Getting into the precious metals market can be daunting. Everything is new, including the jargon, so it is wise to get a head start on learning the ins and outs. Here are some of the lingo used by traders and investors all over the world:
1. Bullion- Raw precious metals usually in the form of coins and bars. Not to be confused with bouillon, the French soup.
2. Certified- Raw precious metal that has been graded by a third-party service (usually PCGS or NGC). The scale goes up to 70.
3. Circulated/Uncirculated- Circulated currency has been handled by the public for commercial reasons. Uncirculated coins have never been in the hands of the public or used as currency, so they are inherently in better condition.
4. Fineness/Purity- This refers to the amount (percentage) of precious metals content is in the product. Most of the time, the metals have .999 fineness. Canadian Maples, however, have .9999 fineness.
5. Spot Price- The live trading price of precious metals. The price of metals changes constantly throughout the day.
6. Premium- The amount of money on top of the spot price.
7. Troy Ounce- The unit of measure in precious metals. 1 Troy ounce= 1.0971 ounces.
8. Karat- Not to be confused with Carat (the weight of gems), it is commonly used for the purity of gold. 24 karat gold is the standard at 100% pure gold.
9. Numismatics- The study of physical currency. A person that studies numismatics is a numismatist.
10. Obverse/Reverse- The front/back of a coin or round.