold bars or silver bars are usually what is meant when someone refers to ‘bullion’. The word itself comes an old French word ‘bouillon’ which means ‘boiling’ which was the term used at the time to describe a precious metal mint or a place to melt down precious metals.

Nowadays, bullion most often refers to bulk-sold precious metals which are traded on commodity markets. The value of the bullion determined by the market itself in addition to it also being determined by its content, which is comprised of both its mass and purity.

There is a wide range of professional participants active in the commodity markets for trading bullion: vault operators, fabricators, refiners and banks and brokers. These participants provide the facilities for trading, vaulting, assaying, melting and refining both Gold and silver bullion.

In addition to the direct participants in the bullion markets, there are other groups like investment houses and even jewelers that use the bullion within their products and services which they offer. For a real-world example, purchasing shares of the largest Gold ETF in the world, SPDR Gold Shares, represents a direct ownership in bullion.

Individuals themselves can be involved in bullion and use it as an investment vehicle or a means by which to retain their wealth and hedge against inflation. Bullion is the most important physical precious metal investment there is. Investment in the bullion market is generally considered an effectual insurance policy against economic downturns which does not entail third-party risk.

Compared to conventional currency, bullion bars and bullion coins can be both purchased and traded at a lower cost and their market prices are much closer to the contained value of the actual precious metal.

The specification for bullion is generally regulated by legislation and market bodies. In the EU, the minimum purity for investment-grade bullion is .995 for bars and 90% for coins.

To give an example, the LBMA is an association which both sets and promotes standards of quality for Gold and silver bars. The minimum standard for their Good Delivery bars is .995 for Gold and .999 for silver.

The overall status for a precious metal can be determined by its high demand and its market value. Bullion may be finally minted into coins or cast into ingots, the primary attribute of bullion is that it is valued on the basis of its content as opposed to its face value–as would be in the case of conventional currency.

Gold Bullion Documentary

Author: David Kennedy Google+