Gold bullion is non-metallic metal that’s been refined into a high quality of pure elemental purity. The word is usually applied to all pure gold and silver bullion and typically to semi-precious gold as well.
While the pure gold content may be higher in comparison to the common bullion, the price is usually lower. The common variety of gold bullion can only be bought in legal tender from authorized sellers and it can’t be transferred electronically, except for the existing account holders.
The reason why Canadian gold bullion is so cheap when compared to gold in the USA is because of the open market. Unlike in the US where there are large gold mining companies which dominate the mining industry, Canadian companies have to be smaller to survive in the market. This means that the government plays an active role in regulating the gold mining companies.
The result is that investors in Canada get a chance to buy high quality gold bullion at a low price. That’s why there are so many Canadian investments in gold bullion banks. Usually, investors find these banks through a broker, which is an institution or individual that buys and sells securities, including gold.
One of the common methods of buying gold bullion in Canada is through the purchase of bars. There are several types of bars available and investors need to study them carefully. Canadian gold bullion bars come in different sizes and designs – from simple round bars to larger bars with images and engravings on them.
Most investors buy physical gold bullion in bars because it’s easy to obtain and store. There are other types of gold bullion available for purchase, including coins, rounds, Troy ounces, American eagle gold coins, Swiss Vreneli and others.
When buy bullion in bars or coins, investors need to check their purity. Purity refers to the percentage of pure gold in a bar or coin. The rareness of a coin can also be a sign of its purity, since rare coins have fewer minted compared to common ones. A higher percentage of pure gold in coins results in less expensive pieces.
Canadian bullion coins also have different grading systems according to their purity and quality. Commonly used systems are the grading scales that are based on the least expensive (the melt value) and the highest (the standard score) grades. Except for the melt value, all other values are derived from the standard score.
Gold bullion investors must take note that the prices of gold coins and bars can change dramatically over time. That’s why they trade on established futures exchanges like the New York Board of Trade (NYBOT) and the Chicago Board of Trade (CBOT).
These two venues have the advantage of being regularly followed by gold buyers and sellers, making it easier to participate in trading activities. For new investors, these two venues are also good places to start learning about trading and investing.