Bullion vs Numismatic Coins

There are two main categories when it comes to investing in precious metals coins: bullion and numismatics. Bullion coins are those which are valued based on their intrinsic metal content, while numismatic coins (in other words, collectible coins) are valued based on various intangible factors, such as age, rarity, design, and mint.

If you’re unsure whether you should invest in bullion or numismatic coins, in most cases the answer will be to choose bullion coins. The numismatic coin market is incredibly complex and requires careful understanding before you dive in. That said, let’s look at the difference between numismatic and bullion coins to help you learn more about these two markets and decide which is best for you.

What are bullion coins?

Bullion coins are gold and silver (or platinum and palladium to a lesser degree) coins purchased for three main reasons: investment, inflation hedge, or financial security. The weight of bullion coins is expressed in even amounts per troy ounce, for example, ½ oz or 1 oz.

Bullion coins are usually produced on a yearly basis by various government (or sovereign) mints. Examples of popular bullion coins include:

• American Gold Eagle
• Gold Krugerrand
• Canadian Silver Maple Leaf
• Gold Britannia
• Vienna Silver Philharmonic.

Buying bullion coins is a time-honored investment and wealth-preservation strategy. They are easily bought and sold, aesthetically pleasing to look at, and exhibit amazing craftsmanship.

A subcategory of bullion coins are gold and silver rounds. These have more generic designs than ‘sovereign’ coins but are considered collectible and therefore often sell at a higher premium.

See More: What are the Best Gold Coins to Buy and Why? From Kruggerands to Maple Leafs

How are bullion coins valued?

Bullion coins are valued based on the mass and purity of their underlying content and the current spot price of their metal. This is referred to as ‘intrinsic value’ or melt value.

For example, a 1 oz Canadian Gold Maple Leaf coin, which is made from 24-karat gold, will be valued based on the current spot price of gold. Less pure gold coins, such as the American Gold Eagle or Gold Krugerrand, which are made from 22-karat gold, will be valued slightly less than the spot price due to their lower purity.

The pricing of bullion coins is transparent and readily available to anyone, at all times. You can usually find the spot price of gold, silver, and other precious metals, on dealers' websites at the time of purchase so you know you’re getting a fair price at the time of buying.

Keep Reading: What Drives the Price of Gold?

What are numismatic coins?

Numismatic coins, also known as collectible coins, are gold and silver coins that are no longer in production. Their limited supply makes them incredibly rare and this gives them additional value beyond their intrinsic precious metal content (i.e. melt value).

The value of numismatic coins generally depends on intangible factors, such as their rarity, age, condition, design, collectability, and mint they were struck from. In most cases, people who buy numismatic coins are coin collectors and do so as a hobby for personal enjoyment as opposed to investment purposes.

Examples of numismatic coins include:

• Pre-1933 Eagle coins
• British Sovereigns
• Swiss 20 Francs
• Peace Silver Dollars.

Numismatics can be a rewarding and enjoyable activity, but it comes with higher risk than investing in bullion silver and gold coins. Before you dive into the world of rare and collectible coins, we highly recommend spending time researching and educating yourself to understand the process. To avoid being ripped off, it’s important to do due diligence before you buy any numismatic coin and have a strong understanding of how they’re valued and graded.

See: How Much Does it Cost to Grade a Coin?

How are numismatic coins valued?

The world of numismatics isn’t like bullion, where prices are transparent and updated in real-time to show you the value of your holdings or what you’re buying. Numismatic coins are usually valued based on ever-changing, subjective metrics that are almost impossible to quantify, including:

• Demand for that particular coin
• Rarity
• Condition
• Market timing
• Country of origin
• Method of auctioning.

As you can see, there’s a lot more that goes into valuing numismatic coins than simply the weight of their metal content, which is how bullion gold coins and other precious metals coins are valued. This also means that the numismatics market isn’t as liquid as the bullion coin market, and it might be challenging to find buyers willing to pay what you deem is a fair price at the time you want to sell.

In any case, if you’re looking to invest your money and make some quick cash, numismatics is not the way to do it.

What are semi-numismatic coins?

Semi-numismatic coins, sometimes called commemorative or proof coins, are a combination of bullion and numismatic coins:

• Unlike numismatic gold coins, semi-numismatic coins are new and not historical.
• Unlike bullion coins, semi-numismatic coins have a limited mintage (total number produced).

Being rare coins, semi-numismatic coins can increase in value over time and be worth more than their melt content. This combination of factors makes semi-numismatic coins attractive to both investors and coin collectors.

Examples of semi-numismatic coins include:

• Tudor Beast Series
• Australian Kookaburra Silver Coins
• Perth Mint Lunar Series

One type of semi-numismatic coins are commemorative coins. These are usually produced in limited runs to honor a specific event, such as the Olympics or a historical event. Their limited issues makes these coins rare, initiating higher premiums over their bullion value. That said, it’s not common to see commemorative coins appreciate beyond their intrinsic metal content.

You’ll often see commemorative coins advertised as being ‘Mint State’ or ‘Brilliant Uncirculated’, however this doesn't mean much in the context of these coins compared to numismatics. Most people who purchase commemorative coins are those looking for a keepsake as opposed to investors or numismatic coin collectors.

See Similar: How to Read a Coin – Components of a Coin: Obverse, Reverse, Edge and Inscriptions

What’s the difference between bullion & numismatic coins?

There are many differences between gold and silver bullion coins and numismatic coins, including the way they’re valued, their purpose, mintages, premiums, and more. Let’s look at each of these differences to compare bullion and numismatic coins side by side.

Valuation

Bullion coins are valued based on the weight and purity of their intrinsic metal content. Their price will be similar to the current spot price of the metal they’re made from, with a small premium added for minting and distribution.

Numismatic coins are primarily valued based on their rarity, historical significance, and demand amongst collectors. Condition also plays a part in the value of collectible coins and professional grading services exist to provide unbiased assessments of a coin’s condition.

To sum it up, bullion coins are valued based on their intrinsic metal content while numismatic coins carry extrinsic value beyond their metal content.

Rarity

Bullion coins are generally minted in large quantities by government and private mints, making them widely available. They usually feature standard, recurring designs and are produced on a yearly basis, so they’re not considered rare.

Numismatic coins are usually no longer in production, either because of a limited mintage or being minted in a historical period. They’re largely considered rare and their rarity is defined by historical context, minting error, or being part of a limited series.

Purpose

Bullion coins are primarily purchased as a way to invest in precious metals, hedge against inflation, and provide financial security.

Numismatic coins, on the other hand, are mainly purchased by enthusiasts who enjoy collecting coins and value their historical and artistic features. Numismatics is considered a hobby while bullion is an investment.

Premiums

Bullion coins carry a slight premium over the metal’s spot price, mainly to cover the cost of minting and distribution.

Numismatic coins, on the other hand, can carry significant premiums based on their rarity, condition, and demand. Premiums are more subjective in the world of numismatics and can depend on the coin’s historical significance, grading, and uniqueness.

Continue Reading: What Drives Silver Prices?

Liquidity

Bullion coins are highly liquid and easy to buy and sell. Because they’re standardized and have widespread recognition, authentication is easy and you won’t struggle to find a willing buyer. Most precious metals dealers and investment platforms will happily buy bullion coins from you anytime.

Numismatic coins are less liquid than bullion coins. You may struggle to find a buyer interested in your specific coin, and because pricing is less transparent, they may not be willing to pay what you think the coin is worth. To sell a collectible coin, you’ll often need to find a specialized marketplace and buyers who understand the value of what you’re selling.

Storage

Both bullion coins and numismatic coins demand safe and secure storage, however it’s even more vital to preserve the condition of numismatic coins. Their value is usually dependent on how well they’re preserved, and so it’s essential to keep them protected. Bullion coins, on the other hand, are mostly valued for their metal content and so condition is not as important.

See: What is the Proper Way to Store Gold?

Investment potential

Buying bullion coins is a common investment strategy that’s suitable for both short-term trading and long-term investment. People who buy bullion coins do so for investment purposes and will drive their decisions based on economic indicators and market trends.

Numismatic coins can be a form of investment but are mainly considered a hobby. When it comes to investment potential, they’re less suitable for short-term trading. They can, however, work as long-term investments if their value increases over time due to historical significance and rarity.

Should I buy bullion or numismatic coins?

Deciding between buying bullion coins or numismatic coins depends largely on your personal interests. If you’re looking to invest in precious metals, then bullion coins are for you. If you’re looking to purchase rare historical artifacts, then you may enjoy numismatics.

Both of these options have their benefits. If your primary goal is to make an investment that preserves your wealth, provides a hedge against inflation, and can easily be bought and sold, then bullion coins are probably the better choice. They’re highly liquid, are easy to navigate, and have been used as a store of value for generations.

On the other hand, if you’re intrigued by the rarity, historical significance, and potential value appreciation beyond metal content, numismatic coins might be more suitable. These coins are less liquid and require a good understanding of the numismatic market, which is why they’re reserved for passionate individuals who don’t mind researching deep into the world of coin collecting.

Ultimately, bullion coins are easy, low-risk, and straightforward investments while numismatic coins can be a good investment but require due diligence and are more for people interested in the stories and history behind each coin.

Bullion vs numismatic coins

Let’s take one last look at what separates bullion and numismatic coins. We’ve outlined the key differences between bullion coins and collectible coins in this table below.

Summary: Bullion vs numismatic coins

Both bullion and numismatic coins offer a way to invest in precious metals, however the primary purposes they serve are very different. Silver and gold bullion coins are widely available, have transparent pricing, and are easily bought and sold. Their value is based on their gold or silver content and even a beginner can dive right in and begin investing with little knowledge.

Collectible coins, on the other hand, are rare and carry numismatic value beyond their metal content. Pricing is more opaque and can depend on various intangible factors. Before you begin investing in numismatic coins, you should spend time researching the market so you can adequately assess a coin’s value and avoid overpaying.

If you’re ready to invest in a gold or silver coin that will preserve your wealth, offer a hedge against inflation, and provide a store of value for generations, you’re in the right place. StoneX Bullion carries a vast range of gold, silver, platinum, and palladium bullion coins and bars from the world’s most prestigious mints. With prices updated each minute, you’ll always know the exact spot price of the precious metal you’re purchasing and what your investment is worth. Search our range and find a coin to crown your collection today.