For the sake of simplicity, “gold” in any of the definitions below can be replaced with silver, platinum, or palladium.
Ingot and bar may be used interchangeably in regards to precious metals.
Not to be confused with bouillon, the French word for broth.
Uncirculated coins are usually in much better condition than circulated ones.
Proof coins have high collectible value in addition to bullion value.
5. Paper gold
Examples: gold ETFs, gold mining stocks, paper gold certificates
6. Spot price
Determined by the price of the metal’s most heavily traded futures contract at the time. Gold at spot price is referred to as spot gold.
Most often expressed as a decimal (“0.999 pure gold”) or percentage (“99.90% pure gold”).
Example: The Canadian Gold Maple Leaf coin has a fineness of 0.9999, meaning it contains 99.99% pure gold.
Using a gold coin as an example, to calculate karats, the mass of pure gold in the coin is multiplied by 24 then divided by the total mass of the coin. One karat represents 1/24 of the whole, so a 22-karat gold coin is 22 parts gold and 2 parts base metals or impurities. 24-karat gold is “pure gold”.
Not to be confused with carat, which in American English is a measure of the weight of diamonds. Read more on karat vs. carat here.
A coin or bar that has been assayed is guaranteed to contain the amount and purity of metal indicated.
10. Melt value
Calculated by multiplying the weight of precious metal in the coin or bar by the spot price of that metal. May also be called intrinsic value.
Example: At a spot price of $1,200/oz., a ½-oz. Canadian Gold Maple Leaf coin, which contains ½ oz. of pure gold, would have a melt value of $600. (Purity must be taken into consideration – another coin of the same weight but lower gold purity would have a lower melt value.)
Spread (percentage) = (Ask – Bid) / Ask
Example: A coin with an ask price of $1,000 and a bid price of $800 has a spread of $200 or 20%.
1-oz. American Silver Eagle coins have high liquidity as they have a large, active base of buyers and sellers.
Facility where precious metal coins or bars are produced.
The United States Mint produces coins at the Philadelphia Mint, the Denver Mint, the San Francisco Mint, and the West Point Mint.
For more information on adding precious metals to an IRA or making a cash purchase, call American Bullion today at 1-800-326-9598 to speak with one of our knowledgeable specialists.
About American Bullion
American Bullion, Inc. specializes in converting IRAs, old 401(k)s, or other qualified retirement plans from paper-based assets to physical gold coins and bars through a Gold IRA rollover or transfer. We’ve pioneered a system to handle all the details for you, tax-free and hassle-free. Interested in buying gold and silver and storing it yourself, outside of your retirement account? Simple – we’ve insured and shipped millions of dollars’ worth of gold, silver, platinum, and palladium to thousands of homes just like yours. As a U.S. Mint nationally listed dealer, we strive to be the best Gold IRA company in the industry and guarantee every transaction is fast, simple, and secure. See our American Bullion Reviews page for testimonials from our many satisfied clients.