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Bullion coin

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A bullion coin is a special type of money made from precious metal. The term bullion refers to metal that has been highly refined. These coins are not usually used for daily shopping or small purchases. Instead, people use them as a store of value or an investment. Some people also keep them as collectibles. These collectors look for numismatic value. This means the coin is worth more than just the metal inside it.

Every bullion coin is defined by its mass and its fineness. Mass is another word for the weight of the coin. Fineness describes the purity of the precious metal. The purity levels can vary quite a bit. Some coins have a fineness of 91.9%, which is 22 karat. Other coins are much purer, reaching 99.99%. This highest level of purity is called 24 karat.

It is important to know the difference between a bullion coin and a round. Many people confuse the two, but they are legally different. Bullion coins are minted by official government mints. Because they are official, they have a legal tender face value. This means the government recognizes them as money. In the United States, the law is very specific about this. If a piece of metal is not stamped by a government authority, it is not a coin. It must be advertised as a "round" instead.

Different countries have different rules for how these coins are taxed. In the United Kingdom, some coins are called investment coins. These specific coins are exempt from value-added tax, which is known as VAT. To qualify as an investment coin in the UK, a coin must meet several requirements. First, it must have been minted after the year 1800. Second, it must be at least 900 thousandths fine. Third, it must be legal tender in its country of origin. Finally, it should not normally sell for more than 180% of its metal value.

When you buy a bullion coin, you often pay a premium. A premium is a price that is higher than the current market price of the metal. This extra cost exists for several practical reasons. For example, bullion coins are often a very small size. This makes them easy to handle but requires careful work to make. There are also costs for manufacturing the coins. Companies must also pay for the storage and distribution of the metal. The amount of the premium changes based on demand and the coin's weight.

There are many famous series of bullion coins used around the world. The American Eagle and the Canadian Maple Leaf are two very well-known examples. These two series are quite unique in the market. They are the only coins available in four different metals: gold, silver, platinum, and palladium. This variety allows investors to choose different types of precious metals.

Many other types of bullion coins exist across different nations. You might find the British Britannia or the South African Krugerrand. Other examples include the American Buffalo and the Australian Kangaroo. Some countries produce coins like the Spanish Lynx or the Liberty. There are even coins like the Orzel, the Bielik, the Panda, and the Philharmonic. Some series, like the Noah's Arks, are also notable. All of these serve as different ways to hold precious metal value.

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