Table of Contents
- What Is Bullion?
- How Do Banks Trade Bullion?
- What Is A Bullion Market?
- Ways You Can Purchase And Invest In Bullion
- HM Bullion: Highland Mint Silver Coins And Bars
- Why Should You Choose HM Bullion?
- HM Bullion: Custom Minting
- Some Featured HM Bullion Products
HM Bullion also known as The Highland Mint started its operations in Florida at the start of the 1980s and soon became one of the most respectable and also reputable mints in the United States. The Highland Mint is a privately owned and operated mint that is responsible for the minting of silver bullion rounds and gold bars made of pure .999 fine gold, silver, copper, platinum and palladium coins as well as other collectibles and sports memorabilia.
The production of these HM bullion silver coins and bars is held at their massive 40,000 square foot facility in Melbourne, Florida. Not only is the Highland Mint known for the HM bullion brand but also for the custom sports cards they offer. Since the Highland Mint is officially licensed by many different sports leagues across the United States, they also do specially made memorabilia from gold, silver, platinum and palladium to commemorate special events.
Before we get into the details about HM bullion, let’s look at the definition of what bullion is, how banks trade bullion and use bullion as collateral in the bullion market, then we’ll take a look what HM Bullion products the Highland Mint offers, and why you might decide to choose to buy HM bullion silver rounds vs coins and bars.
What Is Bullion?
Bullion is a word used for the physical form of gold, silver, platinum or palladium and sometime rhodium or in other words precious metals. The storage or shape these precious metals take, can be in the form of bars, ingots, coins, or other memorabilia.
HM bullion silver round and silver bars are pure precious metals with at least 99.5% or more purity levels. These are often used by the governments of the sovereign country’s central banks as a reserve to control the supply of money to hedge against the effects of inflation in that particular country.
You may have heard that a sovereign country’s central bank prints currency to float in the country. However, the currency of that country needs to be backed by value otherwise countries would print infinite amounts of money (money that is not backed) leading to the devaluation of that country’s currency and hyperinflation.
Previously, central banks would keep a reserve of gold bullion then print currency according to the reserves being maintained. However, recently, many countries have stopped this practice as bullion in the form of gold is in limited supply then instead started to hold the US dollars in their foreign reserves thus making the US dollar a fiat currency.
Nowadays private mint bullion products from brands like HM bullion are targeted towards private bullion investors who would like to invest their money in commodities like gold, silver, platinum and palladium to diversify their investment portfolio. Bullion trading can be done through different dealers across the world, however, these dealers need to be active in a gold and silver bullion market.
Bullion coins and bars are created by first mining the raw materials, in this case, gold, silver, platinum and palladium and other precious metals like rhodium. Let’s look at how gold bullion and silver bullion is processed and manufactured into the nice neat gold and silver rounds coins and bars you see at a private mint like HM Bullion.
On the periodic table, the symbol for gold as an element is AU which stands for Aurum. Pure gold ore needs to be mined by huge mining corporations with deep pocket and extracted from the Earth. The gold that is mined and extracted from deep within the earth is referred to as gold ore which is a mixture of pure gold and other minerals or rocks.
Gold ore can not be used as bullion yet. Although the gold in the ore is pure, it is mixed with other rocks thus reducing its overall purity. The gold is separated from the minerals using heat and different chemical processes. Once the rocks and minerals are separated from the gold ore, pure gold is left behind which is referred to as parted bullion. This is how gold bullion is created.
Is Bullion Considered Legal Tender?
So is bullion considered legal tender? The answer to this question is like your Facebook relationship status. “It’s complicated” The simple answer is technically no. With that said, the more complicated answer is kind of.
As we mentioned earlier, central banks keep bullion in their reserve to hedge against the effects of inflation. This is a pretty solid reason why some folks believe that bullion should be considered legal tender. Because gold bullion is the basis or foundation of all sovereign countries fiat currency systems, so in a way technically gold bullion should be considered legal tender.
The problem with this way of thinking comes into play in practical settings. Let’s say a private party tries to purchase something with gold that is not guaranteed by a reputable source like the US government.
An exaggerated situation that makes these issues more apparent would go something like this. “Hey can I buy your car with this gold I mined myself in my backyard gold mine? I promise it’s 999 fine gold! I refined it myself.” This is why it is important that bullion is only considered legal tender if it is backed by a government’s sovereign mint.
So bullion are not technically considered legal tender unless it’s backed by a sovereign mint like the US Mint, the Royal Mint or the Royal Canadian Mint. An interesting fact to note is that at least 20% or one-fifth of the gold bullion that has ever been mined in the history of the earth is held by the world’s central banks.
The gold bullion is used by these banks to pay off debts or stir economic activity in the country through the lending of gold. For central banks to raise money, gold bullion is lent by banks for a rate of 1% (average as this varies from country to country) to raise capital that can be used for executing projects across the nation and provide employment opportunities.
LBMA: A Pioneer In The Setting Of Standards in the Bullion Industry
In the financial markets or any market in general, some standards are in place to ensure fair and best practices are followed. In the case of bullion, LBMA or London Bullion Market Association is the first and leading organization that sets standards for the bullion markets across the globe to follow.
LBMA has over 150 firms that trade bullion globally. These firms include traders, refiners, storage service providers, and more. Established in 1987, LBMA was set to develop marketing services for the bullion markets to ensure transparency and trust among the traders, miners, and other sectors associated with the bullion markets.
The organization is responsible for ensuring how precious metals are mined, extracted, refined, and sold. These also include how these metals should be stored and transported. To do all this, the LBMA sets standards and procedures for firms to follow. It is not only a strong voice for all the stakeholders that make up the bullion market but also an intermediary between them and clients, investors, and regulators.
Bullion manufacturers like HM bullion are part of the LBMA association and those that are not registered with the standard-setting body are not considered legit as they do not follow the standards and practices set by this governing body. Some of the banks that are registered or members of the LBMA are Morgan Stanley, BNP Paribas, and Bank of Nova Scotia.
How Do Banks Trade Bullion?
There are bullion banks around the world that purchase and trade bullion. This is a great platform for central banks to lend their bullion for the sole purpose of raising capital. So, how does it work?
When central banks require cash, they go to bullion banks to strike a deal. A term period is decided by the central banks to lend bullion to the bullion bank accordingly. For this example, let’s use three months. Central banks lend gold to bullion banks for a period of three months in return for cash and a payable interest.
The money received by central banks is floated in the market or lent to other banks for a certain percentage. The higher the percentage, the more lucrative the borrowing from bullion banks becomes. However, if loans are lent by central banks lower than the rate offered by bullion banks, it becomes an unattractive proposition.
So what do bullion banks do with the gold they get from the central bank. Bullion banks can sell gold to mining companies or even lend it out to other organizations. So, they make money from central banks and on the same gold, they make additional interest by lending it out to others. This is how they make money.
Bullion banks sell gold for cash on the spot market. The spot market is a platform where transactions for commodities happen at the current market rate. So if the supply of gold increases, the market rate of gold reduces. During this time, the bullion banks can repurchase gold back at a lower rate thus profiting on the transaction.
However, this all depends on the loan period. If the bullion is lent in the market for 3 months and the price of gold starts to rise in the final month of the loan, then it can be a disadvantage for the bullion bank.
Once the loan period is complete, whatever the price of gold is at the time, bullion banks need to repurchase those gold bullions so that they can return them to the central banks.
If a mining company has a forward hedge contract and they don’t have the gold to back it up then they have to borrow gold from the bullion market. This is usually done when the other party requires a physical quantity of gold for the contract and so the mining company is left with no other option but to borrow gold to carry out the contract. The best thing about lending gold to mining companies is that bullion banks can always get repayment in the form of gold later on in the future.
What Is A Bullion Market?
As mentioned before, the bullion market is a place where commodities are traded and are over-the-counter precious metals markets. These types of markets are open for 24 hours, round the clock. Transactions held in bullion markets are conducted either via a phone or through the internet. You can find bullion markets across the globe like London, Tokyo, and more. Thousands of transactions take place daily in a bullion market as they are the go-to place for commodity dealings.
So how does the market determine the value of gold? Simple economics states that the forces of demand and supply determine the equilibrium price. What does this all mean?
When companies that require gold such as those that make electronic chips and jewelry and other products need to ramp up their production, this can cause an increase in the demand for gold. If the supply of gold (mining companies) does not increase as compared to the increase in the demand for gold, the price of gold shoots up.
This is the same when the supply of gold falls. This can happen when mining companies join forces and decide to go on a strike. In such cases, the supply of gold dips, and the price of gold shoots up. However, if mining companies start increasing their mining capacity thus increasing supply, the price of gold will fall. An example of this can easily be seen when Russia and Saudi Arabia had a recent tussle in regards to the supply of oil.
However, this is not the only reason for fluctuations in the price of gold. The country’s economy also plays a huge role in the price of gold. If a country’s economy is facing a downturn and there is uncertainty, in situations like this, people put their confidence in gold, therefore, increasing the demand for gold and pushing its price upwards.
The price of gold bullion is influenced by demand from companies that use gold to make jewelry and other products. The price is also impacted by perceptions of the overall economy. For example, gold becomes more popular as an investment during times of economic instability.
Gold and silver are those commodities that have been considered safe investments. These commodities see an upward trend in their prices in situations where the country is facing terrorist activities or any other sort of instability. Country defaulting and the collapse of financial institutions do not impact the price of gold negatively and this is why gold as a commodity is considered to be a safe investment.
Ways You Can Purchase And Invest In Bullion
There are several ways you can invest in bullion (some of these apply to HM bullion as well). Before you purchase bullion, it is important to know that the price of bullion fluctuates and therefore there is a possibility of profits or risk for loss. Investments can be made in bullion in the form of a physical asset (applicable to HM bullion which we will later discuss), exchange-traded funds, and futures contracts.
999 fine pure gold and silver can take the form of bullion coins rounds or bars produced at private mints like HM bullion can be purchased in the physical form either in the form of the commodity itself or in the paper form. There are banks and other investment companies that offer the storage of these commodities for a fee and investors have accounts at these institutions to store their commodities here.
Some banks offer the service of holding bullion for their customers upon their purchase. This is a great investment as the investor has control over the physical bullion and can claim that they rightfully own it. Since the bullion is owned by the client, if a bank were to go bankrupt, creditors can not claim it.
Another way to have access to the bullion market is to invest in commodities (gold or silver) via ETFs or exchange-traded funds. ETFs are a pool of funds just like mutual funds and gold or silver ETFs deals in certificates. This means that there is no physical gold but certificates of it to prove ownership. However, investors can take this certificate to a bullion bank and cash out in gold or cash.
ETFs work was similar to how investors would buy equities. Investors simply invest in ETFs and own a certain amount of that gold or silver the fund invests in. Instead of owning physical copies of gold, the best alternative to that is having an ETF account. Not only do you get rid of the hassle associated with owning physical gold such as storing it, but ETFs also have very low fees making it an attractive opportunity for investors.
A futures contract is a way to buy or sell items at a predetermined rate in the future at a specified date. Investors can agree to a particular rate for bullion in the future at a specified date, however, they will only receive their bullion at the time of contract expiration. In this case, they do not own any physical copies or have a paper contract for gold.
However, if they wish to move on to other investments and get rid of their futures contracts, investors can simply sell these contracts to other buyers. But the terms for that are the contract needs to be passed on before its expiration date.
Future contracts are out of reach for small investors as they may reach six-digit values or more. Future contracts can easily cost a hundred thousand dollars and for this reason, brokers provide loans to investors. Background checks are done on the investor to determine their creditworthiness before issuing the loan.
Since future contracts deal in large volumes, these can prove to be highly profitable. However, the opposite is also true because if there is a drop in the price of gold or silver, you will tend to lose a lot of money. This is why future contracts are left to experienced investors only.
HM Bullion: Highland Mint Silver Coins And Bars
Now that you have understood the basics of bullion, let’s take a closer look at HM bullion or Highland Mint silver coins and bars. Highland Mint markets its products to patriotic Americans and collectors who wish to own unique silver pieces. These are less costly than gold coins and bars but hold the same amount of stability that gold offers.
History Of Highland Mint: The Start Of HM Bullion
Established in the early 1980s, Highland Mint (HM) is one of the largest and private mints in America. Based in Melbourne, Florida, HM deals with HM gold bullion, HM silver bullion, and also HM bronze bullion. The company deals with the sculpting, extraction, processing, and selling of precious metal bars and coins.
HM Bullion Licenses
The Highland Mint is one of the few private mints that holds licenses to major sports leagues, associations, league players, and more. It has partnered up with other licensed companies to produce some of the best memorabilia for the fans. These memorabilia are also referred to as collectibles and hold a lot of value as they are made from precious metals. Many consider these collectibles as investments.
The company had started with the production of mint cards from precious metals however, over the years the company has seen a rapid expansion whereby now they also offer collectibles including mint-coins, photo-mints, and more. They have also gone the extra length to differentiate between other mint coins by bringing in different design elements.
These add value to the coins and make them a work of art. The rarer these get, the higher the price. The best thing about HM bullion is that all the products are numbered and they come with an authenticity certificate proving the product’s authenticity.
HM Bullion Quality
Since the brand is considered to be one of the best private mints, HM bullion stands up to that reputation with its sheer superb quality and finest craftsmanship. The designs on all HM bullion rounds coins and bars are made by hand and expertly sculpted carefully into plaster before they are transformed into a die. A blank HM bullion medallion or planchet then goes through several finishing processes resulting in the perfect HM silver coin or bars.
Why Should You Choose HM Bullion?
The question raised here is why should one buy HM bullion silver rounds and bars rather than many others available on the market. And the answer is simple, why should you go for any other brand than the biggest private mint in the States and that is HM bullion. However, with that being said, there are other reasons why we believe you should go for HM bullion instead of others available on the market.
Made In America
The first reason why many prefer HM bullion over its competitors is that all the process and production of HM bullion is done in America. The raw materials are extracted from American mines and processed on American soil with the result of either HM bullion or coins or bars. Highland Mint is as American as it can get and that is one of the main reasons why you as an American should support or buy HM bullion. Investing in your own country’s resources is also one of the ways to boost your economy.
Having or owning a gold or silver coin is not as exciting as having your favorite sports team on the coin. This is one of the reasons why fans from all over the country buy or invest in HM bullion because Highland Mint is officially licensed for major leagues, super bowls, and other sporting events. These not only add a certain style and design to an investor’s coin collection but also a lot of value as these can become collector items over time.
The worst part of purchasing online is when you buy an item worth $10 and have to pay shipping charges of $5 and upwards. This can put you off from purchasing. Not everyone buys HM bullion for the sake of investment but fans buy these coins to support their favorite teams too. For an investor, the shipping fee is not a huge deal breaker but for fans around the country wishing to buy a single coin, it can be a deal-breaker.
Now you can purchase HM bullion coins from Highland Mint and get free shipping on your purchase. However, the free shipping is on orders above $50 and is only limited to the United States. Fans across the globe would need to pay shipping charges if they were to purchase HM bullion.
Many people refrain from making payments online due to the concern of their bank details being misused. However, Highland Mint is a highly reputable and safe site and therefore any concerns regarding the safety of payments should be put aside. The website has an updated security certificate and has added layers of safety when it comes to secure payments. Investors and buyers can pay for their purchases by using their credit card or PayPal.
Exceptional Customer Service
Customer service is a deciding factor for many buyers and investors. Highland Mint has great customer service and those looking to get in contact with them to have their queries or concerns solved, can simply call their dedicated landline number or fill out their contact form on their website.
HM Bullion: Custom Minting
Highland Mint provides custom minting services for its clients. This is all possible due to the 40,000 square foot building that caters to every single process needed to create HM bullion or coins and bars. The facility not only caters to the production of coins and bars but also offers packaging and shipment services making it a one-stop solution for its clients. This is one of the reasons why many major leagues and sports teams sign up with HM bullion for their custom mint coins.
Coins can be made according to the client’s needs such as different heights of relief. This does result in the thickness of the material needed, the capacity of the equipment to ensure that the coin moves to a particular height, and great tonnage. HM bullion has become an expert in crafting custom-made coins and therefore has all the equipment needed to create any sized coins. This type of flexibility can not be seen in any other facility across the states.
HM facilities have different coining presses that allow the company to press coins at high speed from 500 coins a minute to manual machines that ensure superb quality, fine finish, and caters to the custom needs of the client. If a perfect finish is required, the coin pressing machines reduce their outputs automatically ensuring a perfect finish every time.
This does however increase the cost of the coin as a lot of time is not invested into creating the coin. Therefore the value of the coin also increases making it valuable. The facility also provides different types of finishes such as lacquer, brush, and more to ensure quality but most importantly different variations.
Clients can simply head over to their tool and die shop where they will be greeted by a skilled craftsman and loads of equipment to get the job done. The best part about working with HM is that they have loads of non-precious metal inventory allowing them to have the capacity to cater to your every need.
There are packaging options available at the tool and die shop if you’re looking to secure your coins and bars or simply give them away as a gift to a loved one. But if you don’t require any packaging, you can simply take your coin home in a soft pouch for a small fee.
Some Featured HM Bullion Products
Now that you know some of the products you can acquire at HM bullion and what bullion are, let’s look at some of the featured products that you can purchase from Highland Mint.
Baylor 2021 Basketball Champion
Officially licensed by the National Collegiate Athletic Association, the Baylor 2021 spans over 12 by 20 inches in a frame that can easily be hung on your wall. It is a limited edition coin with only 5,000 of these made to date and as always it is made in the United States. The Baylor 2021 can be purchased for $59.99 and those purchasing it are entitled to free delivery.
Shohei Ohtani Double Trouble
The Shohei Ohtani Double Trouble is made from bronze and will set you back a hundred dollars. Officially licensed by Major League Baseball Association, the Shohei Ohtani has measurements of 13 by 16 inches with a glass front panel. It comes with an action photo of the baseball legend Shohei Ohtani himself. The 39mm minted bronze coin is the highlight of this entire frame and comes with a numbered certificate that can be seen inside the frame.
Tom Brady Super Bowl Coins
Another fantastic purchase for all the American football fans, Tom Brady Super Bowl is a frame that comes with a bronze coin. Officially licensed by the National Football League, this hundred-dollar bronze coin comes in a 13 by 16-inch frame while the coin itself spans over 39mm. Only 5,000 units of these were produced and you will find a numbered certificate to prove its authenticity.
HM bullion is a great investment for investors and fans alike as these coins are considered to be collectibles. This drives up the price of the coins over time although that is not the only factor that leads to the increase in the price of HM bullion. You can find HM bullion for Major League Baseball and Basketball, National Football League, National Hockey League, National Basketball Association, Collegiate, Military, and Space.
Commemorative coins and bars are launched to commemorate certain events in the world, for example, the perseverance rover coin was introduced into the market when the perseverance rover made it to mars. If you’re buying any silver coins or bars, make sure that they are properly protected and kept in a safe place. You never know which coin’s value might shoot up in the future, hence it is always better to consider them a long-term investment or a purchase to satisfy a fan’s craving and support.