Many investors are confused with the terms used in the bullion industry, and with so many different types of bullion, and so many different terms being thrown around, it’s not surprising. So, just what do some of these terms mean, and in particular, what is the difference between gold bullion and gold ingots?

Gold Bullion

Firstly, we should point out that the term “bullion” is used rather broadly. Bullion simply refers to precious metals created as an investment. So, a rare, collectible coin may be referred to by this term (although such coins are often known as “Proofs” or even “Numismatics”) and bars, rounds and other items all fall under this definition. It’s not just gold either, as all precious metals are defined as bullion when cast as bars or minted as coins.

Gold Ingots and Gold Bars

Technically, an ingot is a bar, and a bar is an ingot. These are two and the same, as they both refer to blocks of precious metals. However, they are used in different industries. You might see a bar of steel or another cheap metal referred to as an “ingot”, and this will then be used in a manufacturing process, or it may even be refined further or turned into something else.

A gold or silver ingot, however, will often be referred to as a bar and will be sold as it is. These are purer, more expensive, and they are ready to be sold, without requiring any further refining or manufacturing. Bars also tend to be marked with everything from the weight and the purity, to serial numbers, assay stamps and more, all of which serve to increase its value and/or to make it more appealing to investors.

So, now that we know the difference between bullion bars and ingots, let’s do something crazy and ask an interesting question: How many gold bullion bars do you need to be a billionaire?

How Much Does a Billion Dollars Get You?

Let’s assume that you’re a billionaire and you’re really into gold. You decide to invest a billion dollars in this precious metal and manage to get it for spot price. How much would you get in total? Well, the price of gold changes all of the time, but we can use these gold comparisons and some gold averages to arrive at an approximate figure of around 9 tons (the charts on the link are based on gold being $2,000 an ounce, which it has never been).

To help you visualize that, 9 tons of gold bars would fill the back of 2 pick-up trucks, probably with a few bars left over. Yet, it’s nearly a thousand times less than the amount of gold owned by the United States (if you quickly do the sums you’ll discover that they can pretty much wipe out the national debt by selling their stockpile), and about a hundred times less than the amount that China claim to own.

Basically, 9 tons is a vast quantity of gold, yet it doesn’t come close to the gold owned by some of the richest countries in the world. For some more perspective, there have been around 170,000 tons mined throughout the history of human civilization. And if you turned this gold into bars equaling 400 ounces each, and stacked them into a cube the width and depth of a standard two story house, then it would extend a good 4 or 5 times taller than that house.

Now, if that doesn’t make your handful of ounces seem insignificant, then nothing will.