Precious Metals Terms
Acid Test:
A means of determining the fineness of gold through the use of nitric acid and aqua regia.
Actual Gold Content:
The amount of gold that exists in an object when all the alloys have been extracted.
Ag:
The chemical symbol for silver.
Alloy:
A mixture of two or more metals. Metals such as silver, nickel, copper and zinc are frequently mixed with gold to provide certain characteristics, such as color or hardness. Common alloys used in the jewelry industry are 22 karat, 18k, 14k & 9k. Pure gold is 24 karat.
Alluvial Gold:
Gold nuggets and particles which are found in rivers and streams and are recovered by dredging or panning methods.
American Eagles:
Products of the U.S. Mint, and since their debut in 1986 have become this country’s most popular gold bullion coin. Struck in a traditional coinage alloy of 91.7% pure gold (22 karat), each size contains a full measure of pure gold, plus additional silver and copper as alloy. The demonization’s of these coins are $5 (one-tenth ounce), $10 (one-quarter ounce), $25 (one-half ounce), and $50 (one ounce).
Approved Refiner:
One of a select group of refineries whose metal production is seen as meeting minimum standards for purity and appearance, and whose bars are accepted for delivery against contracts on Futures Exchanges and on the “Spot” market.
Ask:
The price at which a dealer offers to sell.
Assay:
The scientific evaluation of gold. An assayer evaluates gold through chemical analysis, weight, and other means, to determine its fineness or purity.
Au:
The chemical symbol for gold which is derived from “aurum”, the Latin word for gold.
Australian Dragon:
The current (year 2000) version is the “Year of the Dragon.” Each coin comes individually encapsulated in a square plastic case. Australia’s Lunar Calendar series began in 1997 as a ‘premium’ priced .9999 bullion coins.
Australian Kangaroo:
Australia’s gold Nuggets (now Kangaroos) were introduced in 1986 as a .9999 fine bullion coin. Each year the design is changed, since 1989 with various portraits of kangaroos. Coins come individually encapsulated in a square plastic case.
Austrian Philharmonic:
Austria’s .9999 gold Philharmonics came out in 1990, and quickly became Europe’s most popular gold bullion coin. They picture the Weinar Philharmonic building on the obverse, with musical instruments on the reverse.
Base Metal:
Base metal is a mixture of non precious metals. Typically a metal from the group; copper, aluminum, nickel, tin, zinc and lead. It is frequently used as a base for gold-filled, gold plated, or rolled gold plate coverings.
Bar:
A generic term for a bar of gold or silver and a non-numismatic form of precious metal bullion. Typically 400 oz gold or 1,000 oz silver, but can come in various sizes.
Bid:
Bid or buy is the price at which a dealer is willing to pay.
Brilliant Uncirculated:
Generally a generic term used to describe a coin that is near proof like status and has not been circulated. Also called BU.
Bullion:
Precious metals in bulk form that is in negotiable or trading shape, such as a wafer, bar, ingot, or coin.
Bullion Coin:
A legal tender coin whose market price depends on its gold content, rather than its rarity or face value. Typically of BU condition, rather than proof and have little or no numismatic value.
Bust:
The head, neck, shoulders and upper chest of an image generally found on the obverse of a coin.
Canadian Maple Leafs:
Modern bullion coins minted by the Royal Canadian Mint.
Certificates:
A common instrument issued by banks to signify ownership of a quantity of precious metals without taking delivery. Certificates confirm an individual’s ownership while the bank holds the metal on the client’s behalf. The client saves on storage and personal security issues, and gains liquidity in terms of being able to sell portions of the holdings (if need be) by simply telephoning the custodian.
Certified Coin:
A coin authenticated and graded by a professional service.
Chinese Panda:
China’s Panda gold coins began in 1982 as the first ‘premium’ priced .999 bullion coin, featuring a different panda portrait each year. They became hugely popular as collectibles by the late 1980′s. Each coin is individually sealed in a vinyl pouch at the China Mint.
Circulated:
Denotes money that is no longer in mint state, generally as a result of normal handling and exchange.
Circulation Strike:
A coin intended for use in commerce. Gold coins circulated as money in the United States prior to 1934, and in some other countries after that time. Today, gold coins do not circulate.
Commemoratives:
A gold or other coin struck to observe an anniversary, event, or other subject, with special designs, and sold at a premium to collectors and others.
Denomination:
The face value of a coin.
Double Eagles:
A U.S. gold coin of the $20 denomination. The first double eagle pattern was dated 1849; circulation strikes (and Proofs in various years) were struck from 1850-1933.
Edge:
The periphery of a coin, as viewed from the side. Edges of U.S. gold coins typically are reeded (that is, with a series of vertical ribes), or lettered.
Face Value:
The nominal value given to a legal tender coin or currency (for example a 1-oz gold American Eagle has a face value of $50). It is the minimum value guaranteed by the issuer but does not necessarily reflect the current market price of the metal.
Fiat Money:
Paper money made legal tender by law, although not backed by gold or silver.
Fineness:
The purity of a precious metal alloy usually expressed in parts per thousand (for example a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal. Thus 995 or two nines five is 995/1000 or 99.5% pure).
Fine Weight:
The metallic weight of the pure metal (either gold or silver) that a coin, bar or ingot contains, as opposed to the item’s gross weight which includes the weight of the alloying metal. Example: a 1-oz American Gold Eagle has a fine weight of one troy ounce but a gross weight of 1.0909 troy ounces.
French Franc:
French 20-franc gold “Roosters” were struck from 1899 to 1916, and each is 91.7% pure (22 karat) pure and contains .1867 troy ounce of pure gold.
Gold:
A precious yellow metallic element that is resistant to oxidation and is highly ductile and malleable. In the United States, a metal must have 10 Karats of gold or more to be called gold.
Gold Certificate:
U.S. paper money issued from the 1860s to the 1930s, exchangeable at par with current gold coins.
Gold Eagles:
Modern gold bullion coins. American gold Eagles are products of the U.S. Mint, and since their debut in 1986 have become this country’s most popular gold bullion coin. Struck in a traditional coinage alloy of 91.7% pure gold (22 karat), each size contains a full measure of pure gold, plus additional silver and copper as alloy.
Gold Nugget:
Placer gold which has been washed out of the rocks generally into river beds where it has been beaten by the water and rocks into a “nugget” shape.
Gold Standard:
A government authorization in which gold is used as the monetary standard to create coins of intrinsic value equal to the face value stamped on them. Although the United States minted gold coins beginning in 1795, and these were exchangeable with other coins and with federal paper at face value, America did not officially go on the gold standard until 1900. The Act of January 30, 1934, took America off the gold standard, although gold coins had not been circulating actively since March 1933.
Grade:
A term summarizing the overall condition of a coin or other numismatic item.
Grading Service:
A company that grades numismatic coins. Generally, graded coins are encapsulated in plastic, a procedure called “slabbing.” PCGS and NGC are the two dominant grading services in the United States.
Hedge:
A transaction initiated with the specific intent of protecting an existing or anticipated physical market exposure from unexpected or adverse price fluctuations.
Ingot:
Bulk gold poured into a (usually rectangular) mold to create a six-sided bar. Typically, an ingot is marked with the name of its refiner or assayer, its weight, and its fineness. Some ingots also have a serial number.
Intrinsic Value:
The value of a coin’s metal content.
Investment Grade:
A term that refers to coins in higher grades, usually Mint State-65, Proof-65, or higher.
Karat:
A measure of gold fineness or purity, scaled from 1 to 24. Pure gold is considered to be 24 karat and has at least 999 parts pure gold per 1 thousand. For this reason, the actual gold content of any object is the percentage relationship of its purity to 24. For example, 18 karat gold is 18/24 kt or 75% pure gold. That’s 750 parts pure gold and 250 parts alloy fine.
Krugerrand:
Gold Krugerrands from South Africa were introduced in 1967, and dominated the gold bullion market in the U.S. from 1974 through the early 1980′s. They are struck in 22 karat gold (91.7% pure), each coin containing a full measure of pure gold, plus additional copper as an alloy.
Legal Tender:
Money issued by a government, exchangeable for debts public or private. Although 1795-1933 gold coins remain legal tender, they are all worth more than face value and hence are no longer used in commerce.
Luster:
A frosty appearance on the surface of a coin, usually an uncirculated coin.
Market value:
The price at which a coin or bullion item trades.
Melt Value:
The worth of precious metal in a coin, determined by multiplying the amount of the metal it contains by the spot price of the metal.
Mexican 50 Peso:
Gold coin first issued in 1921 to celebrate the 100th anniversary of Mexico’s independence. The Mexican 50 Pesos in the bullion coin market normally are restrikes, minted from 1943 onward. Weight: 1.2057 troy ounce,.900 fine.
Mint:
The place where a coin or bar was manufactured.
Mintage:
The total amount of coins struck of a specific coin.
Mint Mark:
A letter or symbol stamped on a coin to identify the minting facility where it was struck.
Mint State:
The grade of a circulation-strike coin that shows no wear and never was used in commerce. Same as Uncirculated.
MS-60:
The lowest grade of Mint State coins. Higher-grade coins are labeled MS-61 up to MS-70. Coins showing wear are graded below MS-60 and fall into grades from AU down to G, with G being a coin showing great wear and AU being a coin showing little wear.
NGC:
Acronym for Numismatic Guaranty Corporation of America, one of two major coin grading services in the United States.
Nugget:
A lump of natural gold, usually small, typically found in a stream bed or alluvial deposit. Nuggets typically have washed away from a vein of ore or another subterranean source, by action of water and sand, take on an irregular shape. Nuggets range from the size of a grain of rice to pea-sized.
Numismatic Coins:
Coins whose prices depend more on their rarity, historical significance, condition, dates, and mint marks other than the value of the precious metal they contain. Generally, premiums for numismatic coins are higher than for bullion coins.
Obverse:
The front side of a coin which contains the principal design. The device on the obverse usually consists of a portrait and date.
PCGS:
Acronym for Professional Coin Grading Service, one of two major coin grading services in the United States.
Proof:
A coin struck under especially high pressure from dies with a highly polished mirror surface, or other special finish, and intended for sale at a premium to collectors and other interested buyers.
Reverse:
The back or tails side of a coin, the opposite of the obverse.
Round:
A disc shaped non-numismatic piece of precious metal bullion.
Slabbed Coins:
Coins encapsulated in plastic for protection against wear. Generally, “slabbed” coins are graded by one of the two major grading services.
Sovereign:
English gold coin with a face value of one pound sterling and a gold content of .2354 ounce. British gold Sovereigns were struck worldwide at the height of the British Empire. Each is 91.7% pure (22k) and contains .2354 troy ounce of pure gold. Condition of these pre-1928 coins we offer is Extra Fine to Almost Mint.
Spot:
The current market price of a precious metal based on delivery in two business days. The closing spot price varies with markets located in numerous cities and countries throughout the world. When buying gold and silver in the United States, the price will generally be based on the prices in New York or Chicago.
Spread:
The difference between Bid (the price a dealer is willing to pay) and Ask (the price a dealer is willing to sell).
Troy Ounce:
A unit of measure equivalent to 31.1034768 grams or 480 grains. When the price of gold or silver is quoted per ounce, the ounce being referred to is a troy ounce, not a standard (Avoirdupois) ounce. One troy ounce equals 1.09711 Avoirdupois ounces. It takes 14.5833 troy ounces to equal one standard (Avoirdupois) pound. The name troy is derived from the town in the Champagne region of France called Troyes which was an important center of commerce for precious metals during the middle ages.
Uncirculated:
A coin in new condition, sometimes said to be brilliant uncirculated or BU. The term is often used interchangeably with Mint State.
Wafer:
A generic term used to describe small gold bars, (usually less than 50 grams). So-called because they are thin and resemble a wafer biscuit.
Wear:
Metal lost during handling and contact with other objects.
World Gold Council – An industry based organization sponsored by a number of gold mining companies who pay an annual fee based on their level of production. The role of the World Gold Council is to promote the use of gold around the world.
Yield:
A measure of the annual return on an investment expressed as a percentage.
