A Glossary of Gold Terms

Assay – A test to determine the metallic content of a coin bar.

Bid/Ask – Bid is the price offered by a dealer. Ask is the price a dealer is willing to take in order to effect the sale of a coin.

Bullion – Precious metal in negotiable or trading shape, such as a wafer, bar, ingot, or sometimes a coin.

Bullion Coin – A legal tender coin whose market price depends on its gold content, rather than its rarity or face value.

Face Value – The value of a legal tender coin as stamped on the unit. A 1-oz. Gold American Eagle has a face value of $50.

Gold Standard – The term to designate the monetary standard of a country when all the paper money it issues is backed by a gold reserve.

Gram – A unit of weight measurement equivalent to .0322 Troy Ounces.

Karat – Measurement of purity used in showing the fineness of gold, scaled 1 to 24. One karat is 1/24 pure gold.

Legal Tender – Coin or currency identified by a government to be acceptable in the discharge of debts.

Liquid Market – A market where selling and buying can be accomplished with ease.

Premium – The price of a coin over the value of its actual gold content.

Spot – Used in commodities trading to denote something which can be delivered readily. The spot price is the price required for immediate settlement.

Spread – The difference between the Bid and Ask prices.

Troy Ounce – A unit weight equal to about 1.1 ordinary ounces. The word ounce when applied to gold, always refers to troy ounces.