Gold and Silver Terms You Should Know
Solomon Global explains key gold, silver and precious metal terms for investors and enthusiasts.
Gold and silver terms A — C
Alloy — A mixture of metals often including gold or silver. For example, full and half gold Sovereigns are struck in a 22-carat gold-copper alloy known as “crown gold”. Alloying is often done to improve strength or durability.
Assay — A test to determine the purity and composition of a precious metal. Buyers should ensure that their gold products come with assay certificates verifying the purity and authenticity of the metal.
Aurum — The Latin word for gold, often used in scientific and historical contexts. It is the source of gold’s chemical symbol ‘Au.’
Bag marks — Small scratches or dings on coins caused by contact with others in storage bags.
Base metal — A non-precious metal, such as copper or nickel, often found in coins and alloys.
Bi-metallic coin — A coin made from two different metals such as the UK £2 coin.
Bullion — Gold Bullion is a highly pure form of investment-grade gold, with a typical fineness of 999 or 99.9%. Gold Bullion is available as both bars and coins. Find out more here.
Capital Gains Tax (CGT) — Capital Gains Tax is a tax on the profit when you sell an ‘asset’ that’s increased in value. However, UK legal tender gold coins minted by the Royal Mint, such as Britannias, Sovereigns, Royal Arms, Tudor Beasts or Queen’s Beasts are exempt from CGT, meaning any profit you make when selling them is tax-free, regardless of the amount.
Circulated coin — A coin that has been used in transactions and shows signs of wear.
Commemorative coin — A special edition coin minted to mark a specific event or anniversary. For example, the Graded 2023 Coronation of His Majesty King Charles III 1oz Gold Coin holds tremendous commemorative significance, symbolising the continuity of the British monarchy.
Gold and silver terms D — J
Denomination — The face value of a coin as issued by the mint.
Devil’s metal — A nickname for silver due to its history of price volatility and speculation. Traders associate its swings with high risk, unlike gold, which is seen as a more stable asset.
Double Eagle — A historic U.S. $20 gold coin minted between 1849 and 1933.
Electrum — A naturally occurring alloy of gold and silver.
Engraving — The detailed carving of a coin’s design onto a minting die.
Face value — The official monetary value assigned to a coin.
Fiat currency — Government-issued money not backed by a physical commodity such as gold or silver.
Fine gold — Gold that is at least 99.9% pure.
Fine silver — Silver that is at least 99.9% pure.
Fineness — The proportion of precious metal in an alloy, expressed as parts per thousand.
Fleur de Coin (FDC) — A term used for a coin in absolutely perfect condition that is a mint state.
Gold standard — The gold standard was a monetary system/idea first launched by Germany at the end of the 19th century, and by the beginning of the 20th century, it was quickly adopted by most developed nations. The central premise of the gold standard was that it would directly link the value of a country’s currency to the value of gold, and as a country-issued currency, they would ‘back’ that issue with the purchase of physical gold.
Hallmark — A stamp or mark indicating the purity and origin of gold or silver.
Incuse design — A coin design that is pressed into the surface rather than raised.
Gold and silver terms K — R
LBMA — London Bullion Market Association (LBMA). This organisation sets standards for gold and silver bullion, and dealers associated with it adhere to strict guidelines.
Legal tender — Coins or notes that are officially recognized for payment of debts.
Metalor — An LBMA-approved refiner, founded in the canton of Neuchâtel in Switzerland in 1852, whose bars are amongst the best quality available.
Mint mark — A small symbol or letter indicating which mint produced a coin.
Mintage — The total number of coins produced in a specific series or year.
Numismatics — The study and collection of coins, banknotes, and medals.
Obverse — The front side of a coin, typically featuring a ruler or national symbol. All modern British coins feature a profile of the current monarch’s head on the obverse (heads).
Opportunity cost — the value of the next best alternative that is forgone when making a decision. It represents the benefits missed out on when choosing one option over another.
Proof coin — The highest quality of coin that a mint produces. Proof coins are struck using special dies, which stamp images onto the metal.
Gold and silver terms S — Z
Safe deposit box — A bank-secured storage option for precious metals.
Silver Thursday — The financial crisis that occurred on March 27, 1980, when the Hunt brothers attempted to corner the silver market. Their aggressive accumulation of silver drove prices to record highs before a sharp collapse.
Slabbed Coin — A coin sealed in a protective plastic case by a grading service.
Sovereign — A British gold coin first minted in 1489 and still produced today. Gold sovereigns featuring Queen Elizabeth II are among the most popular bullion products from The Royal Mint.
Specimen coin — A coin struck to higher standards than circulation coins but below proof quality.
Spot price — The spot price is the price a commodity is trading at in the current market. The ‘premium’ is the additional costs on top for distribution, fabrication, and nominal dealer fees. The 1oz Gold American Eagle Coin 2023, like many of the products that Solomon Global offers is available at a low premium above the gold spot price.
Sterling silver — An alloy with 92.5% silver and 7.5% other metals, typically copper.
Struck coin — A coin that has been imprinted with a design using a die press.
Tarnish — A surface discolouration on silver caused by oxidation.
Troy ounce — A standard unit for measuring precious metals, equal to 31.1 grams.
Uncirculated coin — A coin that has never been used in transactions and shows no wear.
Vaulted gold — Gold stored securely in a professional vault on behalf of an owner.
White gold — An alloy of gold mixed with white metals like nickel or palladium.
Let us know any other definitions you would like adding in the comments below.
