Bullion means precious metal valued by weight and purity — gold and silver coins and bars bought as metal, not as collectibles. The entire game is two numbers: the live spot price and the premium you pay over it. This guide covers what bullion is, how pricing works, where to buy, the red flags that mark a rip-off, and how to sell when the time comes.
What “bullion” actually means
- Bullion = metal valued by weight. A 1 oz American Gold Eagle is worth (1 oz × gold spot) + a small premium. A rare 1933 double eagle is worth millions because of numismatic rarity — that is collecting, not bullion. Most beginners should start with bullion (goldsilver.ai; Provident Metals).
- Troy ounces, not regular ounces. Precious metals trade in troy ounces: 1 troy oz = 31.1035 grams. A “1 oz” gold coin holds one troy ounce of pure gold — an American Gold Eagle weighs more than 1 oz gross because it’s alloyed to 22K for durability but still contains exactly 1 troy oz of pure gold (goldsilver.ai).
- Spot price is the live market price per troy ounce of pure metal, set by global futures markets. It moves constantly during trading hours — any “melt value” you compute is only valid at that moment’s spot (FXEmpire).
- Premium = everything above melt. Minting, distribution, dealer margin. Fair premiums: small single-digit percentages for common 1 oz bullion coins; higher for fractional coins (minting cost spread over less metal), proofs, and anything with collector demand (Provident Metals).
How pricing works: the only math you need
- Melt value = pure metal content (troy oz) × spot price. Pure content = gross weight × fineness. Example: a 90% silver half dollar weighs 12.5 g → 12.5 × 0.90 = 11.25 g pure = 0.3617 troy oz → × $30/oz silver spot = $10.85 melt (Pacific Precious Metals; findbullionprices.com).
- What you pay = melt + premium. What a dealer pays you = melt − their margin (refining cost + profit). Expect to sell below spot and buy above it — the spread is how dealers stay in business (FXEmpire).
- Junk silver math: pre-1965 U.S. dimes, quarters and halves are 90% silver (“junk silver” / “constitutional silver”), typically traded in $1,000 face-value bags. One widely used rule of thumb: a $1,000 bag contains about 715 troy oz of pure silver after accounting for wear — always verify the factor your dealer uses (findbullionprices.com).
- Numismatic News’s rule of thumb for selling gold: if a buyer offers less than 75% of actual melt value for scrap gold, find another buyer (Numismatic News).
Where to buy
- Major online bullion dealers (the big national names) — transparent premiums, insured shipping, buy-back policies. Compare premiums across two or three before ordering.
- Local coin shops — you can inspect before buying and usually pay cash with no shipping; premiums run slightly higher than the big online dealers.
- eBay — fine for common bullion from high-feedback sellers; check sold listings (not asking prices) to calibrate. Use the market-check links throughout this wiki.
- Government mints — the U.S. Mint sells proof and burnished collector versions (at higher premiums); bullion Eagles/Buffalos go through authorized dealers, not direct.
- What to avoid: unsolicited callers pushing “rare” or “collectible” coins at huge premiums, anyone who won’t quote you the premium over spot, and deals priced below melt (counterfeit signal).
Red flags: how beginners get ripped off
- Grade-inflation and “semi-numismatic” markup. Common bullion coins in fancy packaging sold at 30–50% premiums with stories about future rarity. Bullion is bullion — pay a bullion premium.
- Bait-and-switch on gold content. Know the fineness before you buy: American Gold Eagle .9167 (22K), Gold Buffalo .9999 (24K), Krugerrand .9167, Maple Leaf .9999. Only the gold fraction carries melt value (goldsilver.ai).
- Counterfeits. Tungsten-core fake gold bars and coins match weight but fail on dimensions, ping, or XRF. A 0.01 g scale plus calipers plus the genuine specs (listed on every coin entry in this wiki) catch most fakes. For large purchases, buy certified (PCGS/NGC) or from dealers who test in front of you.
- Leverage and “storage programs.” Anyone selling you gold you can’t hold or audit is selling you a promise, not metal.
- Pressure tactics. “Gold is about to explode, buy now” is a sales script, not analysis.
Storing and selling
- Storage: home safes are fine for modest holdings (bolted down, discreet, insured via a rider); safe-deposit boxes and private vaults for larger ones. Never store bullion where its existence is widely known. Full guide: How to Store Coins So They Don’t Lose Value.
- Selling: get quotes from at least two dealers plus check eBay sold listings; expect 2–8% under spot for common bullion depending on form and quantity. Keep purchase receipts — your cost basis matters at tax time (consult a tax professional).
Bullion guides on this wiki
- How to Buy Gold Coins for Beginners — the full walkthrough: what to buy first, fair premiums, dealer checklist.
- Junk Silver Bags: What They Are & What to Pay — 90% silver bags explained, the 715-oz rule, fair pricing.
- Gold Buffalo vs. Gold Eagle: Which Should You Buy? — 24K vs 22K, premiums, resale.
- World Gold Coins hub — every major gold coin’s exact gold content and value drivers.
Market check
Compare live bullion listings on eBay:
Search eBay for gold bullion coins
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