Glossary of Bullion Terms
Understanding precious metals terminology is essential for successful bullion investing. This comprehensive glossary will help Nova Scotia investors navigate the gold and silver markets with confidence.
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Master these fundamental terms to become a more informed precious metals investor
Bullion
General term used to describe bars and coins made of precious metals like gold, silver, platinum and palladium. They are coveted for their investment quality and meet international standards for weight and purity.
Fineness
The purity of a precious metal measured in parts per thousand of an alloy. For example, a Canadian Maple Leaf has a fineness of .9999, meaning it is 99.99% pure.
Troy Ounce
The traditional unit of weight for precious metals. One troy ounce equals 31.1035 grams and is the standard for pricing and trading bullion worldwide.
Spot Price
The live price at which precious metals can be bought or sold for immediate delivery. This is the baseline price before premiums and dealer fees.
Premium
The additional cost above spot price for which bullion sells. It represents costs of fabrication, distribution, and dealer fees. Smaller coins typically have higher premiums.
Hallmark
An official mark on precious metal surfaces showing purity, producer, and sometimes serial numbers. Essential for verifying authenticity and quality.
Complete A-Z Bullion Glossary
A
Allocated Storage
Bullion products owned by an investor and stored in a professional vault under an arrangement. The products are allocated to a specific account and uniquely identified, providing direct ownership.
Ask Price (Offer Price)
The price at which a dealer is willing to sell a particular precious metal. This is typically higher than the bid price, with the difference being the dealer's spread.
Assay
The testing of gold or silver to determine its fineness or purity. Professional assays provide certification of metal content and quality.
B
Backwardation
A market condition where the spot price for a commodity is higher than the futures price. This historically occurs in markets with supply shortages.
Bear Market
A market condition where prices are expected to decline in the near future. This historically occurs during economic recessions.
Bid Price
The price at which a dealer is willing to buy a particular precious metal. This is typically lower than the ask price.
Bullion Coins
Contemporary precious metal coins minted by official agencies for investment purposes. Legal tender coins whose market price depends on metal content rather than rarity.
Bull Market
A market condition where prices are expected to rise in the near future. This historically occurs during economic recovery periods.
C
Commodity
A physical product which is commonly traded and holds value based on industrial and commercial use. The raw precious metals (not the finished coins/bars) are considered commodities.
Contango
A market condition where the spot price is lower than the futures price. The opposite of backwardation, indicating normal market conditions.
D
Divisibility
How easy it is to piece out and distribute a fixed weight of precious metal. Smaller denominations offer better divisibility for transactions.
Doré Bar
A bar composed of impure precious metal alloy, typically produced at mines and sent to refineries for further purification.
F
Fiat Money
Paper money used as legal tender though not backed by gold or silver. Most modern currencies are fiat money.
Fine Gold
Pure gold rated as 24 karats or .999 fine gold, representing the highest purity available.
Fine Silver
Pure silver with .999 fineness or higher, representing investment-grade silver purity.
Fine Weight
The weight of precious metal contained in a bar or coin, calculated by multiplying gross weight by fineness percentage.
L
LBMA
The London Bullion Market Association, incorporated in 1987 to represent participants in the wholesale bullion market and set international standards.
Liquidity
The ease of buying and selling a particular asset. Precious metals generally offer good liquidity in global markets.
M
Market Value
The current price at which an item trades in the marketplace, determined by supply and demand dynamics.
Melt Value
The value of precious metal that could be extracted if a coin or bar were melted down, based on current spot prices and metal content.
S
Scrap Gold
Any gold sent back to a refiner or processor for recycling, including old jewelry, dental gold, and electronic components.
Spread
The difference between the buying (bid) price and selling (ask) price of precious metals. This represents the dealer's profit margin.
Ready to Start Your Precious Metals Journey?
Now that you understand the terminology, contact Atlantic Bullion to begin building your gold and silver portfolio in Nova Scotia.