Gold & Silver Jargon Buster
A guide we have put together to help understand – gold jargon, gold lingo, gold terminology, gold terms, gold definitions, investing jargon, silver jargon, silver terminology and silver terms. As an investor keen on investing in gold or silver, it’s important to be up to date with silver and gold terminology. The precious metals market has several such terms, which it would seem are known only to savvy investors. When trading in gold and silver, we need to be aware of these terms as parties we deal with, such as gold investment brokers, financial advisors, numismatists, all use these terms in one way or the other when dealing with clients. There are key terms to be aware of, for example, gold and silver are measured in troy ounces. The troy ounce is not the same as a regular ounce. A troy ounce is 31.103 gms. This means a troy ounce is 1.09 regular ounces. This is an interesting example. Often, investors buy a 100-ounce gold bar. They would expect that it weighs 6.25lbs on the scale, but when it shows 6.85lbs, it often leaves them confused.
Similarly, there is a difference between sterling silver and pure silver. Pure silver, otherwise known as ‘fine silver’ is the purest form of the white metal available in the industry, which has a purity of 99.9%. However, the problem with using fine silver to manufacture jewellery or silverware is that it’s way too soft and malleable. These items, which enjoy high demand from customers require a much harder version of silver that can hold shape, as well as provide a durable, shiny exterior. After all, the lure of silver is in its shine and sparkle. So, manufacturers use another form of silver, called sterling silver, which is, in fact, an alloy. It’s only 92.5% pure silver, while the other 7.5% consists of base metals.
Every trade has its own technical language that we often call lingo or jargon. Have you ever heard two doctors having a conversation? They usually use a lot of words which are a part of medical terminology, and they look like they perfectly understand each other. However, it can be frustrating for a layperson, to whom it all sounds like double Dutch. Now, as an investor, you need to learn the precious metals business first. How else are you going to make money out of it if you don’t understand it in the first place? So, you need to learn the language of the trade. The minute you do that and go have a conversation with a gold trader, you will be taken seriously right away. Now that you speak the language, you’re one of them and you won’t be treated like a novice. Gold and silver terminology also comes in handy when doing your own research. All investors do their research on the market before making purchase decisions. Familiarity with investment-related jargon is essential for you, especially if you’re new to investing in precious metals.Learn all about jargon by watching, “Gold & silver investment jargon explained”
At Physical Gold, our team of consultants are ever ready to guide investors just like you in learning more about the market. We believe that savvy investors are important in creating a balanced marketplace. Call us on 020 7060 9992 or contact us via email to connect with one of our consultants. We will try our best to avoid unnecessary investing jargon!
Listed below is an A-Z of many gold and silver terms you will find in the gold and silver industry. These are arranged in ascending alphabetical order.
A mixture of two or more metals. Metals such as silver, nickel, copper and zinc are frequently mixed with gold to improve its hardness and/or change its colour.
When an investor buys gold outright and stores it in a professional bullion vault with a safekeeping agreement in the custody of a bank, it is commonly known as allocated gold. This gold is not the property of the bank but is owned by the investor. In the event of the bank becoming insolvent, allocated gold is not lost. However, the investor may require paying certain storage charges to the bank which needs to be factored into the cost of the transaction.
The American Eagle is a type of official bullion coin which is produced by the United States Mint. First released in 1986, the coin is predominantly minted in gold but has on occasions also been minted in both Silver and Platinum.
An analysis of a metal used to determine its purity. A series of assays can be run to determine the alloys in the metal as well.
The chemical symbol for silver with atomic number 47.
The chemical symbol for gold which is derived from “aurum”, the Latin word for gold.
British Numismatic Trade Association
Brilliant Uncirculated used to describe a coin in new condition. The same pristine condition as when it left the mint.
A market in which the primary trend is up.
Precious metals in bulk form which are traded are known as bullion. Bullion can come in the form of bars or minted into coins.
A coin with a symbolic face value whose market value is determined only by its inherent precious metal content.
A capital gains tax (CGT) is a tax charged on the profit realised on the sale of certain assets that were purchased at a lower price. The most common capital gains are realized from the sale of bonds, stocks, and property. There is no Capital Gains Tax (CGT) to pay when a UK resident sells British legal tender coins at a profit. This contrasts with many alternative investments that attract income or capital gains tax. Therefore, an investor gets to keep all their profit, which further enhances returns.
A “certified” gold coin is encapsulated in a tamper-proof, sonically-sealed, high-security hard plastic holder, with a unique certification number and bar-code permanently sealed inside each coin capsule for the protection of the investor.
These are coins minted for each Chinese New Year by the Shanghai Mint. These have been minted each year since 1981 and are available in gold, platinum and silver. The reverse of each lunar coin depicts the zodiac animal for that lunar year, whereas the obverse reflects an image of cultural significance in China.
A useful physical asset whose value is based on its commercial use and scarcity.
Counterfeiting of precious metals is where imitations are created to deceive or defraud the buyer. They look genuine to the naked eye but when tested are counterfeit. Always buy gold and silver from a reputable dealer such as Physical Gold.
A design found on a coin. Frequently it is the bust or profile of a person who symbolizes a particular country at a particular time in history or a country’s coat of arms or insignia.
An engraved metal tool used to strike or stamp the design on a coin.
How many individual elements a precious metals allocation consists of. It is deemed to have more divisibility to hold 10 x 1 ounce gold bars than 1 x 10 ounce bar.
This is a naturally occurring gold and silver alloy, which also contains trace elements of other metals (e.g. copper).
Exchange-traded funds or ETF’s are another way to buy gold without physically owning them. The funds are managed by fund managers who have proven expertise in the gold market, so the assumption is that they would know better about trading in gold than an ordinary individual. When buying an ETF, you buy units in an exchange-traded fund, and as the fund performs better, the value of your units goes up. However, it’s important to research the fund before putting your money into it. Many funds have different expense structures and it’s important to understand these properly. The liquidity of the fund is also important, as many funds sell their units without backing them properly buy gold. This can cause problems later on if several investors start selling their units, the fund may not have enough assets to back themselves up.
The legal monetary value stamped on a coin.
The open area or background on a coin.
The purity of a precious metal measured in 1,000 parts of an alloy: a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal.
The metallic weight of a coin, ingot, or bar, as opposed to the item’s gross weight which includes the weight of the alloying metal.
The Eagle is the American one ounce 22 karat gold coin, first issued in 1986.
A future is a financial product where you take a product position now, and the settlement date is a pre-decided date in the future. This means that you don’t have to pay for the entire amount at this point in time and the seller also doesn’t need to deliver any gold to you. Many investors speculate on gold future trades, in an attempt to buy and sell before the delivery date and simply pay out their gains and losses. You need to pay a margin when buying a gold future. A margin is a down payment that locks you into the deal, reassuring the seller that you will not walk away. One needs to be aware that if the price of gold falls during that period, the margin needs to be topped up.
These are reserves of gold held by the central banks of governments for numerous purposes such as currency protection and managing balance of payments deficits, etc. Governments often top-up gold reserves in times of economic uncertainty
The amount of silver you can buy with the same money it costs to buy one ounce of gold at any given point in time based on their spot prices. So, a ratio of 85 would mean that 1 ounce of gold would buy 85 ounces of silver.
A SIPP is a self-invested personal pension plan . Gold can be part of this plan as an investment and SIPP options are available with physical gold. SIPP plans in the UK are capital gains tax-free in addition to which the government might pay up to 45% of the cost of your gold investments . The important thing to note is that the gold will not come to you physically and will be held by your pension fund. There are also certain administration fees that you may need to pay to your pension fund when you invest in such a scheme.
A monetary system based on convertibility into gold; paper money backed and interchangeable with gold.
An ingot is a form of gold bar, which gets its name from the mould in which the bar is cast
A piece of silver with a purity of less than 90%.
From the Greek word “keration”, meaning carob bean, the term karat is now used to indicate the proportion of gold relative to other substances within a metallic material. One carat is equivalent to a fraction of one twenty-fourth. Gold purity can also be quoted in thousandths, with 24-Karat gold referring to around 999 thousandths. The typical gold bar will have a minimum of 23.88 Karats (or 995 thousandths), and the minimum gold content required to mint any marketable gold coin is 21.6 carats or 900 thousandths.
This is a wholesale market trading in gold and silver, which is over the counter. Members of the LBMA are usually refiners are bullion dealers, activities are overseen by the Bank of England
Currency in specified denominations which you could use as payment. Legal tender coins have a face value (i.e. Britannia £100) but the gold content is far more valuable than the amount written on it.
The ease in which an asset can be turned into cash.
Twice daily bidding sessions in London of five major gold firms, at which the price of gold is “fixed” or set.
A shiny appearance on the surface of a coin, usually an uncirculated coin.
The Maple Leaf is the Canadian one ounce 24 karat gold coin, first produced in 1979.
The price at which a coin or bullion item trades.
The mintmark is a letter or symbol on a coin that identifies where that particular coin was produced.
The Nugget is the Australian one ounce 24 karat gold coin, first produced in 1986. A gold nugget is also a form of naturally occurring gold in its non-refined state, e.g. as found in a gold mine.
Coins whose prices depend more on their rarity, condition, dates, and mint marks than on their gold content alone.
A collector and student of money, especially coins. Numismatic refers to coins of a more historical and collectable nature.
The obverse is the front of a coin, usually consisting of the image of one or more people. The reverse is the rear of the coin which often features a picture or design.
Ownership of gold or silver which isn’t tangible. Examples are Electronic Traded Funds (ETFs), mining shares, precious metals funds.
The Philharmonic is the Austrian one ounce 24 karat gold coin, first produced in 1989.
Real gold and silver which can be touched and held. Common forms are bars, coins and jewellery.
An arrangement whereby the investor’s precious metals are held by a third party and mixed in with those of other investors. It is common practice for pooled accounts to actually contain less precious metals than it should.
The additional cost of a gold or silver coin or bullion over and above the spot gold/silver price, including the costs of fabrication, and distribution. Rare coins carry an additional premium called numismatic value which is based on scarcity, quality, demand and intangible factors.
Each Proof coin is carefully inspected throughout the manufacturing process to make sure that only perfect specimens are issued. Proof coins are usually of a limited issue and often have employed different minting techniques to produce a highly polished mirror finish to the field (background) and a matt finish to the raised features.
Bullion coins that have not been certified or encapsulated
A safe haven asset is where people typically invest in times of political turbulence or uncertainty. Gold is known as the ultimate safe haven.
Your gold/silver coins or bars are kept apart from other investor’s precious metals. Just as importantly the gold/silver does not fall onto the balance sheet of either the dealer or the storage facility. This means that in the event of either another investor, the dealer, or indeed the storage company itself going bankrupt, your precious metals are fully protected and cannot be touched by creditors.
A Self Invested Personal Pension (SIPP) is a UK retirement plan offering the investor the widest possible choice of investments. Investors are able to obtain a discount of up to 50% through tax relief as gold bullion is the only commodity to qualify for a SIPP.
The difference between the bid and ask price (i.e. the price where we would buy or sell the gold/silver).
A standard of silver defined by law as 925 parts pure silver per 1000 parts overall. Sterling silver is the principal standard in the UK and USA.
An asset which is tangible i.e. is capable of being felt or touched, something which has real substance and is not imaginary. Hence the name of our Company, Physical Gold.
The standard weight in which gold and silver are quoted in the international market, weighing 31.1035g.
A tax added to certain products and services at sale. The percentage is currently 20%. There is no VAT to pay when you buy investment grade gold coins or bars. This is a great advantage over silver and platinum, both of which generally attract VAT. You’re now able to also buy physical silver through Physical Gold Ltd without being charged VAT.