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Why Is Gold Called Bullion?

Why Is Gold Called Bullion?

We often say gold bullion, but do we truly understand what it means? Or why it's called bullion? Keep reading because we’ll answer those questions, including where to buy gold bullion.

What Is Gold Bullion?

Gold bullion refers to rounds, bars, coins, and ingots of highly refined uncoined gold. How refined? In its purest form, it is between 99.5%-99.99% of pure gold. 

How pure the gold is will also determine its value. Weight is another factor that contributes to the value of  gold bullion – the more weight pure gold bullion has, the more value it has. Typically, gold bullion weighs between 1 troy ounce to 1 kilogram; however, it can weigh up to a whopping 400 troy ounces (over 27 pounds) in some instances.

These factors are important if you plan to invest in gold bullion.  According to this Forbes article, per the IRS, with precious metal IRAs, “Gold must be 99.5% pure.” Examples of allowable products include Canadian gold Maple Leaf coins, bullion Australian gold Koala coins, and PAMP Suisse gold bars. The IRS does make an exception for American Eagle coins, which can be used in precious metals IRAs, despite them being 91.67% pure gold versus the typical 99.5% pure that is accepted. 

Why Is It Called Bullion?

The bullion definition refers to the amount of metal, such as the amount of gold, in a bar or ingot. Merriam-Webster notes the first known use of the term bullion was around the 14th century. The site also reveals that bullion is a mix of Middle English and Anglo-French words. For example, Merriam-Webster indicates that bullion is a combination of bille, referring to an ingot or piece of money, buillun for a cauldron, and boillon, the froth on boiling liquid.

How Gold Bullion Is Made

Molten Gold Being Poured into a Cast Molten Gold Being Poured into a Cast

To make gold bullion, gold must first be mined from the earth or gathered from scrap jewelry sold by pawn shops or other sellers. Once collected, it then needs to be refined. 

Gold ore from a mine is usually trapped inside rocks, so a milling machine crushes them into coarse gravel. Next, the gravel goes into a rotating metal drum with steel balls that crush it even more until it's turned into a fine powder or slurry. This process makes it easier to extract the gold from its original source.

The last phase of making gold bullion requires the gold to be extracted or separated from the powder. Refineries will either use chemicals such as a strong acid, heating, or both to separate and remove impurities. The acid then leaches or dissolves the gold away from the powder. Next, the gold goes through extreme heating to remove any remaining impurities. Once completed, it will nearly be pure and ready to pour into bar or ingot molds.

What Is the Difference Between Gold Bars and Bullion?

Bullion is a general term for all pure or highly refined precious metals. Gold bars are generally rectangular with a specific amount of gold metal. They can be cast or poured, and some sovereign mints even issue bars that are legal tender.  So while gold bars are considered to be bullion, bullion also comes in other forms including rounds and legal tender coins.

Where Can You Buy Gold Bullion?

If you want to know where to buy gold bullion or how, there are a couple of options. You can go in person to a local dealer and buy gold bullion there. Or, if you’re looking for convenience, you can go to an online seller. Both function similarly. However, not all dealers are the same. Some will have different pricing. Even the availability and quality of what they sell may vary. You’ll need to consider these factors before choosing to buy gold bullion. 

You’ll also need to make sure you’re buying from a trusted seller. That’s why you should shop with GovMint.com. We’re an accredited business that’s been in operation for 37 years. We sell gold bullion and other collectible items for a fair price. Visit our site to discover what we have to offer.

© 2024 Copyright GovMint.com. All Rights Reserved. GovMint.com does not sell coins and numismatics as investments, but rather as collectibles. Please review GovMint’s Terms and Conditions, Terms of Use and Privacy Policy before using this website and prior to purchasing from GovMint.com. 

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