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Important Precious Metal Terminology

Last updated 5 years ago

If you are searching for an investment that is safe, secure and helps to hedge your portfolio against inflation, then physical precious metals are the right choice for you! Gold and silver both offer long-term stability and intrinsic value. Take a look at the following terms that you may come across while learning about investments in gold and silver.

Bullion

For gold, bullion refers to gold coins and bars minted after 1933, whose value relies solely on the weight in gold and fluctuates with the market spot price. Some of the most well known gold bullion coins are the American Eagle, the Canadian Maple Leaf, the Chinese Panda, the South African Krugerrand, and the Austrian Philharmonic.

For silver, bullion refers to silver that comes in coin or bar form and has a value that is principally based upon its precious metal content plus the cost of production, which rises or falls with the market spot price. Some of the most well known silver bullion coins are the American Silver Eagle, the Canadian Silver Maple Leaf, Silver rounds, and the Silver Austrian Philharmonic.

Bid, Ask, Spot, and Spread

The BID price is the wholesale market price of a coin or bar, while ASK refers to the selling price. SPOT price refers to the current price of a specific raw metal at a specified time. Spot prices are shown as the "BID" (wholesale market price) and "ASK" (selling price). The difference between a coin or bar's ask and bid price is referred to as the SPREAD.

Melt Value

The Melt Value is the value of a coin or bar based on the precious metal content multiplied by the spot price of the metal.

Premium

The Premium is the amount added to the wholesale market price of a coin or bar based on supply and demand factors.

Coin Grading

The standardized grading system is used to describe the condition of a coin. The most common grading system is a scale from 1-70 with 61-70 being "Mint-State," and 70 representing a perfect coin.

To learn more about investing in physical precious metals, call Capital Gold Group’s office in the Los Angeles area today at (800) 510-9594.

The representatives at Capital Gold Group are not financial advisors and the information provided in this blog should not be considered financial advice. The past performance of gold investments is not indicative of potential future gains.

 

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