Sovereign vs. Private Bullion: What’s the Difference?
Learn all about the two types of precious metal bullion and why wise investors understand the unique benefits of each
Coin collectors and precious metals investors looking to buy gold or silver may run into the enduring debate over sovereign vs. private bullion. These two unique types of investment each have their advantages and disadvantages. Understanding which bullion option is able to fulfill your financial needs and goals best is imperative to making wise investments decisions.
Keep reading to learn about the differences between sovereign and private bullion…
One Investment Strategy, Two Schools of Thought
When it comes to purchasing precious metal bars and coins – be it gold, silver, platinum, or palladium – investors are given the option of choosing either sovereign or private bullion.
Sovereign or government-issue bullion is defined as “bullion minted by a government or for a government and denominated in local currency.” Government bullion is designated as legal tender coins and bars that have been minted by a country’s national mint; thus, its purity and value is “backed” by that nation’s government.
Some of the most popular government-issue silver coins from around the world include:
- American Silver Eagles (U.S. Mint)
- Chinese Silver Pandas (People’s Republic of China)
- Canadian Silver Maple Leafs (Royal Canadian Mint)
- Silver Britannia (Royal Mint of England)
- Austrian Philharmonic (Austrian Mint)
In contrast, private bullion refers to bars and/or rounds minted by a private company. Unlike sovereign bullion, private bullion is not backed by any government, which, for some investors, is preferable over government-issued bars and coins. Rounds are what we call private bullion made in the shape of a coin.
Despite being labeled “private”, this type is bullion is far from plain. If you need proof, check out these popular bullion series from Provident Metals’ own private mint:
Other private mints from around the world have produced beautiful precious metal bullion, as well. For instance, some of the most spectacular bullion has originated from the Johnson Matthey Mint in England, PAMP Suisse in Switzerland, and Heraeus Mint in Germany.
Benefits of Sovereign Bullion
For those who decide to invest in coins and bars minted by a government mint, there are numerous reasons why choosing to do so can be advantageous. For one, investors and collectors value the security of buying bullion that has been ensured and backed by a nation’s government. Investing in silver and gold that has received a “stamp of approval” by a government entity provides a sense of protection that justifies the extra cost to some investors.
Secondly, it is said that legal tender coins and bars are easier to sell down the road. In the actual event of an economic collapse, many argue that the average person will recognize sovereign coins over private coins from private mints. Seeing as their purity, weight and quality are backed by a country’s government, sovereign bullion buyers tend to feel more at ease and confident that the value of the coin they are buying can weather any future storm.
Despite the fact that sovereign bullion typically has higher premiums, investors sometimes prefer this option when planning for the worst-case scenario. For instance, even if the price of precious metals were to suddenly plummet, one would likely still be able to sell their government-minted coins to those who collect commemorative coins and thus earn a collector’s premium. So, if all else fails, collectors or investors may still be able to earn a premium on certain well-liked commemorative coins on top of the price over spot – especially for special release items like the Perth Lunar Series and Royal Canadian Mint Predator Series.
Visit the Provident Metals store to shop sovereign mint bullion.
Benefits of Private Bullion
While sovereign bars and coins offer investors a sense of security and profitability, the reasons for owning private bullion are not without merit. One major benefit of private bullion is that they typically cost less than government-issued bars and coins. Since most private bullion isn’t sold as a collectible series, buyers are spared from having to pay a collector’s premium. This higher wholesale value means investors can purchase a greater quantity of precious metals for their money.
Another benefit of private bullion is the very feature that some view as a weakness – it isn’t connected to any nation’s government. Some investors fear the possibility of governments trying to reclaim coins and bars purchased as bullion investments during an economic crisis. If this were to occur, investors who own a large amount of precious metal assets in the form of sovereign bullion could be in serious trouble. Owning private bullion minimizes this risk since the government would have no way to “find and seize” your investments.
Additionally, since they are not considered legal tender, private mint coins can either be melted down for its precious metal value or sold as is, depending on which option the seller prefers.
Lastly, generally speaking, private bullion is less in danger of being counterfeited than sovereign coins. Coin counterfeiters profit much more by copying legal tender coins than specialty private bullion. This knowledge gives some investors a “peace of mind.” Of course, collectors should still take proper precaution when buying private bullion and make sure they only do business with a reputable and trustworthy precious metal dealer, like Provident Metals.
Browse our secure online store to shop private mint coins and bars.
Conclusion – Which to Buy?
In an informal poll conducted by SilverSeek, a majority of silver investors surveyed favored government-backed silver over private bullion; however, most investors also buy from private mints at one time or another.
In short, the debate between sovereign and general bullion arises from two possible scenarios from the same theoretical future: When (not if) the U.S. dollar ultimately collapses, tangible assets like gold and silver will likely be the best stores of value in the absence of paper currency. Proponents of private bullion want to get their hands on as much of these precious metals as money can buy now while the prices of gold and silver are still relatively and historically cheap. However, investors of sovereign bullion question whether private rounds will be as readily accepted and highly-valued as government-issued coins and bars.
Ultimately, each investor must decide whether sovereign or private bullion aligns with their investment philosophy and strategy best. Here at Provident Metals we sell both government-issued and private mint bars, coins and rounds.
Regardless of where you stand on the sovereign vs. private issue, the important thing is that you start securing your financial future today by investing in gold and silver bullion. If you have any questions about our products and services, please feel free to contact us or look for a quick answer in our FAQ and Policies pages.