The art and business of turning gold into gold bullion has been around for thousands of years. The pure examples of the precious metal we value today were just as important to the ancient world. Here is a quick overview of gold bullion and its place in the world's history:
What Is Gold Bullion?
Gold bullion is pure or nearly pure gold that has been shaped for easier storage and trading. One of the most common forms of gold bullion is the gold bar, but you may also find it in ingots or coins.
The word 'bullion' comes from the Old French word 'boillir,' which means 'to boil.'  This refers to the process of making the gold bar or coin. The raw material that contains gold is heated until the gold is melted and can be removed from the non-gold material. This helps producers of gold bullion create nearly pure bars and coins free of detritus.
Gold bullion is most popularly available in two forms to private investors: government-produced gold coins and gold bars. Regardless of the form, bullion gives investors, corporations, and governments an easier, tangible asset that helps them build and diversify their investment portfolios.
When and Where Did Gold Bullion Start?
People have been producing gold bullion for millennia. The oldest-known instance of gold bullion coin mintage is from the 5th or 6th century B.C. in China.  However, gold has been valued around the world for thousands of years, and it has been offered in bar and coin form for much of that time.
A modern example of government-produced gold bullion coins is the South African Krugerrand. The Krugerrand is arguably the reason official gold bullion coins have become so popular among investors and collectors. It was first minted in 1967 and offered to private investors as a way to boost interest in South Africa's gold mining industry.
To Where Did It Expand?
After the Krugerrand, many other modern countries began producing their own version of the bullion coin to offer to investors. Here are some other examples of government-minted gold bullion coins:
- The United Kingdom's Sovereign, first minted in 1887
- Mexico's Centenario, first minted in 1921
- Canada's Maple Leaf, first minted in 1979
- Iran's Emami, first minted in 1980
- China's Gold Panda, first minted in 1982
- The United States Gold Eagle, first minted in 1986
These a just a few of dozens of countries that have official versions of the gold bullion coin. Bullion bars are still in production as well, though they're generally made and sold by companies rather than governments. In 2019, 19.99% of the world's gold was used for gold bullion bars and coins. 
How Has the Favorability of Gold Bullion Evolved Over Time?
The favorability of gold bullion has shown no signs of slowing since the advent of the Krugerrand. Bullion coins and bars are highly portable ways of investing in real gold, which makes them particularly attractive to investors and governments.
Even prior to the Krugerrand, this precious metal has been sought after for its intrinsic value since before recorded history. Modern bullion is simply one of the latest ways to partake in the collection and trading of gold.
What Factors Sustain Gold Bullion's Performance?
There are many factors that sustain gold bullion's performance. Since bullion is simply gold, coins' and bars' values are reflected in the price of all gold. Here are a few factors that sustain gold and gold bullion performances:
- Demand. As the demand for gold rises, so does its value. About 48% of the world's gold is used for jewelry, 7.5% for technology, and nearly 30% for investments. As countries modernize and the call for gold increases, the value of bullion follows suit. This is in part due to the gold industry's inability to supply as much as the world demands.
- Weak economies. There is often an inverse relationship between a country's economy and the value of gold. Factors such as low values of U.S. currency, high unemployment rates, low GDP growth rates and more shake investors' faiths in the economy, which leads to more bullion investments.
- Trading. Like stock trading, many investors will sell their gold bullion when prices are high and buy when they're low. As more bullion owners sell their stock, the demand for bullion decreases, which lowers the price of gold.
- Gold mining. If gold miners suddenly produce less than they previously did, it can cause the prices of gold to rise. This can happen for any number of reasons, from political turmoil and nationwide lockdowns to mines simply running dry. As mines' abilities to supply decreases, demand increases, driving up the value of gold.
These are just a few factors that drive the performance of gold bullion. Arguably, the common theme here is security. As investors feel more secure, gold prices drop. The less financially secure people feel, the higher the value of gold rises.
People purchase gold bullion for many reasons. Gold bars and coins are tangible investments that can protect buyers from economic fallout. For example, stocks can go away and the value of the dollar can crash, but gold bullion will remain. In the long term, the price of gold has risen substantially. In 1973, the value of gold was less than 200 U.S. dollars per ounce. In 2020, the price of gold rose past $2,000 per ounce. 
Investing in gold bullion is a practice that has been around for thousands of years in one form or another. If you're thinking about investing in gold bullion, it's important that you acquaint yourself with its history and how it works before you dive in.
1. Merriam-Webster. 'Bouillon,' https://www.merriam-webster.com/dictionary/bouillon#etymology. Accessed Sept. 10, 2020.
2. Oldest.org. '7 Oldest Coins that Ever Existed,' https://www.oldest.org/culture/coins/. Accessed Sept. 10, 2020.
3. HowMuch.net. 'Visualizing the World's Gold Demand,' https://howmuch.net/articles/global-gold-demand-2019. Accessed Sept. 10, 2020.
4. GoldPrice.org. 'Gold Price History,' https://goldprice.org/gold-price-history.html. Accessed Sept. 10, 2020.