Bullion is physical precious metal - typically gold, silver, and platinum - in tradable form like coins, rounds or bars. (It’s not to be confused with Bouillon seasoning which is a concentrated flavor enhancer). With gold and silver at record highs, people are increasingly looking for precious metal that they can monetize. Key things for appraisers to consider include the variable market for precious metals and the weight and fineness of the bullion.
An appraisal of bullion might be required by an insurance company to issue or renew a policy. It might be required because of federal or state laws for government purposes related to estate and gift tax, or perhaps a qualified appraisal by a qualified appraiser is necessary for documenting a charitable gift.
Bullion values change based on trading in global markets in London, New York, and elsewhere: some major market is always open and the unit of measurement is troy ounces.
Something that can be confusing is that a troy ounce is a unit of measurement for precious metals and a troy ounce is 1.09714 standard ounces. As an example, a 1907 to 1933 Saint-Gaudens gold $20 double eagle contains .9675 troy ounces of gold since the coin itself is 90% gold and 10% copper. The copper was added to make the gold coin more durable to stand up to the rigors of circulation since gold is a soft metal. The total weight is 33.436 grams, but the gold content is less than one troy ounce. Common dates trade at their bullion value.
Typically gold bars are 1 ounce, though they can be in fractions and multiples of an ounce, while silver bars can regularly weigh as much as 100 ounces.
Rounds enjoy no face value - you can’t spend them - and they aren’t minted as legal tender, as opposed to coins that carry a denomination and serve as a medium of exchange.
Typically rounds and bars will carry the weight and fineness on their surfaces in a way that is easy to read and understand, like: 1 ounce fine .9999 gold.
Three important points to consider when appraising bullion include the following.
An appraiser needs to consider the per-ounce “spot” price of the metal as of the valuation date. For example, if an appraiser is preparing an appraisal for the intended use of a charitable coin donation, the valuation date would be the date of the donation; for determining estate tax liability the date would be the date of death.
Determining the spot price is easy with sites like Kitco that provide current and historical pricing. An appraiser should cite the source of the spot metal price and the market price that they are relying upon: for example, the London PM Fix Price, which is a global, daily set price for precious metals issued by the London Bullion Market Association (LBMA) and its member banks.
Typically when considering the bullion value of an item, one has to consider the form that the metal is in. For a 100-ounce bar of silver, a name brand like Engelhard will have a slightly higher value than a less well-known brand and damage on the bar like test cuts - where someone cuts into the bar to test the purity - can negatively impact the value.
A 1-ounce silver coin issued by a government like an American Eagle silver bullion coin from the U.S. Mint or a Canadian Maple Leaf by the Royal Canadian Mint will have more value than an unmonetized round by a private mint. Going to a website like APMEX that focuses on precious metals can help an appraiser understand the relative premiums for different forms of physical bullion.
Bullion is in an easy to value and transport form, so things like appraising silverware and Sterling silver tea services, or gold rings aren’t considered bullion. The key component in bullion is that it is presented in a recognized form for long-term holding by investors in a regularly expected format: coins, rounds or bars. If a coin has numismatic or collector value beyond the intrinsic value, it’s generally not considered bullion.
Some oft-seen coins traded bullion are common date 90% silver dimes, quarter dollars and half dollars produced by the U.S. Mint up to 1964 which can be traded in $50 and $100 face value bags. These are traded at multiples to their face value and are considered bullion. Some U.S. gold coins produced by the U.S. Mint like Coronet gold $20 double eagles and Saint-Gaudens $20 double eagles that each contain .9675 troy ounces of gold are also considered bullion coins.
Bullion represents precious metals in their purest forms in a convenient package. Unlike numismatic coins that carry additional collector value, gold, silver and platinum bullion is valued based on its metal content and weight. A key thing for an appraiser to remember is the effective date of their appraisal report as it relates to bullion since precious metal prices are volatile. Insurance valuations will carry the date of the report typically, charitable donation and gift tax appraisals will use the value of the metal as of the date of the gift, and estate tax appraisals will consider the spot price as of the date of death.
