Historically, precious metals were important as currency but are now regarded mainly as investment and industrial commodities.
Gold, silver, platinum, and palladium each have an ISO 4217 currency code.
The best-known precious metals are the coinage metals, gold and silver. Although both have industrial uses, they are better known for their uses in art, jewellery, and coinage.
The demand for precious metals is driven not only by their practical use but also by their role as investments and a store of value.
Precious metals have commanded much higher prices than common industrial metals.
A metal is deemed to be precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish. The status of a "precious" metal can also be determined by high demand or market value. Precious metals in bulk form are known as bullion and are traded on commodity markets.
Bullion metals may be cast into ingots or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money.
Many nations mint bullion coins.
Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion.
Bullion coins' minting by national governments gives them some numismatic value in addition to their bullion value, as well as certifying their purity.
One of the largest bullion coins in the world was the 10,000 dollar Australian Gold Nugget coin minted in Australia which consists of a full kilogram of 99.9% pure gold.
Austria has minted a coin containing 31 kg of gold (the Vienna Philharmonic Coin minted in 2004 with a face value of 100,000 euro).
As a stunt to publicize the 99.999% pure one-ounce Canadian Gold Maple Leaf series, in 2007 the Royal Canadian Mint made a 100 kg 99.999% gold coin, with a face value of $1 million, and now manufactures them to order, but at a substantial premium over the market value of the gold.
PURITY AND MASS
The level of purity varies from issue to issue. "Three nines" (99.9%) purity is common. The purest mass-produced bullion coins are in the Canadian Gold Maple Leaf series, which go up to 99.999% purity. A 100% pure bullion is nearly impossible: as the percentage of impurities diminishes, it becomes progressively more difficult to purify the metal further.
Historically, coins had a certain amount of weight of alloy, with the purity a local standard.
The Krugerrand is the first modern example of measuring in "pure gold": it should contain at least 12/11 ounces of at least 11/12 pure gold.
Gold and silver, and sometimes other precious metals, are often seen as hedges against both inflation and economic downturn. Silver coins have become popular with collectors due to their relative affordability, and, unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectibles, far higher than their actual bullion value.
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** Some of the Information on this site has been derived from different resources such as the National Financial Planning Association, Securities and Exchange and Commission, Department of Insurance and Investopedia
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