What's The Difference Between Bullion And Numismatic Coins?

Perth Mint - There's enormous thirst for knowledge about precious metal coins as more people consider whether or not investing in gold and/or silver is right for them.

Reflecting the number of new investors currently taking their first steps into the market, one of our most frequently asked questions is about the differences between 'bullion' and 'numismatic' coins.

It's a great question that all 'gold bugs' will remember having to ask themselves while developing a passion for precious metals!

What is a Numismatic Coin?

It helps to characterize numismatic coins so as to appreciate the differences in the way bullion coins are manufactured and marketed.

A numismatist is someone who does more than simply collect coins. They actively study currency, including coins and paper money, or related items such as tokens and medals. Particularly, they're interested in its historical, social and artistic significance.

Rightly or wrongly, the term numismatic has been adopted by many to describe modern commemorative non-circulating legal tender releases featuring design themes for collectors.

Produced by many of the same mints worldwide that offer bullion coins programs, numismatic issues exhibit exceptional finishes. Unlike circulating coinage, for example, they combine a highly polished (i.e. proof) table that is literally mirror-like, with superb clarity and definition of the raised, frosted elements (relief).



Including intricately coloured, gilded and antiqued coins, modern numismatic releases demonstrate the highly skilled art of the coinsmith. As well as being beautifully finished, they are also typified by a tightly restricted mintage, numbered certificate of authenticity, and decorative packaging.

Motivation to acquire such coins is often complex. For many it is the strong desire to own something rare and intrinsically valuable with an aesthetically pleasing design that reflects a personal interest.

What is a Bullion Coin?

In contrast, a person's interest in bullion coins is likely to be driven by different needs - namely, the desire to speculate in gold and silver; or, more shrewdly, to invest in precious metals over the long term as a store of wealth. Bullion coins can do this because they are valued on the basis of the weight of their precious metal.

Our recently-released 1oz Silver Kangaroo is a classic example of a bullion coin. Like the large majority of our numismatic coins, it is issued as Australian legal tender - its guarantee of weight and purity. However, it is mass-produced in unrestricted numbers with a more basic finish, and comes without display packaging or a certificate.

These factors represent the key to its attraction for investors. They allow the coin to be sold with a low mark-up or 'premium' - a small sum over the price of metal to cover the cost of fabrication, including the wages of those involved in design, production, quality control and so on.

As such, the price of a single Silver Kangaroo is only a few dollars above the international 'spot' market rate for silver - the benchmark price per ounce you see quoted on the nightly finance report. In short, it represents a cost-effective, trustworthy, and easily tradeable method of gaining exposure to the silver price.



Semi-Numismatic Bullion Coins

It won't take long for anyone researching the differences between modern numismatic and bullion coins to see references to 'semi-numismatic' - a potentially confusing third category!

The Perth Mint is probably guilty of inspiring its origin when, back in 1987, it introduced the Australian Nugget gold coin featuring a far superior bullion finish to anything else available at the time. Essentially, this involved striking shiny relief elements on a frosted table - the reverse of how they appear on a proof coin.

Today, our gold Kangaroo, gold and silver Lunar, silver Kookaburra and silver Koala bullion coin series are all renowned for their 'reverse proof' finishes. Sold at spot plus premium, they're highly sought-after by investors. Yet with annual design changes and, in some cases, a limited mintage, they are also favoured by collectors.



Thanks to their innovative combination of quality and value, these outstanding coins have occasionally provided canny investors with bonus returns. Like all precious metal coins they have a 'buy back' or 'melt' value which is aligned to the spot market. But thanks to strong collector demand for some of our semi-numismatic releases, secondary market values have been known to exceed the prevailing price of their metal.