Government vs. Private Bullion

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Collectors and investors who want to buy bullion may encounter government and private bullion bars for sale. Government bullion and private bullion each have their own advantages and disadvantages. Buyers often choose bullion options based on which features matter most to them. Learning more about the differences and similarities between government bullion and private bullion could help buyers better understand their options.

What is Government Bullion?

Government bullion includes precious metal bars and coins that have been minted by a country’s national mint. In many cases, the bullion is minted into coins that mark special occasions, historically significant figures or events and national landmarks or wildlife.

Many investors and collectors prefer government bullion, because its purity and weight are ensured by a country’s government. This offers protection for people who want to buy bullion coins as investments. Protection from government authorities may give some buyers peace of mind that they might not get from private bullion.

Since government bullion is often made as collectible coins and bars and typically has status of legal tender, buyers can expect to pay a premium for these items. One should remember that the bullion is more than just a lump of metal. Government bullion may include artwork stamped into coins or serial numbers showing that it belongs to a limited group of printed or poured bullion. The artwork and serial numbers add to government bullion’s collectability, which subsequently adds to its price.

A higher price makes it difficult for some beginning collectors to purchase government bullion. Buyers who want the absolute lowest price on gold and silver probably won’t like government bullion. In those cases, buyers could consider private bullion.

Some buyers don’t mind the higher cost of government bullion because they can potentially earn more money selling collectibles. Even if the price of precious metals were to fall suddenly, collectible bullion would still have value for people who enjoy commemorative coins. It’s also possible for the collector’s premium to grow, which means owners could potentially make more money when they decide to sell their collectible government bullion.

Some popular collectible bullion coins include those in the Royal Canadian Mint Wildlife Series, the Perth Mint Lunar Series, People’s Republic of China’s Panda coins, South African Krugerrands, and U.S. Eagle coins.

Government Bullion vs. Numismatic Coins

Collectors shouldn’t assume that all government-minted coins contain gold or silver bullion. Some valuable coins are solely numismatic, which means they are a type of currency. Numismatic coins are often worth more than the value of their metal. Their value varies depending on rarity and many other factors. Buyers often aren’t interested in the coin’s metal: they’re interested in how rare the coins are. It’s important for buyers to understand that not all valuable coins minted under government authority contain precious metals.

What is Private Bullion?

Private bullion does not come with government-backed guarantees. Some buyers view this as a positive feature while others prefer the stability and security of government bullion.

With private bullion, buyers pay for the value of the gold or silver. Since the bullion doesn’t come as a collectible series, buyers don’t spend extra money on the collector’s premium. Ideally, that means buyers can use their money to get more bullion. Investors who believe precious metals have innate value may want to choose private bullion so they can avoid extra costs.

Private bullion often costs less than government bullion, but buyers don’t always get security and peace of mind when buying private bullion that hasn’t been backed by a major government. Since the bullion doesn’t come with many guarantees, buyers don’t always know the purity and exact weight of private bullion. However, this doesn’t mean that buyers won’t get their money’s worth. It just means that buyers need to make smart, informed choices.

Buying Private Bullion from a Reputable Dealer

Buyers interested in private bullion should take precautions. They can get more bullion for their money, but they need to make sure they are getting high-quality metal. It makes sense to purchase private bullion from a trustworthy exchange. Purchasing it on the open market from an unknown seller presents too many risks, especially for people who save their cash carefully, because they want to invest in precious metals. Always buy private bullion from a reputable dealer such as JM Bullion with a history of strong customer service.

Government and private bullion offer unique characteristics for people interested in collecting precious metals. Some buyers only purchase government bullion, because they like the security and hope the collector’s premium will earn them more money when they decide to sell the bullion. Other buyers want private bullion with value solely based on purity and weight. Those who aren’t interested in collectability can explore private bullion options to purchase precious metals at lower prices.

All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.