GlossarySharpen your precious metals knowledge by learning the definitions of these commonly used terms.

A

American Eagles
Official bullion coins of the United States minted by the U.S. Mint. Available in gold, silver, or platinum.

Annealing
Heating of bullion coin blanks (planchets) to soften the metal for shaping and pressing.

Arbitrage
Simultaneous buying and selling of a commodity in different markets to take advantage of price differentials.

Assay
Assessment of the contents and quality of a gold or silver product. Items that have been assayed are guaranteed to contain the amount and purity of metal indicated.

Bag mark
Also known as a contact mark, a bag mark is a small ding or scratch on a coin from other coins. Depending on the type of coin, too many bag marks can be detrimental to the overall value of a coin.

Bar
Mass of metal cast or shaped into a convenient rectangular shape. In the precious metals industry, the words bar and ingot are used interchangeably.

Bear market
Market in which the primary trend is downwards.

Bi-metallic
Coin that consists of two metals bonded together.

Brilliant uncirculated
Coin that has not yet been in public circulation. These coins are in immaculate condition with virtually zero flaws.

Bullion
Gold, silver, platinum, and palladium that come in the form of bars, coins, or other ingots.

Bull market
Market in which the primary trend is upwards.

Bust
Image on a coin that portrays the head, neck, and shoulders of the person displayed on the coin.

Buy/Sell spreads
Precious metal trader’s posted prices for the amount they are purchasing or selling a metal. Typically relative to the spot price of that metal and often kept as low as possible.

C

Canadian Maple Leafs
Modern bullion coins minted by the Royal Canadian Mint.

Circulated
Coins that have been used as currency among the public. A circulated coin is usually in much worse condition than an uncirculated coin.

Clad coins
Coins that have an outer layer of metals that are not precious metals. Since 1965 all dimes, quarters, and half dollars in circulation have been clad coins.

Coin of the realm
Legal tender coin issued by a government, meant for general circulation.

COMEX
One of the world’s major commodities futures exchanges on which gold and silver are traded. The COMEX is centered in New York City and is a division of the New York Mercantile Exchange.

Commemorative coins
Special coins made to honor a person or event.

Commodity
Traded good which is bought and sold and has a value indicative of the supply and demand of that item as well as overall market conditions. Gold, silver, platinum, and palladium are all commodities.

Condition
Quality or overall state of a coin. Common terms are varied, new, brilliant uncirculated, and proof.

D

Derivative
Financial instrument derived from a cash market commodity, futures contract, or other financial instrument. Derivatives can be traded on regulated exchanges or over-the-counter. Futures contracts, for example, are derivatives of physical commodities, and options on futures are derivatives of futures contracts.

Designer
Artist who created a coin’s design. The designer creates the artwork for the coin but may not actually create the die used to strike the coin.

Die
Engraved metal that is used to stamp/impress blank planchets to create a coin.

Divisibility
How difficult or easy it is to divide a bullion piece.

Example: A 100-oz. silver bar would be much less divisible than 100 single 1-oz. silver coins.

Double Eagles
U.S. $20 gold coins used as legal tender from 1850-1933. Double Eagles contain .9675 oz. of gold and come in two designs: the St. Gaudens (Walking Liberty) and the Liberty.

Dovish
Describes monetary policy favoring lower interest rates to encourage economic growth, with minimal worry about inflation.

E

Edge
Outer side of a coin. May contain lettering or reeding (grooved lines).

F

Face value
Amount for which a coin can be spent. A quarter has a face value of 25 cents. Not the same as collectible value or precious metal value.

Fiat money
Paper money made legal tender by law, but not backed by gold or silver.

Fineness
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 another metal.

Example: The American Gold Eagle has a fineness of .9167, meaning it is 91.67% pure gold.

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.

Example: a 1-oz. Gold Eagle has a fine weight of one troy ounce but a gross weight of 1.0909 troy ounces.

G

Gold-Silver Ratio
Indicates how much silver can be purchased with one ounce of gold based on ongoing spot prices. If the gold-silver ratio is 55, one could purchase 55 ounces of silver for a single ounce of gold.

Grain
Earliest unit of weight for gold. One troy ounce contains 480 grains.

Gram
Basic unit of weight in the metric system. 31.1035 grams = one troy ounce

H

Hawkish
Describes monetary policy favoring higher interest rates to keep inflation in check.

I

Ingot
Mass of metal cast into a convenient shape. In the precious metals industry, the words ingot and bar are used interchangeably.

Inverted market
Situation in which prices for future deliveries are lower than the spot price. Also known as backwardation.

J

Junk silver
Typically any silver product that has less than 90% pure silver. Oftentimes jewelry will have lower amounts of silver in the 30-80% range.

K

Karat
Measure of the purity of a precious metal. 24-karat gold is “pure gold”.

Kilo bar
Bar weighing one kilogram (32.1507 troy ounces).

L

Legal tender
Coins which are recognized as valid currency.

Liquidity
How easy it is to buy or sell a specific product or type of metal. 1-oz. American Silver Eagles are very liquid due to an active population of buyers and sellers.

M

Melt value
Current market value of a coin or bar’s precious metal content. Also called intrinsic value or bullion value.

Mint
Facility where coins or bars are produced.

N

Numismatic coins
Coins whose prices depend more on their rarity, condition, dates, and mint marks than on their gold or silver content.

Numismatics
Study or collection of the physical aspect of currency. People who collect and study items such as coins, paper bills, and other forms of currency are called numismatists.

O

Obverse
Front side of a coin. Typically displays a head or face.

P

Paper precious metals
Forms of precious metals investing that do not allow for tangible (physical) bullion to be possessed, such as mining company stocks or ETFs.

Pennyweight
American unit of weight for gold in which one pennyweight equals 24 grains or 1/20 of a troy ounce.

Premium
Dollar amount or percentage a coin sells for over its melt value.

Proof
Coin that goes through a special striking process to give it a sharper, shinier look. Proof coins come with an additional premium and typically cost more than even brilliant uncirculated coins.

Purity
Amount or percentage of gold or silver that is contained within a certain piece.

R

Reverse
Back side of a coin – opposite of obverse. Typically displays the face value of the coin.

Rim
Raised edge of a coin. Intended to help protect the design or artwork of the coin.

S

Spot price
Live trading price of gold or silver. Typically indicated in $XX.XX per ounce.

Spread
Difference between the buying and selling price of a precious metal coin or other trading unit.

Symbolic face value
Nominal value given to legal tender coins sold for their metal content.

Example: the 1-oz. American Gold Eagle carries a $50 face value but sells for the value of its gold content plus a premium.