We like this article about gold coins and bullion that explains the difference really well.
Coins vs. Bullion – Differences in Prices and Investing
If you’re new to the scene and would like to start collecting
silver, gold, platinum, or any precious metals, then you’re going to
need to know what the difference between coins and bullion is, and why
the prices are difference between the two. This is the first thing I
looked into when I got into the scene and started investing, I had to
understand what made coins more expensive than bullion, and even what
made some coins more expensive than others. Knowing this made me a more
thorough investor, and gave me the knowledge I needed to make a killing
in the field of commodity trading. It’s simple, and it will all be made
clear and hopefully be helpful in giving you confidence to begin buying.
Let’s begin by looking at coins, what makes a coin more expensive than bullion? Well it’s very basic, and what makes them more expensive than bullion is this – coins are minted, whereas bullion is not, what I mean by minted is that there isn’t a certain number of bullion pumped into circulation. When bullion is created it’s circulated and priced very close to market pricing, and doesn’t have a hefty premium on top of the market price that you would have to pay. Now what is a premium? A premium is just the price you’re paying for a coin that’s above the spot price, say you’re going to buy a one ounce silver coin, the market price for an ounce of silver is 22 dollars, but you pay 32, this is a 10 dollar premium. Generally only a certain amount of coins are circulated (as opposed to bullion), this creates scarcity, and scarcity inflates the price of the coins.
Now what makes some coins more expensive than others? Well, there are a few variables, which come down to the numismatic factor of coin collecting. These variables are the age, rarity, and desirability of a particular coin. For instance, this 1875 Canadian 25 cent coin is worth $1,875.00, but only has 5.81 grams of silver content. Now 5.81 grams of silver is worth about 4 dollars, but when the coin is scarce and desired by coin collectors, then the value skyrockets. They aren’t making these things anymore, and haven’t for a long time, so it’s special, and you pay out of pocket not for the silver, but the rarity.
So this is the difference between coins and bullion, and keep this in mind when you go to spend money on silver, gold, or platinum, whatever it may be you’re interested in collecting. Coins when minted only in certain numbers are going to appreciate in value over time, because as time progresses they become harder to find. Bullion on the other hand will generally appreciate a lot less, because it’s not bound to a certain number of mints. If you’re looking to make money from precious metals during a long-term time scale, than you’ll be a lot better off paying the premiums and relying on the growing scarcity of the coins (though both are great long term investments anyways). Bullion on the other hand you get to avoid paying hefty premiums, but rely more on making money off of the fluctuating market, and the growing scarcity of the raw material, the metal content. It’s as simple as that, and hopefully you now understand all that needs to be known, if I didn’t include something or you have a question, don’t hesitate to leave a comment below.
http://www.growwealthy.net/coins-vs-bullion-differences-in-prices-and-investing/
Let’s begin by looking at coins, what makes a coin more expensive than bullion? Well it’s very basic, and what makes them more expensive than bullion is this – coins are minted, whereas bullion is not, what I mean by minted is that there isn’t a certain number of bullion pumped into circulation. When bullion is created it’s circulated and priced very close to market pricing, and doesn’t have a hefty premium on top of the market price that you would have to pay. Now what is a premium? A premium is just the price you’re paying for a coin that’s above the spot price, say you’re going to buy a one ounce silver coin, the market price for an ounce of silver is 22 dollars, but you pay 32, this is a 10 dollar premium. Generally only a certain amount of coins are circulated (as opposed to bullion), this creates scarcity, and scarcity inflates the price of the coins.
Now what makes some coins more expensive than others? Well, there are a few variables, which come down to the numismatic factor of coin collecting. These variables are the age, rarity, and desirability of a particular coin. For instance, this 1875 Canadian 25 cent coin is worth $1,875.00, but only has 5.81 grams of silver content. Now 5.81 grams of silver is worth about 4 dollars, but when the coin is scarce and desired by coin collectors, then the value skyrockets. They aren’t making these things anymore, and haven’t for a long time, so it’s special, and you pay out of pocket not for the silver, but the rarity.
So this is the difference between coins and bullion, and keep this in mind when you go to spend money on silver, gold, or platinum, whatever it may be you’re interested in collecting. Coins when minted only in certain numbers are going to appreciate in value over time, because as time progresses they become harder to find. Bullion on the other hand will generally appreciate a lot less, because it’s not bound to a certain number of mints. If you’re looking to make money from precious metals during a long-term time scale, than you’ll be a lot better off paying the premiums and relying on the growing scarcity of the coins (though both are great long term investments anyways). Bullion on the other hand you get to avoid paying hefty premiums, but rely more on making money off of the fluctuating market, and the growing scarcity of the raw material, the metal content. It’s as simple as that, and hopefully you now understand all that needs to be known, if I didn’t include something or you have a question, don’t hesitate to leave a comment below.
http://www.growwealthy.net/coins-vs-bullion-differences-in-prices-and-investing/
