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What is Gold Bullion?
By Victor Rosario MONEY RESEARCH COLLECTIVE
Investing in gold can be done in a variety of ways, including gold-focused Exchange Traded Funds (ETFs), stocks of gold mining companies, and physical gold itself. A common method to invest in physical gold is by purchasing gold bullion. But, what is gold bullion, and what’s the process of investing in this precious metal? Read on to find out.
What is gold bullion?
Gold bullion describes any gold product that is at least 99.5% pure. This includes gold bars, coins, rounds and ingots. Bullion garners its worth from the amount, quality and purity of the gold inside them and the spot price of gold rather than any artificial worth given to it by a government. This differentiates it from gold coins issued by the government with a specific worth tied to it.
The 99.5% purity benchmark is crucial. This high level of purity ensures that the product is considered investment-grade gold, making it readily tradable and acceptable in global markets
Different types of gold bullion
When thinking about which gold product to buy, keep in mind that bullion’s worth is tied to its weight in gold. This means that gold bullion in general that weighs the same and has the same gold purity standard should be worth the same, no matter if it is a gold bar, gold coin or other gold bullion product.
Gold bars
Gold bars are probably the product you’re imagining in your head when thinking of gold bullion. Gold bars are made by melting down pure gold and pouring it into cast-iron molds, which are then usually dropped into a vat of water for cooling. This cast-iron mold creates the rectangular shape with rounded edges that’s commonly seen in gold bars.
Gold bullion bars are available in various sizes, from as small as 1 gram to as large as 400 ounces. Smaller sizes, like 1 oz gold bars, 50 gram gold bars, and 100 gram gold bars, cater to retail investors, while larger sizes, like 1 kilogram gold bars or 400 ounce bars are more suitable for institutional investors, such as central banks.
Gold coins
Gold bullion coins come in different varieties and are produced by official government mints. The governments that produce the most gold coins as of 2025 are China, Australia and Russia, with China producing more than double of the U.S’ output. Gold coins are typically available in one ounce, half ounce, quarter ounce and tenth ounce varieties and have varying degrees of purity.
Most gold bullion coins are considered legal tender and are assigned a nominal face value by the issuing government. Legal tender status provides an additional layer of confidence for investors as it guarantees a coin’s weight, purity, and authenticity.
Gold rounds
A gold round is essentially a gold coin that is not produced by a government mint. These tend to be closer to a gold bar in their purity and differ from gold bars only by their shape and size. Unlike gold coins, these do not have a value set to them by being legal tender but are only worth their weight in gold.
Gold rounds are an attractive option for both gold investors and collectors, sharing many characteristics with gold coins but differing in key aspects. They are coin-shaped precious metal pieces, often made of gold, that do not have a face value, date stamp, or legal tender status.
While rounds may mimic the appearance of coins, they cannot have the exact dimensions and weight of any coin produced worldwide to prevent counterfeiting. The designs on gold rounds can range from simple mint markings emphasizing the gold’s purity to intricate designs appealing to collectors who desire well-known coin aesthetics without the higher premiums associated with collectible gold coin programs.
Gold rounds are generally available at lower premiums over the spot price of gold compared to gold coins, making them a cost-effective way to invest in physical gold. They offer an efficient way to buy gold, similar to gold bars, with the primary distinction being their shape.
How to buy gold bullion
When looking to buy gold bullion, it’s important to keep a few things in mind, including the reputation of the dealer, the purity of the product and the existing gold spot price. You can buy gold in-person or from an online retailer, with online becoming an increasingly popular option.
Verify the spot price of gold
The spot price of gold is something that can fluctuate over time and is usually inversely related with the position of the U.S. dollar, making a good investment to hedge against inflation. Make sure you are aware of the spot price of gold before deciding if this is the right time to invest in it. As stated before, gold products are usually priced by their weight relative to its purity, regardless of the specific type of gold bullion it is.
Find a reputable dealer
Gold dealers will rarely sell you gold at a price that is far removed from the current spot price. That being said, if it sounds like the deal is too good to be true, it probably is. Make sure to buy physical gold from a reputable dealer with years of experience dealing in the product you’re interested in buying.
Compare the dealer’s fees to the market
When looking for reputable dealers, compare their fees between them. Vendors usually charge fees for shipping, manufacturing and processing, which can drive up the price of an already costly endeavor. Make sure to compare options from multiple reputable dealers before deciding which one is right for you and your budget.
Gold bullion summed up
Gold bullion is any gold product that is at least 99.5% pure gold, including bars, coins and rounds. Buying physical gold bullion can serve as a good investment and a hedge against inflation, provided you pick a reputable dealer with relatively low fees. Always be aware of gold’s current spot price to make sure you are making the best possible investment decision for your portfolio.