Glossary
A
- Ag
- The periodic table symbol for silver.
- Alloy
- A substance composed of two or more metals.
- Allocated Metal
- The assignment of defined quantities of physical metals to specific accounts.
- Approved Carriers
- An exchange-authorized armored carrier approved to transport precious metals.
- Argentum
- Latin for silver.
- Ask
- The price which the seller is willing to accept for an asset; also known as the offer price.
- Assay
- The act of testing the purity of precious metals.
- Au
- The periodic table symbol for gold.
B
- Bank Wire
- An electronic transfer of funds through the Federal Reserve System from one financial institution to another for the benefit of a specific account.
- Base Metal
- Copper, aluminum, iron, lead, nickel, tin and zinc.
- Bear Market
- Market characterized by a declining price trend.
- Bid
- The price at which a dealer is willing to buy a commodity. It is the opposite of ask.
- Bullion
- Precious metals, including gold, silver, platinum, and palladium, that are traded based on their intrinsic metal value.
- Bullion Coin
- A precious metal coin whose market value is determined by its inherent precious metal content. They are bought and sold mainly for investment purposes.
- Bull Market
- Market characterized by a rising price trend.
C
- Cash Market
- The market for a cash commodity where the actual physical product is traded.
- Central Bank
- The entity responsible for establishing a nation's monetary policy and controlling the money supply, primarily by raising or lowering interest rates. The Federal Reserve is the U.S. central bank.
- Close
- The official end of a trading session.
- Commodity Futures Trading
Commission (CFTC)
- U.S. federal regulatory agency created under the Commodity Futures Trading Commission Act of 1974. It ensures open and efficient operation of the futures markets.
D
- Deliverable Bar
- A precious metals bar with a weight, fineness and hallmark approved as a tradable unit on a commodity exchange.
- Depository or Warehouse Receipt
- A document issued by a depository institution indicating ownership of a commodity stored in a vault or warehouse.
- Derivative
- Financial instrument whose value is derived from one or more underlying assets. For example, futures contracts are derivatives of physical commodities.
- Dore Bullion
- An impure alloy of silver or gold named for a Dore furnace at a mining facility.
- Ductility
- An ability to change shape drastically without breaking. The capacity of a metal to be hammered into a thin sheet or drawn into a fine wire.
F
- Face Value
- The stated monetary value of an investment coin, which does not necessarily correspond to its actual worth. For example, the face value of a 1-oz. gold American Eagle is $50, but its actual market worth is tied to the spot value of its gold content, which may be significantly higher.
- Fineness
- The purity of a precious metal measured in parts per thousand. A "Good Delivery" bar contains a least .995 part pure gold and no more that five parts other metals or impurities. Some gold and silver bullion products, such as the original gold Canadian Maple Leaf coins, are 99.99% pure gold and are often described as being struck from .9999-fine gold.
- Fine Weight
- The weight of precious metal contained in a coin or bullion, calculated by multiplying the gross weight by the fineness.
- Fine Silver
- Pure silver, generally 99.9% pure.
G
- Gold
- A soft, shiny, heavy, malleable and highly ductile transition metal that has long been used as a store of wealth and historically served as a standard for several currencies. Gold is used in coins, jewelry and has several industrial applications.
- Gold/Silver Ratio
- The number of ounces of silver required to buy one ounce of gold at current spot prices.
H
- Hallmark
- A stamped impression on the surface of a precious metals bar that identifies the producer and includes the serial number, weight and purity of metal content.
- Hedge
- An investment made as a strategy to mitigate risk of adverse price movements in a given asset.
K
- Karat
- A measure of the purity of gold. Pure gold is 24-karat.
L
- Legal Tender
- Coins and paper currency that are authorized for the payment of debts.
- Licensed Weightmaster
- An organization approved by an exchange to witness and verify the weighing of silver or gold delivered against a silver or gold futures contract.
- Liquidity
- The ease with which investments can be bought or sold quickly without having a major impact on the price of those investments.
- Liquid Market
- A market characterized by the ability to buy and sell with relative ease.
- London Fix
- Price set each day in London by five old-line firms. The "fixing price" reflects the price at which buy and sell orders from the firms' customers are in balance. The London Fix is an internationally recognized benchmark price for that particular moment in time.
M
- Malleable
- The ability of a metal to be hammered into different shapes without breaking.
- Market Value
- The total price of a bullion bar or coin inclusive of intrinsic value and any premium or discount.
- Money Order
- Order for the payment of a specified amount of money, usually issued and payable at a bank or post office.
N
- National Futures Association (NFA)
- A self-regulatory organization that promulgates rules of conduct related to the U.S. futures industry and mediates disputes between customers and brokers.
- New York Mercantile Exchange (NYMEX)
- The New York Mercantile Exchange, Inc. (NYMEX) is one of the world’s largest physical commodity futures exchanges. Trading on the exchange is conducted through two divisions: the NYMEX Division, home to the energy, platinum, palladium futures and options markets; and the COMEX Division, on which all other metals futures and options trade.
- Numismatic
- The study of and collection of money in the form of coins and bars that are considered rare and coveted by collectors. Coins and bars with numismatic value will generally sell for significantly more than their metal per ounce spot price.
O
- Offer
- A motion to sell a commodity at a specified price. It is the opposite of bid. The offer price is the price at which a dealer offers to sell a commodity.
P
- Palladium
- A rare, silver-white metal of the platinum group. Palladium resembles platinum chemically and is extracted from some copper and nickel ores. It is primarily used as an industrial catalyst and in jewelry.
- Pd
- The periodic table symbol for palladium
- Platinum
- A heavy, malleable, ductile, gray-white transition metal. Platinum is resistant to corrosion and occurs in some nickel and copper ores, along with some native deposits. It is used in jewelry, laboratory equipment, electrical contacts, dentistry and automobile emissions control devices.
- Premium
- The market value of a coin less the intrinsic value of its metal content. Premiums are set by issuing authorities (e.g., U.S. Mint) and/or bullion dealers and vary by product.
- Pt
- The periodic table symbol for platinum.
S
- Securities and Exchange Commission (SEC)
- An independent governmental agency that administers U.S. securities laws and regulates the firms that buy and sell those securities.
- Settlement Price
- The price established by an exchange’s settlement committee at the close of each trading session as the official price to be used by the clearinghouse in determining net gains or losses, margin requirements and the next day’s price limits.
- Silver
- A chemical element in the periodic table that has the symbol Ag (from the traditional abbreviation for the Latin Argentum) and atomic number 47. A soft, white lustrous transition metal, silver has the highest electrical and thermal conductivity of any metal and occurs in minerals and in free form. It is used in coins, jewelry, tableware and photography.
- Specifically identified metals (bars)
- Bars that are distinguished by a serial number or other unique marker that identifies them as belonging to you. Storage costs are generally higher for specifically identified metals than for unallocated and allocated metals.
- Spot
- A commodities or securities market in which goods are sold for cash and immediately delivered.
- Spot Market
- A market of immediate delivery of product and payment.
- Spot Price
- The current price in the market for immediate delivery of physical precious metals.
- Spread
- The difference between the bid price and the ask price of an asset.
- Sterling Silver
- Silver of a fineness of 92.5%.
T
- Troy Ounce
- The Troy ounce is the traditional unit weight for precious metals, believed to be named after a weight used at the annual fair at Troyes in France in the Middle Ages. Conversion: 1 Troy oz. = 480 grains = 31.1035 g. = 1.09711 avoirdupois oz.
U
- Unallocated metals
- Physical precious metals that are held in book-entry form in your brokerage account and are backed by physical precious metal stored in either the United States or London. Unallocated metals cannot be physically delivered, and storage costs are generally lower than those for allocated and specifically identified metals.