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# Bullion Market Price Mechanism

## Definition

The market determination of gold and silver bullion prices based on supply and demand, which can differ from official mint prices when currency is degraded or when there are transportation costs and delays associated with coining. This mechanism reveals the true value of precious metals independent of nominal coin values.

## Source Chapter

Book IV, Chapter 6

## Context

Smith explains how market prices for bullion can differ from mint prices due to various factors including currency degradation, transportation costs, and delays. He uses this mechanism to demonstrate how market forces reveal the true value of precious metals regardless of official valuations.

## Economic Domain

Exchange

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