Gold bullion is a bulk form of the precious metal used for trading on commodity markets. Gold bullion is usually cast into ingots or coins.
Gold bullion, a form of gold used to make trading easy, gets its value from the relative rarity of the metal itself. Value of gold bullion is further determined by the mass and purity of the coin or ingot. Most gold bullion is issued at 99.9% purity, although some goes up to 99.999% purity. Bullion is graded by "Troy ounce" which defines the weight of gold contained within the coin or ingot. One troy ounce is equivalent to exactly 31.1034768g - the typical value of a gold bullion coin. The most common bullion coin, the Krugerrand, contains exactly one Troy Ounce of gold for instance.
Because of the weights involved, gold bullionin the form of ingots is extremely expensive. Gold coins tend to be cheaper per unit making them an ideal investment vehicle for speculators seeking more stability in value from their savings. The lower cost of a gold coin also lowers the barrier to entry into the gold commodity trading and investment market for investors. Gold coins such as the Krugerrand and the British Sovereign offer the same relative value as ingots, thanks to consistent mass and purity of the gold.
Gold bullion is popular with governments, businesses and individuals because it can be used to protect against inflation and economic downturn. The value of gold is independent of local currency issues, retaining significant value at all times across the world.
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