Glossary of Essential Precious Metals Terms
Understanding the terminology used in the precious metals market is crucial for any investor
About This Glossary
This comprehensive glossary provides definitions for key terms related to precious metals investing. Whether you're a beginner or experienced investor, understanding these terms will help you make more informed decisions in the precious metals market.
A
Alloy
A mixture of two or more metals, or a metal and a non-metal. Precious metals are often alloyed to increase hardness, change color, or reduce cost.
Assay
A test to determine the content and quality (purity) of a precious metal sample.
B
Bullion
Precious metals (gold, silver, platinum, palladium) in bulk form, such as bars, ingots, or coins, valued by their weight and purity rather than as currency with a face value.
F
Fineness
A measure of the purity of a precious metal, often expressed in parts per thousand. For example, gold that is .999 fine is 99.9% pure gold.
H
Hallmark
An official mark or series of marks stamped on items made of precious metals, typically indicating the purity of the metal, the manufacturer or maker, and sometimes the date and location of manufacture. Hallmarks serve as a guarantee of authenticity and quality.
K
Karat (K)
A unit of purity for gold, where 24 karats represent pure gold. Common karats include:
- 24K: 99.9% pure gold
- 22K: 91.7% gold
- 18K: 75% gold
- 14K: 58.3% gold
- 10K: 41.7% gold
M
Melt Value
The intrinsic value of an item based solely on its precious metal content and the current spot price of that metal.
N
Numismatic Value
The value of a coin that exceeds its precious metal (melt) value. This additional value is based on factors like rarity, historical significance, condition (grade), and collector demand.
P
Premium
The amount charged above the spot price when buying physical precious metals. This covers costs such as minting, fabrication, distribution, and dealer profit.
S
Spot Price
The current market price for a precious metal (like gold or silver) for immediate delivery. This price fluctuates throughout the trading day based on supply and demand.
T
Troy Ounce
The standard unit of weight for precious metals. One troy ounce is equal to 31.1035 grams (slightly heavier than a standard avoirdupois ounce, which is 28.35 grams).
