Precious Metals

Bullion vs. Numismatic Coins

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When browsing precious metals dealers’ offers, you’ve undoubtedly come upon the terms bullion coins and numismatic coins and are probably wondering if there is a difference between these types. Yes, there are key differences between these types of coins, and these come at different value points for different reasons.

Bullion vs. Numismatic Coins

Bullion coins and numismatic coins overlap in some instances, like their value depending on the current precious metals prices.

To put an end to your confusion, here we’ll outline the main differences between bullion and numismatic coins, discuss the similarities, and explain how these relate to investors.

We hope to cover all your questions, but we stand at your disposal if you have something else to ask about bullion coins, numismatic coins, or investing in precious metals.

Bullion: Definition

The word bullion is used to describe a precious metal whose value is only based on its weight and fineness, and as such, it is subject to regular market price fluctuations. Bullion can come in various shapes and sizes, but it is always in the pure form of precious metal. When we talk about the purity of the precious metal, we mean its certified fineness in composition.

The fineness depends on the precious metal, but it is always expressed as millesimal fineness or parts per thousand. In the case of silver, a .999 fineness means the silver bullion is 99.99% pure silver; the same standard goes for other precious metals like gold, platinum, palladium, rhodium, and ruthenium. Still, when it comes to gold, you can hear the term 24-karat gold, which also means 99.99% purity, but this is mainly used when discussing jewelry.

Yes, the appealing-looking gold bricks we’ve all seen in movies are bullion gold bars, but at the same time, bullion is used to describe various coins. Now, to the good part: the difference between a bullion coin and numismatic coins!

Bullion Coin: Definition

A bullion coin is struck from a blank or planchet from pure precious metal. The coin-striking process adds a design to the coin, which usually has the weight, fineness, date, and place where it is minted. Some of the most famous bullion coins come from the US Mint, the Royal Canadian Mint, The Austrian Mint, the UK Royal Mint, and the South African Mint.

We need to note that most bullion coins have 99.99% pure composition, but some, like the American Gold Eagle, have 91.67% gold. This coin still contains 1 troy ounce of gold. The composition variations are unimportant if the gold content, weight, and manufacturer are known.

A sovereign nation issues bullion coins, and while these can be used as legal tender for purchases, they are mainly used for investment purposes. This is because the legal tender value of precious metal coins is much smaller than the worth of the precious metal in the actual coin.

Here we need to mention the bullion rounds, which can have the same metal content as bullion coins but are not used as legal tender coins.

Numismatic Coins: Definition

The term numismatic comes from the Latin word numisma, meaning coin, and is used to describe the study and collection of coins, paper money, and medals. Numismatists study money, with separate people focusing on different areas like coins, paper currency, or something else, and here we’ll only discuss coin-related numismatics.

When it comes to numismatic coins, these are coins that are no longer in production and, thus, are in limited supply; in the case of US coins, the rule is for these to have been minted before 1933. Such coins were issued as bullion coins for currency, but they acquired their numismatic status later.

One example known to Americans is the Indian Head coin, issued in $2.5 and $5 face values. While these were not very popular when they were issued in 1908, they became collector’s items due to their appealing design.

Many coin collectors also collect present-day coins, especially coins minted for special occasions or in limited editions. Another appealing coin type for collectors and numismatists is the error-stamped coins.

Semi-Numismatic Coins: Definition

Generally, the term numismatic coins is used to refer to coins that are no longer in production. The coins in production in limited batches or are part of the First Strikes series are referred to as semi-numismatic coins.

The semi-numismatic coins come in protective casings without going into circulation and are left in mint condition. The proof coins have highly polished mirror backgrounds, have a frosted finish, and are much more visually appealing than mass-produced bullion coins.

All of the uncirculated collectible coins have the same precious metal content as bullion coins and have both an investment and numismatic appeal.

The semi-numismatic coins add value to an investment portfolio, as they come in the same precious metal content as their bullion coin counterparts. However, these also have a collectible appeal.

Bullion vs. Numismatic Coin Value

Regarding value, most numismatic coins usually have a lower value than bullion coins, but some greatly surpass the bullion coins with the same precious metal content. The thing that gives value to bullion coins is their precious metal content and weight; as most of these are in constant production, rarity is not an issue.

Numismatic coins are valued for their precious metal content, rarity, historical context, importance, condition, and demand. It is often when valuable numismatic coins are priced far more than their worth in gold.

One of the most famous numismatic coins is the US $20 double eagle gold coin that President Theodore Roosevelt imagined and sculptor Augustus Saint-Gaudens designed.

To Wrap Up: Invest in Bullion or Numismatic Coins?

When it comes to investing in precious metals, coins have the highest appeal because of their design, precious metal content, resale ability, and of course, the design.

However, the decision to invest in bullion or numismatic coins depends solely on you, as it varies on your goals. Bullion coins could appeal more to you if you want to invest and diversify your IRA fund in precious metals.

Still, if you enjoy numismatics and wish to leave a substantial inheritance to your offspring, then perhaps you should look into numismatic coins. In any case, please follow our blog for more up-to-date info on the exciting world of precious metals.

If you’re interested in investing in bullion, then you might want to read this American Bullion Inc. review. You’ll get all the information about the company that you need to know.

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MF Metal Team

At MF Metal, we research and analyze retirement investment options for individuals who want to control and protect their financial future. We strongly focus on precious metals and gold IRA accounts.