Bullion & Numismatics - What's the Difference?

Precious metals have long been in the toolbox of intelligent investors and collectors—they stabilise portfolios, hedge against inflation, and according to one study, those who held a 25 percent portfolio allocation of precious metals realised a nearly 1.65 percent increase each year compared to those without precious metals in their pocketbook.

But those ready to make the lucrative jump into acquiring precious metals are faced with a decision: should they invest in bullion or numismatics? And what exactly is the difference?

What is Bullion?

Bullion comes from the French word bouillon, while means “boiling.” Bullion comes to life after gold, silver, or other precious metals are boiled down to liquid and then cast into bars or coins.

It is its own form of money and has an eternal value.

Bullion coins have many faces. Popular coins like the Canadian Maple Leaf Coin, the Chinese Panda, or the Australian Kangaroo can easily be found amongst the global bullion market. But these coins don’t vary in values—their worth wholly depends on their weight and matches the market price no matter what is stamped on the front. Bullion investments are only as volatile as the market price.

SourceSilver Panda  |  2019 1oz Gold Kangaroo  |  1oz Maple Leaf

The realm of numismatics is an entirely different story.

What is Numismatics?

Numismatics is essentially the cogitation of all things money. But greater specificity leads us to coins, a distinct area of numismatics.

Numismatic coins are unique, valuable coins that have a separate value than the foundational value of the precious metal itself. Things that give a numismatic coin additional value are historical significance, scarcity, unusual markings—maybe they were even minted in a special way. The valuation possibilities for numismatic coins are essentially endless—there are a laundry list of classifications that can add value.

Source1920 Sydney Sovereign

Numismatic coins can be assessed through the Sheldon Coin Grading Scale; a 70-point system that assesses the coin’s quality. The higher the grade, the higher the value. A 1925 $20 St. Gaudens S gold coin with a numerical grade of 68 is around 500 times the spot price of gold, valuing $550,000.

What is the Best Use for Each?

Bullion is liquid—you can instantly trade it for cash and its value is eternal. And buying gold or other precious metals is similar to buying stock—the value raises up and down with the market. But numismatic coins are more volatile than bullion coin prices because the prices move with the valuation changes of bullion and with the emotion of coin collectors, which can be both very good and very bad from an investment standpoint.

If you’re an investor wishing to grow your portfolio, bullion is your best route. If you are a serious collector, your interest will likely fall into numismatics.

We’re Jaggards, Australia’s leading bullion dealer. View our selection of bullion and numismatic coins here.