The word bullion, when applied to valuable metals, means bulk forms valued for mass and purity and not at face value as money. Bullion Gold Bars are traded in commodity markets, while gold bullion coins make their rounds amongst collectors. The purity of bullion varies, except for gold 99.99% purity is the standard. Examples of gold bullion coins are the South African Krugerrand, Canadian Maple Leaf, Australian Nugget, Britannia, and American Gold Eagle.

Gold investments are frequently bought as hedges against inflation and economic downturns. Gold values vary very little, inferring that a gold investment bought with your local currency will still have a high value even if your local currency somehow loses the majority of its price. As an example, let us consider a well off man in his home country. He buys gold bullion bars, solely to be safe. War breaks out, his country’s economy crashes, and he is compelled to flee his country. With the gold bullion bars, he is ready to start a new life somewhere else with ease, as his as his monetary resources are secure. If he had brought money with him, it would be of tiny value, what with his country’s economy down the drain. This is by far the most valued property of gold bullion: its liquidity or ease of conversion to cash anywhere in the world makes it a universal currency that holds more or less the same value at any time.

Gold doesn’t react easily with other elements or compounds, so a gold bar or gold coin will maintain its mass under normal conditions. Bullion gold trading is controlled largely by the London Bullion Market Association or LBMA for short. The LBMA is a group of bullion trading corporations and global banks that set the price for gold around the planet. The prices are set daily with the London Gold Fixing, a telephone conference amongst 5 of the LBMA’s members. While the physical trading of gold is done all around the globe, a lot of the wholesale trade is cleared thru the LBMA. As of the time of this article’s writing, gold is priced at almost USD 890.

Majority of gold trading occurs in the towns of London, Manhattan, and Tokyo, in descending order of trade volume. The only real thing that would cause the value of a dear metal to drop is the discovery of a new source or process that makes production less complicated. Aluminum, as common as it is today, is used to be more expensive than gold. The invention of the Hall-H?roult process caused aluminum to permanently lose the majority of its price. Gold still remains rare, so its worth as an investment will continue for the foreseeable future.
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