Precious Metals Glossary
Plain-English definitions for gold, silver, and bullion terms — from spot price and melt value to numismatics and the troy weight system.
A
Alloy
A metal made by combining two or more metallic elements. Sterling silver (92.5% silver + 7.5% copper) and 14K gold (58.3% gold + other metals) are common alloys in bullion and jewelry.
Ask Price
The price a dealer will sell metal to you. Always higher than the bid price. The difference between ask and bid is the spread, which represents the dealer's margin.
Assay
A test that determines the purity and metal content of a coin, bar, or piece of jewelry. Assay cards are often included with new bullion bars as proof of authenticity and fineness.
B
Bid Price
The price a dealer will pay to buy metal from you. Always lower than the ask price. When selling scrap gold or silver, you will receive the bid price or a percentage of it.
Bid-Ask Spread
The difference between the price dealers charge when selling (ask) and the price they pay when buying (bid). A tighter spread means better liquidity and lower transaction costs.
Bullion
Precious metals in bulk form — bars, rounds, or coins — valued by their metal content and weight rather than face value or collectability. Examples include silver bars, gold eagles, and platinum rounds.
C
Coin Silver
An alloy that is 90% silver and 10% copper, historically used in US coins minted before 1965. Dimes, quarters, half dollars, and dollar coins from that era are all coin silver.
COMEX
The Commodity Exchange, a division of the CME Group where gold, silver, copper, and other metal futures contracts are traded. COMEX prices heavily influence global spot prices.
D
DCA (Dollar Cost Averaging)
An investment strategy of buying a fixed dollar amount of metal at regular intervals regardless of price. Over time this averages out the purchase price, reducing the risk of buying all at once at a peak.
Dwt (Pennyweight)
A unit of weight equal to 1/20 of a troy ounce, or 1.5552 grams. Commonly used by jewelers and goldsmiths when weighing gold and silver jewelry.
F
Face Value
The legal tender denomination stamped on a coin. A 1964 Washington quarter has a face value of $0.25, but its silver melt value is far higher. For junk silver calculations, face value is used as a shorthand for quantity.
Fine Gold / Fine Silver
Metal that is 99.9% (three nines) or 99.99% (four nines) pure. Bullion marketed as .999 fine silver or .9999 fine gold is considered investment-grade purity.
Fineness
The purity of a precious metal expressed as parts per thousand. A coin with a fineness of .925 is 92.5% silver. A bar marked .9999 is 99.99% pure gold.
Fiat Currency
Government-issued money not backed by a physical commodity like gold. The US dollar has been fiat since 1971 when the gold standard was abandoned. Many precious metals investors hold bullion as a hedge against fiat currency devaluation.
G
Gold Standard
A monetary system in which currency is directly linked to a fixed quantity of gold. The US operated on a gold standard until 1971 (Nixon Shock). Coins minted under the gold standard, like pre-1933 US gold coins, are highly collectible.
Gold-Silver Ratio
The number of ounces of silver it takes to buy one ounce of gold. Calculated by dividing the gold spot price by the silver spot price. Historically ranges from 15:1 to over 100:1. A high ratio suggests silver may be undervalued relative to gold.
Grain
The smallest traditional unit of weight for precious metals. There are 480 grains in a troy ounce and 15.432 grains in a gram. Rarely used today except for very small quantities.
Gram
A metric unit of weight. One troy ounce equals 31.1035 grams. Small gold bars are often sold in gram sizes (1g, 2.5g, 5g, 10g) and carry a higher premium per ounce than larger bars.
H
Hallmark
A stamp or engraving on a piece of metal that certifies its purity, origin, or date of manufacture. Common hallmarks include "925" for sterling silver, "750" for 18K gold, and mint marks on coins.
J
Junk Silver
Pre-1965 US coins (dimes, quarters, half dollars) that contain 90% silver. The term "junk" refers to their lack of numismatic premium — they are valued purely for silver content. A $1 face value in junk silver contains approximately 0.715 troy ounces of silver.
K
Karat (K)
A measure of gold purity, expressed in 24ths. 24K gold is pure gold (99.9%+). 18K is 75% gold, 14K is 58.3%, and 10K is 41.7%. Not to be confused with "carat," the unit for gemstone weight.
Kilogram Bar
A bar weighing one kilogram (32.15 troy ounces). Popular for silver investment due to lower premiums per ounce compared to smaller bars. Gold kilo bars also exist but are much higher in value.
L
LME (London Metal Exchange)
The world's premier exchange for base metal futures, including copper, nickel, aluminum, and zinc. LME prices are the global benchmark for industrial metals. Nickel and copper spot prices are often quoted in LME terms.
M
Melt Value
The intrinsic metal value of a coin or piece of jewelry based purely on its precious metal content and the current spot price. A coin's melt value is its floor value — it can never be worth less than its metal content.
Mint
A facility that manufactures coins and bullion products. Government mints (US Mint, Royal Canadian Mint, Perth Mint) produce official legal tender coins. Private mints produce rounds and bars that are not legal tender.
Mint Mark
A small letter stamped on a coin to identify which mint facility produced it. US examples: "P" (Philadelphia), "D" (Denver), "S" (San Francisco), "W" (West Point). Important for collectors determining coin value.
N
Numismatic
Relating to coins valued for their rarity, condition, and historical significance beyond their metal content. A numismatic coin may sell for many times its melt value. Opposite of a bullion coin, which trades near spot.
O
Obverse
The front or "heads" side of a coin. On US coins, the obverse typically features a portrait (Lincoln on pennies, Washington on quarters). Important terminology for coin grading and description.
P
Palladium
A rare silvery-white metal in the platinum group (PGM). Primarily used in catalytic converters for gasoline vehicles. Palladium spot prices are quoted per troy ounce and can exceed gold in value.
Platinum
A dense, rare, silvery metal in the platinum group. Used in catalytic converters, jewelry, and industrial applications. Historically more valuable than gold, though the two have traded near parity in recent years.
Premium
The amount paid above the spot price to purchase physical metal. Premiums cover minting costs, dealer margins, and supply/demand. A Silver Eagle typically carries a $3–$6 premium over spot. High premiums reduce investment efficiency.
Premium Over Spot
The percentage or dollar amount above the spot price that you pay for a coin or bar. Calculated as: (purchase price − spot price) / spot price × 100. Lower is better when buying for metal content.
Proof Coin
A specially minted coin with a mirror-like finish, sharp details, and frosted design elements. Proof coins are produced for collectors and carry higher premiums than bullion strikes. They are not intended for circulation.
R
Reverse
The back or "tails" side of a coin. On US eagles it features an eagle design. On the Morgan dollar, it features an eagle with outstretched wings.
Round
A privately minted silver or gold disc that resembles a coin but is not legal tender. Rounds typically carry lower premiums than government-minted coins, making them efficient for stacking.
S
Scrap Gold
Gold in the form of broken jewelry, dental gold, or other items that is sold for its metal content to be melted and refined. Scrap gold dealers typically pay 70–90% of melt value depending on purity and market conditions.
Silver
A lustrous white precious metal (symbol: Ag) with the highest electrical conductivity of any element. Used in coins, jewelry, solar panels, electronics, and medicine. Spot price is quoted per troy ounce.
Spot Price
The current market price for immediate delivery of one troy ounce of a precious metal. Spot prices fluctuate continuously during market hours and are the baseline from which premiums and melt values are calculated.
Stacking
The practice of accumulating physical silver or gold over time, usually buying regularly regardless of price. "Stackers" typically focus on accumulating ounces rather than short-term price speculation.
Sterling Silver
An alloy that is 92.5% silver and 7.5% copper (fineness: .925). The standard for silver jewelry and flatware in most countries. Marked with "925" or a hallmark. Common in silverware, candlesticks, and jewelry.
T
Troy Ounce
The standard unit of weight for precious metals. One troy ounce equals 31.1035 grams — about 10% heavier than a standard (avoirdupois) ounce (28.35g). All precious metal spot prices are quoted per troy ounce.
Troy Weight System
The system of weights used for precious metals: 24 grains = 1 pennyweight (dwt), 20 dwt = 1 troy ounce, 12 troy ounces = 1 troy pound. Different from the standard avoirdupois system used for everyday items.
U
Uncirculated (BU)
A coin that has never been used in commerce and retains full original luster. "BU" stands for Brilliant Uncirculated. Higher grade than circulated coins, lower than proof. Most modern bullion coins are sold in uncirculated condition.