Gold Vs Bullion; The Difference Explained

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oi-Sunil Fernandes

By Sunil Fernandes

Published: Monday, August 1, 2016, 8:47 [IST]

Traders, commodities and experts often talk of gold rates in the bullion market. However, the two terms "gold" and "bullion" are very different from each other.

One is very exclusive, while the other term is more inclusive.

Gold And bullion: Understanding The Difference

Gold would include various forms of gold like coins, bars and other forms of the metal. When you talk of bullion, it also includes other precious metals like silver and platinum.

So, when we say trading in the commodity market, it would also include other precious metals. Bullion is a pretty vague and general term that is used for a whole lot of commodities. It can comes in coins, ingots and bars.

Check gold rates in India here

More specifically these terms are largely used in the commodities market. Another difference between gold and bullion, is that you always say gold was traded in the bullion market. So, it is just a part of the overall bullion market. Having said that we must admit that it is the most important part of the bullion market given that silver and platinum are not as heavily traded as gold.

Trade in bullion

Trading in bullion always takes place in the physical market. So, you never talk of the bullion market in the futures market. However, for gold you talk of the futures market as well as the bullion market. So bullion market is where you trade in physical quantities. What this would also mean is that gold is traded in physical quantities like gold bars and gold coins.

Should you trade in gold futures or the bullion market?

Since there is a big difference between gold traded in the bullion market and the futures market the big question is: where should you trade. The answer is that the futures market is better, because you do not have to worry about physical storage. There is also no worry of theft.

Differences between gold and gold etfs

The bullion market is very large in India compared to the gold market, though gold has a dominant share. Estimates are that the size of the bullion Industry in India is a staggering $25 billion It also employs close to 0.80 million, making it a very significant portion of the overall market.

In London, there is the London Bullion Market Association that represents the bullion market there. It decides on the refining processes and the good manufacturing processes to be adopted in that country.

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