Precious metal bullion products are standardized amounts and purities of the metal in a physical form such as coins, rounds or bars. These bullion products are produced around the world by both government and private mints for the purpose of investing in a particular precious metal. The metal’s purity must meet or exceed the following in order for it to meet the IRS definition of investment metal bullion as described in 26 U.S. Code § 408(m)(3)(B):

• Gold: 99.5% pure
• Silver: 99.9% pure
• Platinum: 99.95% pure
• Palladium: 99.95% pure

The two most commonly used units of weight associated with bullion are troy ounces (oz t) and grams (g). One troy ounce equals 31.1034768 grams.

Government vs. Private Mint Bullion

Bullion is produced by both sovereign mints (governments) and private mints. Sovereign mints, such as the United States Mint, The Royal Canadian Mint, or the Perth Mint, generally produce bullion in the form of legal tender coins, although there are a few exceptions to this. Bullion coins are not produced for commerce like regular circulating coins. Even though bullion coins have a face value on them representing an amount of that sovereign country’s currency, that face value is almost always considerably less than the underlying value of the metal itself. Since these sovereign bullion coins are produced to the strict legal standards of the issuing government and they are often more difficult to counterfeit, they generally cost more versus bullion products issued by private mints.

Private mints and refiners, such as Johnson Matthey, PAMP Suisse and Republic Metals, produce bullion in the form of bars and rounds. These products are not backed by any government, only the quality and reputation of the mint itself. Fortunately, the private mints doing the most business in the global bullion market have stellar reputations and have earned the trust of their customers. The cost of private mint generic bullion is almost always less than sovereign mint bullion. This can be appealing to customers who seek to maximize the amount of bullion they wish to purchase given their budget.