Bullion trading involves buying and selling precious metals such as gold, silver, platinum, and palladium in the form of bars, coins, or rounds.
Un collectibles, bullion’s value is primarily based on its weight and metal content, making it a choice for investors seeking a reliable store of wealth.
This market offers various avenues, from physical ownership to digital and futures trading, catering to both short-term traders and long-term holders.
Understanding how bullion trading works, its benefits, and potential risks is essential for anyone looking to enter the precious metals market.Table of ContentsWhat Is Bullion?How Does Bullion Trading Work?How You Can Purchase and Invest in BullionSee All 12 ItemsWhat Is Bullion?Bullion is the physical form of precious metals.
Some familiar types of bullion include gold bars, silver coins, and platinum ingots. The essential quality that defines bullion is purity.
The material needs to be at least 99.5% pure after being cessed by a mining company to be considered bullion.It’s believed that the origins of bullion trading go back six centuries.
Gold and silver had become per currency for trade, replacing the exchange of other goods and services. In time, these precious metals became economic barometers.
For example, the “gold standard” is still a measure of the value of a country’s paper money and coins.Today, bullion bars are primarily owned and traded by institutional investors.
Central banks hold around 20% of mined gold in their reserves. These reserves are used in large-scale economic ventures resolving debt between countries and lending to boost economic activity.
Given the globally established value of gold and silver, many private investors seek to take advantage of the bullion market.
How does the common investor gain access to it?How Does Bullion Trading Work?The bullion market never closes.
Most bullion trading happens in London in over-the-counter , along with other major economic centers New York, Tokyo, Shanghai, and Zurich.
Usually, bullion trades are managed electronically or over the phone. in bullion coins and bars is a lot in traditional assets.
spective buyers determine the current value and demand for precious metals. They analyze the long-term spects of holding on to gold and silver.
Finally, they choose the investment venues that work best for them and execute the transaction.The classic perception of bullion is its physical image: mountains of gold bars held in massive volume inside a well-fortified bank vault.
But market players can choose from other vehicles for bullion .How You Can Purchase and Invest in BullionThe modern investor has several options for getting into the bullion trade.
These are three of the most common.Physical FormThe most straightforward form of bullion , of course, is purchasing the physical item.
Gold and silver bars or coins are offered by apved dealers and merchants.
Transactions are commonly conducted through agencies the American Precious Metals Exchange (APMEX) or through traditional dealers and online outlets.Paper certificates are also considered to be physical forms of bullion.
Rather than keeping the gold bars stashed away in one’s basement, an investor can keep their precious metals stored in the bank that has issued the certificate of ownership.Exchange-traded Funds (ETFs)An ETF is similar to a mutual fund in that it pools multiple investment vehicles into a of automatic portfolio.
Un most mutual funds, ETFs can be traded on public platforms the stock market.
Many investors favor ETFs because they’re quick ways to diversify portfolios and don’t require physical ownership.Most ETFs consist of assets that have something in common, such as Fortune 500 corporations, environmental companies, or es with small-to-medium market values.
A number of funds focus on precious metals and bullion, including the SPDR Gold Trust (NYSEARCA: GLD), is Silver Trust (NYSEARCA: SLV), Invesco DB Precious Metals Fund (NYSEARCA: DBP), and many more.TickerCompany±%PriceInvestDBPInvesco DB Precious Metals Fund1.43%$75.70Buy stockSLVis Silver Trust-0.54%$33.33Buy stockGLDSPDR Gold Trust0.67%$302.99Buy stockStart Your Free 14-Day Benzinga TrialFutures ContractsAnother vehicle for is a futures contract.
This is a legal agreement to exchange certain assets for a fixed price, to be dered at a given future date.
Investors commonly deploy futures contracts to manage anticipated price fluctuations.Futures contracts come in long and short positions, which roughly correspond to buying and selling, respectively.
Someone executing a long position wants to purchase the commodity at a guaranteed price in the future.
The short position works the same way for someone wishing to sell at an agreed-upon rate.The advantages of futures contracts include the considerable leverage they offer investors.
For an initial capital investment far lower than the asset’s full value, a trader can lock in a future purchase at a predetermined rate.
Even if the asset value dramatically increases by the agreed purchase date, the buyer only pays the price as given in the futures contract.
Gold and silver futures contracts are issued by centralized institutions.
This arrangement means that the exchange is more secure and that investment risk is minimized, if not avoided altogether.Is Bullion a Good Investment?Precious metals have historically been viewed as solid investments.
Gold’s value corresponds to economic growth: when the cost of living increases, so does the value of gold.
Many invest in gold as a hedge against future inflation that could reduce the value of paper currency.Gold and silver are also globally recognizable assets.
Their value and worth are generally immune to geopolitical turbulence and change.
The duction and sale of precious metals are highly regulated through trustworthy, centralized institutions.Who Can Invest in Bullion?What kind of investor is suited to bullion trading?
Any investor who is conscientious and pays close attention to their portfolio could participate.
Many bullion investors enjoy having tangible, material assets gold bars or silver coins that are not as subject to the wild variations and speculative nature of stock s.Most bullion investors have a keen eye on the future.
They see their investments as long-term positions that could increase in value over time. But bullion trading also appeals to more casual investors. There’s something simple gold bars.
They’re uncomplicated and require less in-depth analysis than more complex investment assets.Factors to Consider When in BullionAs a spective bullion trader, you should consider a few factors before executing a gold or silver trade:Storage: Will you maintain possession of the bullion, or will the bank keep it?Liquidity: Will the asset remain in enough demand that you can easily cash out?Fees and Commissions: How much will a brokerage charge for the transaction on top of the price?
For futures contracts, what is the initial margin you’ll be charged?Insurance and Taxes: What premium will you have to pay to keep the assets safe?
What local or federal tax laws might affect the cost of purchase?Best Marketplaces for Bullion Investors have several options for bullion .
Some of Benzinga’s most favored gold and silver marketplaces include:American Hartford Gold Group ReviewBest For:Gold IRAs with On Going motions VIEW S & CONS:securely through American Hartford Gold's websiteGet Started with American Hartford Gold GroupPriority Gold ReviewBest For:Precious Metals and CoinsVIEW S & CONS:securely through Priority Gold's websiteGet Started with Priority GoldBullion: A Historically Solid AssetBullion has a longer, more resilient history than almost any other investment avenue.
Gold, silver, and other precious metals have ven to be reliable instruments of economic growth for centuries.
Whether bullion will be a cornerstone of your portfolio or an alternative investment vehicle, it’s worth taking into consideration.Frequently Asked QuestionsQIs gold bullion illegal?A No, gold bullion is not illegal.
In most countries, including the U.S., it is legal to buy, own, and sell gold bullion.
However, some nations may have restrictions or require reporting for large transactions, so it’s important to check local regulations.
QHow much is 1 gold bullion worth today?AAs of July 31, 2025, the spot price for one troy ounce of gold bullion is apximately $3,300. QWhat is a bullion trade?
AA bullion trade is an agreement to buy precious metals in physical form. The most common types include bars or ingots of near-mint gold or silver.
For trading purposes, jewelry is not considered part of the bullion exchange.
Sarah EdwardsSarah Edwards is a finance writer passionate helping people learn more what’s needed to achieve their financial goals.
She has nearly a decade of writing experience focused on budgeting, investment strategies, retirement and industry trends. Her work has been published on NerdWallet and FinImpact.