Bullion

Precious metals in bulk form are known as bullion, and are traded on commodity markets. Bullion metals may be cast into ingots, or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money.
Many nations mint bullion coins, of which the most famous is probably the gold South African Krugerrand. Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion. For instance, the United States mints a gold bullion coin (the Gold Eagle) at a face value of $50 containing 1 troy ounce (31.1035 g) of gold — as of January 2006, this coin is worth about $550 as bullion. Bullion coins' minting by national governments gives them some numismatic value in addition to their bullion value, as well as certifying their purity. The level of purity varies from country to country, with some bullion coins of as pure as 99.99% available (the Canadian Gold Maple Leaf coin meets this standard). Note that a 100% pure bullion is not possible, as absolute purity in extracted and refined metals can only be asymptotically approached.

One of the largest bullion coins in the world is a 10,000 dollar coin minted in Australia which consists of a full kilogram of 99.9% pure gold; however China has produced coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold.

Gold as an investment and silver as an investment are often seen as a hedge against both inflation and economic downturn. Silver bullion coins have become popular with coin collectors due to their relative affordability, and unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectables, far higher than their actual bullion value.
A given metal is precious if it is rare. If mining or refining processes improve, or new supplies are discovered and exploited, the value of such a metal declines.

An interesting case of a precious metal going common is that of aluminum. Aluminum was, when it was first discovered, extremely difficult to separate from the ore it was part of and, since the whole of the Earth's aluminum was bound up in the form of compounds, the most difficult metal on earth to get, despite the fact that it is one of the planet's most common.

For a while, aluminum was more valuable than gold; bars of aluminum were exhibited alongside the French crown jewels at the Exposition Universelle (1855). However, the price dropped continually and collapsed altogether when an easy extraction method, the Hall-Héroult process, was discovered in 1886.

The rarity of various metals may again be in for a shift, however. According to USGS statistics, at current production rates all the gold in the earth's crust will theoretically be processed within several decades. Meanwhile, silver is in a structural supply deficit, with 300 million troy ounces (9,000,000 kg) more being consumed each year than is mined--it may currently be more rare than gold.