Gold Terminology

Commonly used terms and definitions in the Precious Metals Market

Alloy

A mixture of two or more metals. Metals such as silver, nickel, copper and zinc are frequently mixed with gold to improve its hardness and/or change its color.

Allocated Gold

Actual gold coins or bars which are specifically allocated to a particular investor. This presents a huge safety advantage over owning an electronic percentage of a huge bar with many other investors.

Assay

An analysis of a metal used to determine its purity. A series of assays can be run to determine the alloys in the metal as well.

Ag

The chemical symbol for silver with atomic number 47.

Ask

The price that a seller is willing to take in order to effect a sale.

Au

The chemical symbol for gold which is derived from “aurum”, the Latin word for gold.

Bag Marks

Minor abrasions on an otherwise uncirculated coin, caused by contact between coins in a mint bag.

Britannia Coin

The Britannia is the British one ounce gold or silver coin, first produced in 1987.

BU

Brilliant Uncirculated, used to describe a coin in new condition. The same pristine condition as when it left the mint.

Buffalo

Bull market

A market in which the primary trend is up.

Bullion

Precious metals in bulk form which are traded are known as bullion. Bullion can come in the form of bars or minted into coins.

Bullion coin

A coin with a symbolic face value whose market value is determined only by its inherent precious metal content.

Carat

See Karat

Certified Gold

A “certified” gold coin is encapsulated in a tamper-proof, sonically-sealed, high security hard plastic holder, with a unique certification number and bar-code permanently sealed inside each coin capsule for the protection of the investor.

Coin

A piece of metal intended for use as legal tender and stamped with marks or inscriptions which show that it was issued by an authority that guarantees its weight and purity most often a government or bank.

COMEX

The Commodity Exchange, Inc., in New York, where gold and silver, as well as other commodities, are traded on a daily basis.

Commodity

A useful physical asset whose value is based on its commercial use and scarcity.

Counterfeit

A reproduction of a coin by someone other than the government legally authorized to do so.

Deliverable Bar

A precious metal (gold and silver, for example) with a weight that is approved as a tradable unit on one or more of the commodity exchanges.

Device

A design found on a coin. Frequently it is the bust or profile of a person who symbolizes a particular country at a particular time in history or a country’s coat of arms or insignia.

Divisibility

How many individual elements a precious metals allocation consists of. It is deemed to have more divisibility to hold 10 × 1 ounce gold bars than 1 × 10 ounce bar.

Face Value

The legal monetary value stamped on a coin.

Field

The open area or background on a coin.

Fineness

The purity of a precious metal measured in 1,000 parts of an alloy: a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal.

Fine Weight

The metallic weight of a coin, ingot, or bar, as opposed to the item’s gross weight which includes the weight of the alloying metal.

Gold Eagle

Gold:Silver ratio

The amount of silver you can buy with the same money it costs to buy one ounce of gold at any given point in time based on their spot prices. So a ratio of 85 would mean that 1 ounce of gold would buy 85 ounces of silver.

Gold Standard

A monetary system based on convertibility into gold; paper money backed and interchangeable with gold.

Hallmark

Mark or marks which indicate the producer of a gold bar and its fineness or other characteristics.

Intrinsic Value

The value of a coin’s metal content.

Karat (also spelled carat)

From the Greek word “keration”, meaning carob bean, the term karat is now used to indicate the proportion of gold relative to other substances within a metallic material. One karat is equivalent to a fraction of one twenty-fourth. Gold purity can also be quoted in thousandths, with 24-Karat gold referring to around 999 thousandths. The typical gold bar will have a minimum of 23.88 Karats (or 995 thousandths), and the minimum gold content required to mint any marketable gold coin is 21.6 Karats, or 900 thousandths.

Krugerrand

Legal Tender

Currency in specified denominations which you could use as payment. Legal tender coins have a face value (ie Britannia £100) but the gold content is far more valuable than the amount written on it.

Lettered Edge

Intaglio lettering milled onto the edge of a coin before striking or raised lettering on the edge of a coin produced by the use of a segmented collar die at the time of striking.

Liquidity

The ease in which an asset can be turned into cash.

London Fix

Twice daily bidding sessions in London of five major gold firms, at which the price of gold is “fixed” or set.

Lustre

A shiny appearance on the surface of a coin, usually an uncirculated coin.

Maple Leaf

Market Value

The price at which a coin or bullion item trades.

Mintmark

The mintmark is a letter or symbol on a coin that identifies where that particular coin was produced.

Modern Issue

Coins struck for current issue, either for collectors, investors or circulation.

New York Close

Because of the time differences, the New York gold market continues to sell precious metals for several hours after the London market has closed for the business day. Its last price has this name, and it may be higher or lower than the London fix depending upon market fluctuations.

Nugget (or Kangaroo)

Numismatic Coins

Coins whose prices depend more on their rarity, condition, dates, and mint marks than on their gold content alone.

Numismatist

A collector and student of money, especially coins. Numismatic refers to coins of a more historical and collectible nature.

Obverse/Reverse

Obverse is the front of a coin, usually consisting of the image of one or more people. The reverse is the rear of the coin which often features a picture or design.

Paper Gold/Paper Silver

Ownership of gold or silver which isn’t tangible. Examples are Electronic Traded Funds (ETFs), mining shares, precious metals funds.

Philharmonic

Physical Gold/Physical Silver

Real gold and silver which can be touched and held. Common forms are bars, coins and jewellery.

Pooled Silver/Pooled Gold

An arrangement whereby the investor’s precious metals are held by a third party and mixed in with those of other investors. It is common practise for pooled accounts to actually contain less precious metals than it should.

Premium

The additional cost of a gold or silver coin or bullion over and above the spot gold/silver price, including the costs of fabrication, and distribution. Rare coins carry an additional premium called numismatic value which is based on scarcity, quality, demand and intangible factors.

Proof Gold

Each Proof coin is carefully inspected throughout the manufacturing process to make sure that only perfect specimens are issued. Proof coins are usually of limited issue, and often have employ different minting techniques to produce a highly polished mirror finish to the field (background) and a matt finish to the raised features.

Proof Set

A set of one proof coin of each current denomination issued by a mint for a specific year.

Raw Gold

Bullion coins that have not been certified or encapsulated.

Safe Haven Asset

A safe haven asset is where people typically invest in times of political turbulence or uncertainty. Gold is known as the ultimate safe haven.

Segregated Storage

Your gold/silver coins or bars are kept apart from other investor’s precious metals. Just as importantly the gold/silver does not fall onto the balance sheet of either the dealer or the storage facility. This means that in the event of either another investor, the dealer, or indeed the storage company itself going bankrupt, your precious metals are fully protected and cannot be touched by creditors.

Sovereign

The Sovereign is a British coin weighing 0.2354 oz and was first produced in 1489.

Uncirculated

A piece in new condition as issued by the mint. If it retains its original luster, it can be called Brilliant Uncirculated.

Troy ounce

The standard weight in which gold and silver are quoted in the international market, weighing 31.1035g.

Sterling Silver

A standard of silver defined by law as 925 parts pure silver per 1000 parts overall. Sterling silver is the principal standard in the UK and USA.

Spread

The difference between the bid and ask price (i.e. the price where we would buy or sell the gold/silver).

LEARN MORE HERE
The Definitive Gold Guide ebook

Our ebook, The Definitive Gold Guide, answers these questions and many others in much more detail. Get your guide today.

Get my guide

(800) 510-9594

Would you prefer to receive a free printed copy of The Definitive Gold Guide?  Don’t hesitate to give us a call.