If you have money in terms of your provident fund or savings you were collecting for years, it’s time to invest this money profitably and HM Bullion is one of them. We know some questions puzzled you here as; why and how you will invest, what are the benefits associated with it. Don’t worry, as we discussed each parameter in detail to help you in your final decision. So, without any hesitation, let’s dive into the article to understand HM bullion better.
What Is Meant By The Term “Bullion”?
Before getting your hands on the investment opportunity offered by HM Bullion, it’s better to understand what bullion is. By definition, Bullion is the non-ferrous metal piece of the highest purity commonly used in the manufacturing of silver and gold coins. An interesting fact about the word Bullion is that it comes from the French term “Bouillon,” or informally as boiling. Technically, as per the Anglo-Norman term, they are made previously by refining metals in a melting house.
Even though bullion is no longer relevant for the production of coins in the circular economy, many people still consider it a decent investment offer at times of uncertainty. Precisely, bullion is physical silver and gold pieces of 99% purity reserved in the form of bars, coins, and ingots. It is a “broader term” that refers to all kinds of precious metals minted or cast for investment.
Bullion coins are fashionable metal coins minted by approved HM bullion agencies intended for investment. Back in the 20th century, some bullion like Krugerrand or Theresa Thaler was recognized as currency coins. Even though bullion has legal status but the irrelevant face value makes them irrelevant in circulation. Modern bullions have deep space as collectible proof and business strike coins such as American Silver Eagle and Gold Coin.
We have some private mint strikes as bullion bars, bullion wafers, and bullion rounds in the market. Their trading done is typically done at a higher price than exquisite metals price matching its metallic content. However, the collectible versions are available at a higher cost than the actual bullion melt value. Nonetheless, some minted strikes of bars and rounds do have an influence when sold as collectible. Thus, these could have sold as regards collectible pieces instead of bullion.
Metallic HM Bullion Is Different From Metallic Bars Or Ingots!
What if we told you that apparently, bars and ingots are the same, surprised? You may observe steel or other cheap metal bars or ingots used in the manufacturing industry. But the precious metal bars or Bullion are purer and expensive too and sold as it is ingot form. Bullions come with a serial number, purity, weight, assay stamp, and much more.
Metal Bullion And Gold Bars Are Not The Same!
However, people are not so familiar with the term bullion and often resemble it with the gold bar, but here lies a clear difference between them! Gold is a very exclusive term that represents gold as bars, coins, and other forms. But on the contrary, Bullion is an inclusive terminology that signifies precious metals like gold, silver, platinum, and more.
You can say that gold trading is one small part of the ocean of the HM bullion market. Still, it is an unarguable statement that no precious metal except gold has gained such acceptance when it comes to bullion trading. Also, in bullion trading, what we all meant is the investment in the physical market. On the other hand, despite being traded in bullion mare, gold holds its place in the future market.
How Is Metal Bullion Made?
The production of Bullion seems as simple as making metal coins but is a somewhat more complicated process. Here, we highlight some of the main steps to produce metal bullions of superior quality. In the making of Bullion, the first thing you need is gold, isn’t it too obvious? Firstly, the mining industry looked to discover gold ore on this earth’s circumference.
Gold removed from the earth in the form of mineralized rock or ore is then sent towards the extraction process. Then, either by chemical or heat extraction, what we obtained is called “parted bullion” or pure Bullion simply. In case of any impurity of other metals, the bullion we extract is called “unparted bullion.” The reason why we are explaining the manufacturing of Bullion so that you will have a better understanding of what you are investing in and what you get in return. Let’s briefly look at the step one by one;
Mining
Formerly, gold extract from the earth deposits under high pressure of water. Nowadays, metallic ore mining is processed by several explosive techniques. One such standard method is placer that involves water plus gravity to separate the heavy metal from other impurities. A traditional way to extract gold is the open wells or underground channels to segregate gold from hard rocks. Once mined, metal needs to be removed from the rock. Here, metal passes through several steps of crushing, chemical leaching, and smelting of heavy metal. Thus, the gold obtains in the form of “slag” and moves towards the second processing step.
Refining Of Metals
Refining means removing the impurities from the metal obtained in the smelted form. Two principal ways of refining used internationally are electrolysis and pyrometallurgical chlorination. Without going into many technicalities, (which might get you bored), the refined metal goes for assessment by the experts in the laboratory. Once the metal is refined and tested for purity, it moves towards the third or last step of manufacturing the bullion.
Pressing Of Metals Into Bullions
Manufacturers or mint are required to have pure or expensive metal to press into bars through pressers. Liquid metal cast into bars goes to pressers, a machine that cuts and stamped the metal into pressed bars or coins. It pressed multiple times to gain the required thickness, then striped using a gauging mill. When blanks get punched from the strip, weighing and further testing are completed. Then, the polished blank is struck with a die to make a coin. Striking is done at high pressure to stamp the mirror image onto the coin’s surface. Finally, a clean, correctly designed, and inspected bar or metal bullion is ready to ship to the bullion dealers.
A Brief Overview About The Company Highland Mint
Highland Mint has shown a profound experience in creating a wide range of sports collectibles such as gold and silver coins, medals, and minted bars. The company also produces a limited edition of silver bullion items like coins and bars. In recent years, HM bullion has gained fantastic responses and reviews from collectors. One common thing you will notice in reviews for Highland Mint bullions is the top-notch quality and fast shipping service.
Licensing Of HM Bullion With Sports Leagues
Highland mint has a credential to provide services for; Major League Baseball, The National Hockey League, The National Basketball League, National Football League, and other numbers of leagues and collegiate. Currently, the company has extended its services to manufacturing the various designs of sports memorabilia pieces. The best thing about HM bullion or other minted products is that they all come up with an authentic certification and in a limited number.
The highland mint is known mainly for producing silver bullion sports collectibles as a popular released commodity. One such piece is the US, minted Morgan Silver Dollar from 1878 to 1904, in 1921.
Some Specialized Elements Claimed By Highland Mint In HM Bullion
Highland Mint has the stock tooling mechanism for HM Bullion to offer sizes ranging from 10mm to a maximum of 3.5 inches. They have a collection of presses having a range of 350 tons’ psi to 1600 psi approximately. Such a magnificent combination of stocking tools makes it a reality to go for any dimensional parameters required by the customers. Highland mint has a well-trained workforce plus all the needed tools to satisfy your expectations for premium-quality bullion. HM Bullion claims to have an inventory of precious and non-precious metals and is ready to complete your task on time.
Investing In Bullion Coins
There are some authentic legislative bodies to regulate the investment of bullion. According to the European Union specifications, 99.5% purity is considered legal for gold investment as bullion bars and 90% for bullion coins. The biggest bullion market we have internationally is the London Bullion Market, authorized by London Bullion Market Association (LMBA). What LMBA suggested is the minimum purity level of 99.5% for gold and 99.9% for silver bullions
The bullion coins minted from gold or silver are often bought from banks, coin or metal dealers, and brokerage firms. The bullion price swings typically subject to the gold and silver price in the market worldwide. Some of the renowned bullion coins available worldwide are the American Gold Eagle, South African Krugerrand, and Australian Gold Nugget. The United States Mint is producing precious metal bullion coins since 1986, which are of two types;
Proof Bullion Coins: Such minted coins are specifically designed for collectors and traded by the mint company in a shielding showcase.
Uncirculated Bullion Coins: These minted coins are intended only for investment and traded to selective buyers based on current market value (spot price) for the metal piece. It also includes the premium cost added up by the mint. If you go for the Minted coins of foreign countries, they are not really up to the US Standards and are not certified by the US government. Though, for qualitative analysis of foreign bullion coins, it depends mainly upon its melt value. It is the fundamental intrinsic bullion property when sold in melted form. The grading of the bullion coins is no longer relevant to assess the price value.
HM Bullion; Silver, A White Metal You Should Invest?
Just as everything comes with its pros and cons, investing in silver or gold, HM bullion has both advantages and disadvantages. It is just that what suits you as the investors might bring some losses to others. As soon as the silver price increases, many people opt for investment in silver metal to improve their investment portfolio. Likewise, to gold, silver, despite being volatile, seems an appropriate choice for those looking to preserve their wealth in a time of uncertainty.
Some Pros Of Investing In Silver Bullions
HM Bullion; The Safest And Tangible Asset For Investment Are Silver Metal
Silver is the most appealing white metal asset to offer protection in crisis. Other reserve assets like stocks, bonds, cash all are acceptable forms of reserve money. But they are still susceptible to economic devaluation because of the printable cash.
On the contrary, silver HM bullion is a kind of fixed tangible reserves. Even though fluctuation in the bullion market resulted in a slight decrement in silver value, bullion is not likely to crash down completely. If you think of our economic system, it has built on unmaintainable debit, and investing Bullion can take you out of an expected financial breakdown.
Silver Bullion Are Cheaper Than Gold Bullions
Among all the precious metal bullion, silver bullions are inexpensive and easily accessed by the customers. And guess what, silver bullions are more likely to be versatile than gold ones. Thus, silver bullion is more straightforward to break due to the decreased value. Think of a 100$ bill could be a test to break at the store; the same goes for the gold bullion. But silver bullions are more definite and adaptable than physical gold, thus attracts investors to make a deal with silver metal.
As a rough estimation, silver metal is worth almost 1/79th of the gold price. Thus logically, silver HM Bullion has much affordability, plus you will gain more profit whenever the price goes high. For the past years, silver and gold are known for their stability as legal tender. Investing in metal bullions gives you the reassurance that your money value is and will continue to flourish with time.
Silver Bullion Brings Secrecy In Investment
Moreover, investment in Silver HM bullion coins will offer you a sense of secrecy for expenses. Not everyone dares to display out their trading and transactions in public. It is another benefit when you move forward with the investment in bullion.
Some Cons Of Investing In Silver Bullion
Now, looking at the cons of investing in metal bullions, the problem of liquidity comes first. Just as you spend cash on your groceries, the same seems impossible with gold or silver bullions. So, you have to convert bullion into currency, and jewelry shops can play their role.
Vulnerability Of Robbery
Most importantly, we all know that keeping physical assets like gold bars or silver bullions at home puts you in danger of robbery. Or else, the bank will cost you some high additional charges to own a safe deposit box or locker. If someone can bear these extra charges, you are more than safe but a little vulnerability is always there when talking about tangible reserves.
High Price Of HM Silver Comes With High Premium
Last but not least, precious metal bullions come at the cost of a high premium, especially when buying physical metal bullion. What’s more is when the price goes up and up, the premium also goes high, making it a poor investment asset.
How Does The Investment Work With The Bullion?
Just as people own a property or some luxurious jewelry, the government and banks kept bullions as a reserve asset in the same way. That’s why people also refer to HM Bullion as legal tender when preserved by the bank or governmental investors. In actuality, Bullion acts as a hidden cushion when they get hit by the inflation wave. It is estimated that almost 20% of pure gold is an asset of central banks globally. Banks use this bullion asset to fuel their poor economy or to overcome international financial dues. In short, central banks offer their gold bullions to bullion banks with 1% proportionality to fund the economy.
The Role Of Bullion Banks In HM Bullion Investment
Bullion banks have a pivotal role in boosting the bullion market, which we have told you about before. Bullion banks are a mediator between financiers and debtors but they also played a vital role in assessing hedging scenarios, risk management, vaulting, and much more. These banks are considered a pillar of the London Bullion Market Association (LMBA). However, the irony is that LMBA is an over-the-counter marketplace that remains open 24 hours a day. Oct means that there is no centralized asset exchange. There is no transparency involved in any bullion trading. The bullion market is just a network of dealers based on trading without the help of the stock exchange.
How Investment In Bullion Occurs In The Bullion Market?
The bullion market looks like a very cover-crowded trading space, with many participants involved such, as the bullion banks, refiners, fabricators, and vaulting hands and traders, of course. They provide proficiency in refining, inspecting, melting, transporting, selling, and vaulting precious metal bullions. Moreover, investment parties and jewelry makers are also significant contributors to producing goods or offering services to consumers. The SPDR Gold Share, the world’s most giant gold exchange-traded fund, characterizes a gold spot price imitating mechanism. Though, stakeholders such as GLD are often regarded as unsafe traders, meaning the absence of vaulted gold bullion potentially. In short, bullion investors usually choose to buy Bullion over ETFs, owing to the minimum risk of third-party interference.
The bullion market comes with a massive trade volume as it has an enormous range of prices for bullion trading daily. As we mentioned earlier about the over-the-counter nature of the market, most bullion exchanges occur via phone or electronically. We have various global markets for bullion trading, while a few established ones are in New York, Zurich, London, and Tokyo.
The gold demand by the jewelers imposes a direct effect on HM bullion price. Another scenario that influences the bullion price is when investors heavily rely on gold during the economic crisis. Thus, the overall stability of the economy has an impact on the bullion price.
Investors often consider gold and silver as safe-tender assets exclusively in the time of crisis. But this safe status causes a hike in gold price owing to uncertain global circumstances such as war, political instability, and environmental disasters. When a country fears becoming a defaulter or economic crushing, it also increases the bullion demands. Bullion should be considered perfect for long-term investment. The sole possible counter-party risk involved is robbery or sudden government sequestration policies.
When the economy surpasses inflation, it will eat away your return on investment. For example, if you receive a bond of 4% and a price increase by 2%, you get a return of 2% on investment. Whenever price increases, supplies also increase in correspondence. Thus, precious metal bullions are a source to evade investment against price increases.
Some of the known bullion banks, member of the LMBA are;
- Bank of Montreal
- Standard Chartered Bank
- Royal Bank of Canada
- Morgan Stanley
- UBS Switzerland AG
- Bank of nova scotia (BNS)
How Bullion Banks Took Part In Bullion Trading?
The process of lending gold to bullion banks is straightforward. Let’s suppose; a central bank offers gold bullions to bullion banks for about three months, so the bank will obtain an equivalent amount of cash from the bullion bank. The central bank, in return, will offer this money back to the bullion market. In the market, they lend this money at a lease rate called Gold Forward Offered Rates (GOFO), issued by LMBA. Here the formula is higher the lease rate, the higher the incentive a central bank has to offer its gold assets. Subsequently, the gold the bullion banks borrowed allowed them to lend gold to mining industries or sell the gold.
On the contrary, bullion banks can sell the bullion on the spot market to receive transactional cash in return. In the bullion market, bullion or any other commodity is dealt with at the prevailing rate in the market. This rate will decrease down when the gold supply exceeds the demand. That’s why the bullion banks have this idea to plan the bullion exchange when the Bullion has a lower price at the market. Therefore, banks will receive their gold back at a cost less than the price it sold.
When the lending period concludes, the HM bullion banks bought back the gold to return it to the central bank. Bullion banks commonly lend gold to mining industries to fund their flagship projects. Otherwise, miners took part in the forward hedge contract where the gold needed to be mined had already been sold out to the buyer. In such a case, the mining industry lends gold from the bullion bank, especially when the buyers presume a physical gold delivery. As per the rule of a forward contract, the company sends these gold bullions to the buyers. Whenever they obtain enough mining yield, companies try to refund the gold lent by the bullion banks.
How Can An Individual Sell Or Buy Bullion?
Any individual can invest in HM Bullion as far as ready to bear a loss when there is fluctuation in the bullion price. Several methods allow us to invest in the bullion market, such as physical form, exchange-traded funds, and futures contracts.
Physical Form
When we said the term “physical form,” meaning you can own Bullion like coins, bars, or ingots. You can purchase these metal coins or bars from any trustworthy dealers to keep them in your home locker. Also, you can own a bank account allocated for bullion which is legally your asset. It means in bankruptcy, the banks have no authority over Bullion in allocated accounts, as banks owe no ownership over your gold bullions.
Exchange-Traded Funds (EFTs)
Investing in gold or silver HM bullion through exchange-traded funds can make you enter the bullion market. ETFs are a pool of securities to trail down the primary index. You will not own a physical Bullion but only the gold or silver certificates through ETFs. Although it offers good exchange with physical bullions or cash corresponding to the certificate from the bullion bank. You can invest in EFTs using a standard brokerage account. All in all, ETFs provide you the ease of investment in the bullion market rather than owning gold or silver physical pieces.
Future Contracts:
As the third method, there is a bullion future contract where investors can invest to own Bullion. It means you have the option to buy or sell your reserves at a fixed price as per the contract going to be set in the future at a specific date. If you are a seller, you are committed to providing the gold bullion to the buyer at the contract specified date. Conversely, if the buyer withdraws from the contract, it allows you to pass out the agreement before the expiry or might change into the new one.
What To Look For When Investing In Bullion?
But before you decide on investing in HM bullion, it would be wise of you to research thoroughly about the mint. Or else, there are some severe consequences of being ignorant to actual regulations or policies related to bullion trading. Here, we highlighted some of the factors to consider when you found your interest in investment in HM bullion.
Assess The Quality Of Bullion Through Melt Value
So before picking out any dealer to buy bullion coins, make sure to check out the quality of the bullion coin. First, you need to check for bullions coin’s melt value and it is relatively available all over the internet. For convenience, you can consult any reliable finance expert before any investment.
Compare The Prices Of Bullions To Gain Profit Over Investment
Another point to remember is that don’t restrict yourself to only HM bullion dealers. Instead, look for the owner who offers the best markup over investment. Do your research, wondering how? Name the coin on search engines to compare prices offered by different dealers. Always go for Bullion’s assessment via a third party rather than relying on the seller’s assessment which sounds biased.
Remember The Supplementary Cost In Bullions Investment
Don’t forget that there are some additional costs supplementary to your primary investment. Like, you might need insurance or rent outsourced storage to reserve your HM bullion asset. Now, all these costs will narrow down your potential investment in Bullion.
Always Be Prepared For The Risk Factor
Be aware of being fooled by the apparent metallic look of some cheap metalware. When buying a HM bullion coin, do ask for the delivery as an unsecured exchange might result in a low-quality metal piece. The companies who claim to have “minimum risk” on investment are nothing but just a delusional strategy to trap you in poor bullion investment. It doesn’t matter how great the investment you predict; there is always a risk factor. Find it as a clue if the company forces you to confirm the investment immediately without giving you time to reciprocate the consequences.
Check Out The Reviews For The Bullion Dealers
It would be best to take your full time to evaluate the commodity but the company that is selling it. You can check out the reviews related to the company and if possible, look for the company” profile under the local consumer protection agency. It will give you an idea about the reputation of the seller group. However, these double-checks can only make you secure to keep from fraud but do not claim a fool-proof investment. Ask your seller to provide any certification for the authenticity of the bullion metals.
Conclusion
This article has gathered every tiny detail that will surely help you plan your investment in HM bullion. We still recommend you look for all the best and worst scenarios when going for investment. One cannot afford to waste their hard-earned cash in making experimental investments. Bullions are something whose value will remain persistent whether you believe it or not. Therefore, we hope to convince you to invest in this billion-dollar market of bullion for your better financial security. Happy reading!
