Precious metals glossary

Allocated storage

Vault storage where specific bars or coins are recorded as yours. The vault looks after them for you rather than owning them, so they shouldn't count as the vault's assets if it runs into trouble.

Ask

Also called Ask price, Offer

The price a dealer will sell a coin or bar to you for. It is usually the spot price plus a premium.

Assay

A test of a metal's purity and weight. Many bars come with an assay certificate or card from the refiner stating what they contain.

Bid

Also called Bid price

The price a dealer will pay to buy a coin or bar from you. It is normally below the ask, and the gap between the two is the spread.

Brilliant uncirculated

Also called BU

A bright, unworn finish used for bullion and commemorative coins made in large numbers. It's a step below proof in finish and isn't the same as a formal mint state grade.

Bullion

Precious metal valued mainly for its metal content, such as bars, rounds and many coins, usually at high purity. Its price follows the spot price plus a premium.

Bullion coin

A coin struck by a mint mainly as a way to own a set weight of metal, such as the American Eagle, Canadian Maple Leaf or South African Krugerrand. It carries a face value but trades on its metal content.

Business strike

A coin made for everyday circulation or general sale, as opposed to a specially made proof. Most mint state coins are business strikes.

Buyback price

What a dealer offers to pay when you sell back to them. Checking it before you buy shows how much the spread would cost you if you sold later.

CAC sticker

A small sticker from CAC (Certified Acceptance Corporation) on a PCGS or NGC slab, showing a second opinion that the coin is solid for its grade. Some collectors pay more for stickered coins, but it's an opinion, not a guarantee.

Cast bar

Also called Poured bar

A bar made by pouring molten metal into a mould, often with a rough, rippled surface. Cast bars tend to carry lower premiums than minted bars.

Circulated

A coin that shows wear from being handled or spent. On the Sheldon scale, circulated grades run from 1 to 58.

COMEX

A US futures exchange, part of CME Group, where gold, silver and other metals futures trade. Its prices are a major input to the spot prices quoted around the world.

Counterparty risk

The risk that someone you rely on, such as a vault, fund, dealer or bank, fails to do what they promised. Metal you hold yourself has none; paper products and unallocated accounts carry some.

ETF

Also called Exchange-traded fund

A fund that trades on a stock exchange like a share. A physically backed metal ETF holds bullion in vaults so you can follow the price without storing metal, but you own fund shares, not specific bars.

Eye appeal

How attractive a coin looks overall, including its lustre, colour, toning and marks. Two coins with the same grade can sell for different prices because of it.

Face value

Also called Denomination

The amount stamped on a coin, such as one dollar. On bullion coins it is far below what the metal is worth and mainly shows that the coin is legal tender.

Fineness

Also called Purity, Millesimal fineness

Purity of precious metal in parts per thousand. Gold marked 999.9 is 99.99% pure, and sterling silver is 925 fine.

Fractional bullion

Also called Fractional coins

Coins and bars smaller than one troy ounce, such as 1/10 oz gold coins. They are easier to sell in small amounts but usually carry a higher premium per ounce.

Futures contract

Also called Futures

An agreement to buy or sell a set amount of metal at a set price on a future date. Most are closed out for cash before delivery and are used by traders and producers to hedge or speculate.

Gold IRA

Also called Precious metals IRA, Self-directed IRA

A US individual retirement account that holds approved physical metal through a custodian and a depository instead of stocks or funds. The rules on which coins and bars qualify and where they're stored are strict, and fees are usually higher than for a standard IRA.

Gold-to-silver ratio

Also called Gold/silver ratio

How many ounces of silver one ounce of gold would buy at current prices. People use it to compare the two metals over time; it doesn't predict where either price goes next.

Good Delivery bar

A large bar that meets the LBMA's standards for weight, purity and refiner, so it can trade in the London wholesale market. Gold Good Delivery bars weigh roughly 400 troy ounces and silver bars roughly 1,000.

Hallmark

Marks stamped on a bar or piece of jewelry showing its purity, its maker and sometimes where it was tested. In some countries hallmarking is required by law for items sold as gold or silver.

Junk silver

Also called 90% silver, Constitutional silver

Worn US dimes, quarters and half dollars dated 1964 or earlier, which are 90% silver. They trade on their silver content rather than as collectibles.

Karat

Also called Carat (gold), kt

A measure of gold purity in 24ths, used mostly for jewelry. 24-karat is pure gold, 18-karat is 75% gold and 14-karat is about 58%.

Key date

A date and mint mark with a low mintage or few survivors, making it one of the scarcest and most valuable coins in a series. Key dates are also among the most often faked, so most trade in slabs.

Kilobar

Also called Kilo bar

A bar weighing one kilogram, about 32.15 troy ounces. Larger buyers like them because the premium per ounce is usually lower than for coins.

LBMA

Also called London Bullion Market Association

The London Bullion Market Association, the trade body for the London wholesale gold and silver market. It sets the Good Delivery standards and owns the daily LBMA Gold Price and LBMA Silver Price benchmarks.

Legal tender

Money a government says must be accepted to settle debts. Bullion coins from government mints are legal tender at their face value, even though nobody spends them at that value.

Liquidity

How quickly and cheaply you can sell something close to its fair value. Widely recognized bullion coins and bars are usually easy to sell; rare coins can take longer and depend on finding the right buyer.

Melt value

Also called Intrinsic value, Metal value

What the metal in a coin or bar is worth at the current spot price, based on its weight and purity. Any premium or collector value comes on top.

Mint mark

A small letter on a coin showing which mint made it, such as D for Denver or S for San Francisco on US coins. The same date can be common from one mint and scarce from another.

Mint state

Also called MS, Uncirculated

A coin with no wear from circulation, graded MS-60 to MS-70 on the Sheldon scale. Higher numbers mean fewer marks and better lustre and strike.

Mintage

The number of coins of a given type, date and mint mark that were made. A low mintage can make a coin scarce, though how many survived in good condition matters too.

Minted bar

Also called Struck bar

A bar cut and stamped from a sheet of metal, with sharp edges and a smooth finish, often sealed in an assay card. They usually cost a little more than cast bars of the same weight.

NGC

Also called Numismatic Guaranty Company

One of the two largest third-party coin grading services, alongside PCGS. It grades coins and seals them in slabs with a certification number you can look up online.

Numismatic

Also called Collectible coin, Rare coin

To do with coins as collectibles. A numismatic coin's price depends mainly on rarity, condition and collector demand rather than its metal content.

Obverse

Also called Heads

The front, or heads, side of a coin, usually carrying the main design such as a portrait.

Paper gold

Ways to follow the gold price without holding metal yourself, such as ETFs, futures and unallocated accounts. They can be cheaper and easier to trade but add counterparty risk.

PCGS

Also called Professional Coin Grading Service

Professional Coin Grading Service, one of the two largest third-party coin graders alongside NGC. It grades coins on the Sheldon scale and seals them in slabs with a certification number.

Population report

Also called Pop report, Census

A count, published by a grading service, of how many coins of each type and date it has graded at each grade. A low count at a high grade suggests scarcity, but the numbers grow as more coins are submitted.

Premium

Also called Markup

The amount you pay above a coin or bar's melt value, covering minting, distribution and the dealer's margin. Premiums vary with the product, its size and demand, and are usually lower on large bars than on small coins.

Proof

Also called PF, PR

A coin struck more than once with specially polished dies, giving mirror-like backgrounds and frosted designs. Proof describes how a coin was made, not its grade; proofs are graded PF or PR 60 to 70.

Refiner

Also called Refinery

A company that melts, purifies and casts metal into bars. Bars from well-known refiners, especially those on the LBMA Good Delivery list, are easier to resell.

Reverse

Also called Tails

The back, or tails, side of a coin.

Round

Also called Silver round

A coin-shaped piece of bullion made by a private mint. Unlike a coin it has no face value and isn't legal tender, and it usually carries a lower premium.

Segregated storage

A form of allocated storage where your metal is kept physically apart from everyone else's, so you get back the exact items you deposited.

Semi-numismatic

A coin worth somewhat more than its metal because of collector interest, such as older gold coins or graded modern bullion. Its price follows metal prices plus a collector premium that can grow or shrink.

Sheldon scale

Also called Coin grading scale

The 1 to 70 scale used to grade a coin's condition, where 1 is barely identifiable and 70 is flawless under magnification. Numbers are paired with letters such as VF, EF and MS.

Slab

Also called Certified holder

The sealed, tamper-evident plastic holder a grading service puts a coin in, with a label showing the coin, its grade and a certification number.

Sovereign mint

Also called Government mint

A government-owned mint, such as the US Mint, Royal Canadian Mint, Royal Mint or Perth Mint, that issues legal tender coins. Their bullion coins are widely recognized, which helps when you sell.

Spot price

Also called Spot

The current market price for one troy ounce of a metal for immediate delivery, set by wholesale trading. It's the reference that dealer prices are built on, not a price you can buy a single coin at.

Spread

Also called Bid-ask spread

The gap between a dealer's ask and bid prices. It's roughly what you'd lose if you bought and sold straight back while prices stayed still.

Sterling silver

Also called 925 silver

An alloy of 92.5% silver, usually with copper, often marked 925. It's common in jewelry and silverware and is valued on its silver content when sold for scrap.

Third-party grading

Also called TPG, Coin certification

Independent checking of a coin's authenticity and condition by a company such as PCGS or NGC that is neither the buyer nor the seller. It makes coins easier to trade sight unseen, though grading fees mean it isn't worth it for every coin.

Toning

Colour that forms on a coin's surface over time as the metal reacts with the air, most often on silver. Attractive natural toning can add value to a collectible coin; artificial toning can lower it.

Troy ounce

Also called ozt, oz t

The standard unit for weighing precious metals, equal to about 31.1 grams. It's roughly 10% heavier than the everyday ounce of about 28.35 grams.

Unallocated storage

Also called Unallocated account, Pooled storage

An account where you own a claim on a quantity of metal, but not specific bars. It's usually cheaper than allocated storage, but if the provider fails you may be just another creditor.