If you’re new to precious metals, you’re probably new to the language of precious metals, too. Here, we walk you through the basics of bullion coins—which are a great starting point if you’re building your precious metals portfolio from the ground up. You’ll learn what these coins are, what differentiates them from proof coins, why they’re beneficial to own, and what the most popular bullion coins are.
What Are Bullion Coins?
A bullion coin is evaluated by the weight and purity of a particular precious metal, such as gold or silver. The U.S. government guarantees the weight and purity of bullion coins manufactured by the U.S. Mint. Unlike collectible coins, bullion coins are typically viewed as a way to hold precious metals like gold and silver as assets.
The U.S. Mint does not sell bullion coins directly to the public. Instead, the Mint distributes these coins through a network of official distributors known as authorized purchasers. Pricing for bullion coins typically depends on the coin metal’s market price, plus a small premium to cover minting, distribution, and marketing.
U.S. bullion coins, introduced in 1986, are produced mainly at the Mint’s facility in West Point, New York. Bullion coins also are made by government mints in Australia, Austria, Canada, China, and South Africa.
Are Bullion Coins Different from Proof Coins?
Yes. A bullion coin and its proof coin counterpart contain the same amount of precious metal. However, proof coins are often noted for their design, condition, and uniqueness in addition to their precious metal content. People often buy proof coins alongside bullion coins to take advantage of these additional benefits.
The superior finish of proof coins is partly because “proof blanks are specially treated, hand-polished, and cleaned to ensure high-quality strikes,” the U.S. Mint explains. “The blanks are then fed into presses fitted with specially polished dies and struck at least twice. The coins are then carefully packaged to showcase and preserve their exceptional finish.”
Together, bullion coins and proof coins can add balance and diversification to a precious metals portfolio.
Why Should You Own Bullion Coins?
Owning bullion coins offers several advantages:
- They’re easily recognizable.
- They’re easy to trade.
- They typically sell at a higher premium than bars made of the same precious metal.
- They can serve as a hedge against inflation.
- They hold intrinsic value based on metal content.
- They can help diversify your portfolio.
While it’s almost always a good time to buy precious metals, some moments are better for buying bullion coins. When you’re ready to buy, watch for:
- Moments of market stress: Bullion coins are highly liquid assets and can provide a practical means of wealth protection during periods of economic upheaval.
- When central banks are buying gold: Gold has long been a reserve asset for the world’s largest banks. When banks buy more gold, they may be trying to increase their diversification away from paper-based assets, such as the U.S. dollar, and you may also want to do the same. Gold has been historically negatively correlated with the U.S. dollar.
- When the U.S. dollar shows signs of weakness: Similarly, “when the dollar is weak, gold is cheaper to purchase in other currencies,” writes Philip N. Diehl, President of U.S. Money Reserve. A slumping dollar could signal an uptick in gold prices—and therefore gold bullion coins.
What Are the Most Popular Silver Bullion Coins?
Identifying the most popular silver bullion coins is difficult. Many silver bullion coins are recognized around the world so you don’t have to pick just one! Nonetheless, there’s no denying that these are some of the most popular silver bullion coins:
- Silver American Eagle
- Silver Canadian Maple Leaf
- Silver Mexican Libertad
- Morgan and Peace Silver Dollars
What Are the Most Popular Gold Bullion Coins?
One coin soars to the top when you mention the most popular gold bullion coins: the Gold American Eagle, designed by American sculptor Augustus Saint-Gaudens. It’s one of the best-known and most-loved among all coins in the world.
But the Gold American Eagle doesn’t fly alone in the flock of popular gold bullion coins. Others include:
- Gold American Buffalo
- Gold Canadian Maple Leaf
- Gold South African Krugerrand
- Gold Austrian Philharmonic
Ready to shop for bullion coins? Buy government-issued and government-guaranteed bullion coins online or over the phone with U.S. Money Reserve.