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Jan
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Bullion is simply a precious metal, refined to a specific purity and cast in a standardized form that makes it convenient for various purposes. Bullion is oftentimes cast into coins. These coins, when they are produced by a treasury, are usually given a face value. One dollar is very common. This face value, however, is really not what determines the value of the coin. It is the mass of the bullion used in its manufacture that determines its value. The value is subject to the movement of the market and is one of the most important measures of the overall health of the world economy.
Bullion that is cast into bar form is usually designed to be easy to transport and store. There are extensive record-keeping requirements associated with bars of precious metals, especially gold. The bars are stamped with identifying marks and with the purity of the metals which they contain. They are usually also accompanied by a certificate that verifies their authenticity, their place of manufacture and other important information. These measures help to ensure the purity of the material and act as deterrents to those who would attempt to steal or counterfeit bullion.
Bullion that is cast into bar form is referred to as an ingot. Ingots come in many other shapes and sizes, however. In the past, materials that are no longer precious metals were cast into ingots. Aluminum bars were once incredibly expensive. Aluminum, however, is the most abundant metal on Earth and its value was due to the difficulty of extracting it. Once the extraction hurdle was overcome, the value of aluminum plummeted and one is more likely to see it in the form of foil than as an ingot in the modern world.
Gold and silver bullion, however, have remained valuable for thousands of years. These metals are rare, and a good amount of the world’s gold reserves have been in circulation for an incredibly long amount of time. When one is holding a coin cast of gold bullion in their hand, they may be holding the same gold that was a part of the decoration of an Egyptian pharaoh, or that was once a coin held by a merchant thousands of years ago. The fact that gold and silver are so incredibly durable and recyclable in bullion form is a great part of the value they possess.