DEFINITIONS

Assay

To test a metal for purity.

Bid / Ask

Bid or buy is the price a dealer will pay for gold bullion coins. Ask or sell is the selling price offered by a dealer. (See Spread.)

Bullion

Uncoined precious metals usually in the form of bars, wafers or ingots.

Bullion Coin

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

Cash Price

Price required for immediate settlement since most gold purchases are cash transactions. Also known as "spot price."

electroplate

process of covering metal articles with a film of other metals. The article is immersed in a chemical solution; electric current (D.C.) flows through solution from a piece of metal (anode) to article (cathode) depositing metal thereon by electrolysis.

Face Value

The nominal value given to legal tender coin or currency (i.e., a 1-oz gold American Eagle has a face value of $50).

Four Nines

Gold with a fineness of .9999 (the purest gold available).

Karat

Unit of fineness, scaled from one to 24. 24-karat gold (or pure gold) has at least 999 parts pure gold per thousand; 18-karat has 750, etc.

Legal Tender

The coin or currency which the monetary authority of a country declares to be universally acceptable therein as a medium of exchange; acceptable in the discharge of debts.

Liquidity

The quality of being readily convertible into cash.

London Fix

Twice-daily bidding session in London of the five major gold traders, at which the price is fixed or set. The London Fix is the basis for many gold contracts worldwide.

malleability

Property of some metals of being extended or shaped by beating with a hammer or by the pressure of rollers.

Numismatic

Coins which are valued for their rarity, condition and beauty beyond the value of their gold content. Generally, premiums for numismatic coins are higher than for bullion coins.

Premium

In gold coinage, the amount by which the market value of a gold coin exceeds the actual spot value of its gold content. Part of the premium is recovered by the seller at resale.

Spread

Represents the difference between Bid and Ask prices.

Troy Ounce

A unit of weight, equal to about 1.1 avoirdupois (ordinary) ounces. The word ounce when applied to gold, always refers to troy ounces.