14 Precious Metal Terms All Bullion Coin Buyers Should Know

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From the Archives : Originally published May 13th, 2015
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Category : Gold University

BULLION BARS AND COINS

 

Bullion Coins - legal tender issues struck from precious metal designed to be kept as a store of value or an investment (opposed to circulating coinage used day-to-day or proof collectables)

Junk Silver - older coins that derive most of their value from their silver content

Troy Ounce (oz t) - traditional unit of measure used for precious metals where 1 troy ounce = 1.097 avoirdupois ounce (or 31.103g)

Fineness / Purity - the amount (by weight) of pure gold or silver in the coin eg 9999 parts per thousand = 99.99 per cent pure

Gross Weight - the coin's total weight as registered by a scale

Fine Weight - the coin's gross weight multiplied by its percentage purity

Spot Price - the price at which physical gold or silver of specific fineness is traded at a particular place and time

Premium - the amount charged by the coin manufacturer over and above the spot price of metal to cover the cost of fabrication and other overheads

Face Value - the nominal or symbolic valueprinted on the face of a bullion coin

Intrinsic Value - the value of the coin's precious metal content (aka Melt Value). Calculation: gross weight x purity x metal spot price

Numismatic Value - the amount over the intrinsic value the market is prepared to pay for rarity or some other factor that makes the coin collectable

Ask Price - the price of metal plus the coin premium - in other words the selling price

Bid Price - The price at which a mint or gold dealer will buy-back a bullion coin   

Spread - The difference between the selling price (Ask) and the buy-back price (Bid) - useful for determining how much the coin must increase in value before a profit can be realised

 

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