Ask

The price at which a dealer offers to sell.

Assay

A test determining the weight and fineness of a metal.

Bear Market

When the primary market trend is down.

Bid

The price at which a dealer is willing to buy.

BU

Stands for “brilliant, uncirculated” and is used to describe coins in new condition.

Bullion

Precious metals in bar form of at least 99.5% purity.

Bullion Coin

A coin with symbolic face value, but which trades at a price relative to its intrinsic value.

Bull Market

When the primary trend in the market is up.

Cash Market

A market in which delivery and payment have to be made within two working days of the transaction date.

Chameleon

A broker or dealer who changes his position on an investment to what he thinks will cause the investor to enter a transaction.

Derivative

A 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.

Dollar-Cost-Averaging

Saving in precious metals in regular, scheduled increments to insure stability even when prices fluctuate.

Face Value

The legal monetary value stamped on the face of a coin.

Fiat Money

Paper money made legal tender by law. It is not backed by gold and silver.

Forward Transaction

Purchase or sale for delivery and payment at an agreed date in the future. Forward transactions are not subject to the standardized procedures and regulations of a commodities futures exchange.

Futures Contract

An agreement made on an organized exchange to take or make delivery of a specific commodity or financial instrument at a set date in the future.

Gold Standard

A monetary system based on its convertibility to gold; paper money that is backed by interchangeable gold.

Grain

The earliest weight unit for gold. One troy ounce contains 480 grains.

Gram

The basic unit of weight in the metric system. One troy ounce contains 31.1035 grams.

Hallmark

The mark on a bullion item that identifies its producer.

Hedge

A transaction made intending specifically to protect an existing or anticipated physical market exposure from unexpected or adverse price fluctuations.

Inflation

Classically, “inflation” is an increase in the money supply and available credit (the use of which increases the money supply). Typically, however, “inflation” is used to simply mean higher prices. Due to the double-meaning, “monetary inflation” and “price inflation” are sometimes used for clarification.

Intrinsic Value

The value of a coin’s metal content.

Inverted Market

A situation in which the prices for future deliveries are lower than spot price. (Also known as a backwardation.)

Karat

A measure of the purity of precious metals. Pure gold is 24 karat.

Kilo Bar

A bar weighing one kilogram.

Kilogram

1,000 grams. One kilogram contains 32.1507 troy ounces.

Legal Tender

Coins or banknotes that must be accepted if offered in payment of a debt.

Legend

The inscription on a coin.

Market Value

The price at which a coin or bullion item trades.

Metric Ton

1,000 kilograms or 32,151 troy ounces.

Mint Mark

A letter mark or symbol stamped on a coin to identify the mint where it was struck.

Mint State

Describes a coin in uncirculated condition.

Numismatic Coins

Coins whose prices depend more on their rarity, condition, and mint dates, than on their actual metal content.

Obverse

The front side of a coin.

Ounce

A unit of weight. The precious metals industry uses “troy ounces” which is actually equal to 1.09714 standard ounces (or 31.1035 grams).

Premium

The dollar amount or percentage that a coin sells over its intrinsic (metal content only) value. Ex: American Eagle coins sell for a higher price per ounce than 1000 oz. silver bars because of government minting fees and market demand.

Proof

A coin produced using special dies and planchets that results in a sharpness of detail and a nearly-flawless surface. Proof coins are produced specifically for the collector (numismatic) market.

Rally

An advancing price movement following a decline in the market.

Restrike

An officially-issued reproduction of a former circulating coin.

Reverse

The back of a coin.

Spot

The price for physical delivery of bullion bars, typically 100-oz bars of gold or platinum and 1,000-oz bars of silver.

Spot Market

A market in which delivery and payment have to be made within two working days of the transaction date.

Spread

The difference between the buying price and the selling price of a coin or trading unit.

Symbolic Face Value

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

Troy Ounce

Unit of weight for precious metals. One troy ounce is equal to 1.09714 standard ounces, 31.1035 grams, or 480 grains.

Uncirculated

A coin in new condition. Sometimes used interchangeably with “BU” and “Mint State.”

Yield

A measure of the annual return on an investment expressed as a percentage.