Investing in Sovereign Bullion

With inflation continuing to rise dramatically in the US, you may find yourself searching for alternate stores of wealth to the weakening dollar. In that search, you may encounter mentions of sovereign bullion, but not any descriptions of what it is, why you should use it, and where to find it.

We’re here to help. The guide below should serve you well as a primer to sovereign bullion. So, let’s get started.

What is sovereign bullion?

Sovereign bullion is any government-issued coin made of gold, silver, platinum, or palladium that is or has been used as legal tender in its country of origin. Sovereign bullion tends to be minted with an exceptionally-low amount of impurities in its composition.

In other words, they are the coins most likely to approach being 100% pure specimens of their primary precious metal. The only reason that they are not completely pure is due to the fact that many precious metals – including gold and silver – tend to be rather soft and malleable in the absence of other harder metals. Thus, the infinitesimal amounts of other metals provide necessary structure to the coins and protect against them turning into blobs.

Why invest in sovereign bullion?

Sovereign bullion often sells at a premium over raw bullion or rounds containing the same amount of precious metal. So, you’re absolutely right to wonder why you’d pay more than you must for the same quantity of gold, silver, platinum, or palladium.

The reason is the reliability of the value of bullion coins over the raw metal. Each bullion coin is minted, certified, and managed by the government of a sovereign state. So long as the country itself is relatively stable, you can be certain that the coins you are receiving contain their advertised amounts of metal and purity. In fact, their composition is usually defined by law, rather than whatever the guy at the foundry decided to throw together.

Furthermore, they very well could serve as legal tender in their countries of origin or countries that have reciprocity with the sovereign nation. Thus, you could potentially invest in precious metal and suffer no liquidity drawbacks, as the coins are just as good as or better than fiat cash.

Finally, if you are buying sovereign bullion minted by your own government, you have a near-perfect weapon to combat inflation against your own wealth. As the government prints more paper money, your steady stores of value remain unchanged in terms of their prized nature, and you’re not losing much of anything in the process.

Where did sovereign bullion get started?

History reliably places the inception of the first sovereign bullion coins in the 6th Century BC. The Kingdom of Lydia, which occupied land now located in western Turkey, produced a minted coin of legal tender by extracting precious metals from its rivers.

The coins were made of an alloy known as electrum, which is a combination of gold and silver. Incidentally, the last king of Lydia, Croesus, is renowned for his wealth to the present day and serves as a comparison point for how rich someone is.

Coins didn’t begin to spread as common forms of exchange, however, until Alexander the Great appeared on the scene. He conquered the Kingdom of Lydia, but elected to adopt their coin system as a means of paying his troops.

The Roman Empire came next and further expanded upon the idea of using precious metal coins as a medium of transfer. Notably, the Romans were the first to establish a reliable requirement of purity for their coins. Unsurprisingly, given the breadth of the Roman Empire at its peak, the minting and usage of coins to trade became an accepted practice in most corners of the world.

Nowadays, sovereign bullion coins are less likely to be accepted as legal tender – especially in the United States. Fiat currency rules the day because, frankly, it is easier for persons in charge to moderate as they see fit. Nonetheless, there are several countries still producing sovereign bullion coins in great numbers, including Australia, Canada, and the US.

What countries are best known for producing sovereign bullion?

Sovereign bullion-producing countries are primarily who you would expect. Only countries of significantly large size, resources, and technological capabilities can mint these instruments with any kind of significant volume and accuracy. So, countries like the US, Canada, South Africa, China, and Austria are usually the purveyors of coins that are most popular with investors and collectors.

It’s probably more instructive to look at the popular coins specific to each of the four precious metals, rather than individual countries. After all, some countries have bullion pieces across all the metals, but others choose to focus on a single medium. Accordingly, here are some of the more popular perennial choices for sovereign bullion, along with their countries of origin:

Gold

Everybody makes gold coins. Here are the ones that most people want:

• The Gold Eagle – United States
• The Maple Leaf – Canada
• The Krugerrand – South Africa
• The Gold Panda – China
• The Nugget or Kangaroo – Australia

Silver

Silver is often seen as a more “practical” precious metal. Some favorites for silver collectors include:

• The Silver Eagle – United States
• The Silver Maple Leaf – Canada
• The Silver Philharmonic – Austria
• The Silver Panda – China

Platinum

Platinum is the better-known of the two rarer precious metals. Finding any sovereign bullion made from platinum is sometimes a challenge, but there are popular coins in this medium nonetheless:

• The Platinum Philharmonic – Austria
• The Platinum Eagle – United States
• The Platinum Maple Leaf – Canada
• The Koala – Australia

Palladium

Palladium is likely the only precious metal you have to Google in order to understand. However, it is a viable store of value, and it has its own roster of favorite sovereign bullion, too:

• The Palladium Ballerina – Russia
• The Palladium Eagle – United States
• The Palladium Panda – China
• The Palladium Maple Leaf – Canada
• The Emu – Australia

Do I have to buy sovereign bullion directly from the government?

Not at all! JM Bullion is more than happy to help you find the sovereign bullion pieces that you want to add to your collection. Start by deciding which metal you want to buy, then proceed accordingly through our various options for that particular store of value.