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What is Bullion?


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What is bullion?

Bullion is strictly defined as gold or silver in bulk before coining or valued by weight.

What bullion is not:  a grade of coin deemed to be much less than perfect. Although a numismatic coin could be damaged to such an extent, that its value is purely that of bullion.

I think the word bullion is used far too much in the hobby and especially on this forum.

If a coin is referred to as bullion or bullion grade, it implies a coin that has no numismatic value but should be valued purely on its weight of precious metal. This should be at the prevailing or current rate for that type of coin, which could vary from the value a dealer would buy at, through melt value, up to a suitable premium. This itself may vary depending on the current spot value and whether this has recently changed to a significant degree.

It is the issue of premium that causes so many problems and misunderstandings. There are many coins produced by the mints and sold at prices far in excess of what could be classed as bullion. However, these coins are sold as bullion grade as opposed to the corresponding collector’s issue e.g. proof. Perhaps business strike should be used instead?

The price of these coins at issue is at the mercy of the mint but the secondary market value will be based on the underlying metal value, and supply and demand, although this may well be influenced by the issue price.

Many of these coins will have a limited mintage and, if there is a sufficient collector base, should be classed as numismatic or semi-numismatic.

To describe a coin as scarce or rare implies a certain numismatic value but this should not justify a price of more than fair bullion value for a coin if it has also been described as bullion grade due to damage. IMO the word bullion should never be used unless in the context of a coin or bar valued by its intrinsic weight of metal. A damaged numismatic coin should be described as that and a suitable value attached which will be determined by a combination of its bullion value, condition and scarcity.

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We have discussed this with reference to VAT on imported coins - where coins and medallions which are 'collectors' pieces of numismatic interest' should have 5% and not 20% VAT levied by HMRC customs. It is a massive bee in my bonnet as i resent paying anything to the pirates.

Bullion is physical precious metal in a bar, coin, or round form almost entirely valued by its precious metal melt value alone. As always you have to read this sort of thing carefully - 'almost entirely' means there is some other value element other than melt value. BUT it does not say what constitutes that value. It could be the metal has been cut, stamped or cast into an exact weight and is of an exact purity - this clearly has utility value. What it isn't is collector value and collector value is not confined to PF70 coins.

Virtually everything sold on the forum is not bullion. Virtually every silver coin or medallion (which i include most rounds into) sold here are collectors' pieces of numismatic interest b/c members of the forum are on this forum b/c they are collectors and we collect pieces b/c they have collector (numismatic) interest. We don't in general accumulate silver shot. Occasionally we see bags of casting silver and some mega spotty coins sold and this is bullion but after that coins and medallions are sold with part of their value being their collector value. The legislation does not say 'special' numismatic interest - it doesn't say 5 x spot price - even 1 penny collector value is a collector value and numismatic interest is a subjective term in any case.   

The pirates out of ignorance, machismo, blood mindedness, want to collect as much VAT as possible will not want to define anything as having collector interest. We are the experts what do they know in any case. Most members here too readily define pieces as bullion (no collector value) and yet they as collectors are collecting them and paying premiums over melt. 
 

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Royal Mint's definition of bullion which is near enough IMHO.

 

Bullion coins are generally bought for their intrinsic qualities, and to be kept as a store of value. The production of Bullion coins places an emphasis on efficiency. They are struck at a rate of up to 250 gold and 3,000 silver coins per hour, and have a similar standard of finish to circulating coins. This is to avoid the premium of producing coins to Proof and Brilliant Uncirculated standards.

The finish on Bullion coins is not intended to particularly highlight the detail and artistry of the coin’s design, or the craftsmanship and skill of its minting.  However, Royal Mint Bullion coins are renowned for their distinctive and beautifully rendered designs.

The problem with common sense is, its not that common.

 

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1 hour ago, sixgun said:

We have discussed this with reference to VAT on imported coins - where coins and medallions which are 'collectors' pieces of numismatic interest' should have 5% and not 20% VAT levied by HMRC customs. It is a massive bee in my bonnet as i resent paying anything to the pirates.

 

 

 

Ditto that(Pirates) HMRC seem to have a default of 20% on everything silver coinwise even if you have correct statement of contents & codes, IMHO they deliberately ignore info to frustrate you & get as much revenue from you illegally. You just have to use your common sense & fight back when dealing with these pirates, I'll leave it at that lol.

The problem with common sense is, its not that common.

 

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What bullion is not:  a grade of coin deemed to be much less than perfect. Although a numismatic coin could be damaged to such an extent, that its value is purely that of bullion.

What would you like these types of coins to be called or classified as?

You are being finicky btw 😛

 

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37 minutes ago, Kman said:

What bullion is not:  a grade of coin deemed to be much less than perfect. Although a numismatic coin could be damaged to such an extent, that its value is purely that of bullion.

What would you like these types of coins to be called or classified as?

You are being finicky btw 😛

 

Numiscrap

“Nowadays people know the price of everything and the value of nothing.” Oscillate Wildly

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my understanding is that bullion(valued at melt) is

the lowest grade(s) possible.

eg a 1982 half sovereign at all of the lowest grades

can be classified as bullion.

the problem comes when people use it as a catch

all on items they are selling with a numismatic

premium. it's effectively a lucky dip scenario only

with all items priced at near the top of the range.

(sellers would argue that the items are worth more.

which usually is them being unrealistic about the

market for their items)

many use the word bullion as a get out clause to

evade responsibility.

doa's exist in all industries and policies should be

in place to separate the acceptable from the bad.

 

HH

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Yes, why not grade them using the terms we have used for many years or even using the US Sheldon scale if you must?  Then mention any specific damage as well?

I've noticed some dealers selling coins graded as bullion when it isn't a recognised grade and you can end up with something that looks like someone has put it in a bag of grit and taken a hammer to it or a coin that looks like it has just left the mint.

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