Introduction to Precious Metals
Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Historically, precious metals were important as currency but are now regarded mainly as investment and industrial commodities. Gold, silver, and platinum are the most common investment metals, and Olevian Numismatic Rarities offers a full product line of these elements.
Precious metals in bulk form are known as bullion and are traded on commodity markets. Bullion may be cast into ingots or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money. The level of purity varies from issue to issue, but “three nines” (99.9%) purity is common. The purest bullion coins are in the Canadian Gold Maple Leaf series, which may be as high as 99.999% purity. It is worth noting that 100% pure bullion cannot be produced, as the ability to extract impurities reaches an asymptotical limit at 100%.
Many governments and private manufacturers cast precious metals into bars, also known as ingots. The weight and purity of these ingots are guaranteed by the respective producer. Bars come in a wide variety of shapes and sizes, ranging from a single ounce to 1,000 ounces or more. Ingots are convenient ways to own precious metals in bulk form for small premiums over the spot metal price. However, very large bars may be less liquid than small bars or coins because only a select number of people can afford to buy such a large amount of metal at one time.
Many nations also mint bullion coins. Although nominally issued as legal tender, the face value of these coins is far below that of their value as bullion. The minting of bullion coins by national governments gives them some numismatic value in addition to their metal value, as well as certifies their purity. They typically sell for a small premium over the intrinsic metal value. Since coins generally contain an ounce of metal or less, they permit small increments of investment, are affordable to more investors than large bars, and enjoy the highest liquidity. Common bullion coins include the American Eagles and Canadian Maple Leafs, which are available in gold, silver, and platinum compositions. PCGS and NGC certified bullion coins are also available to the interested investor. These and other bullion coins are described in detail throughout the ONR website.