Precious Metals Investment Glossary

Glossary Sections:   A-D  |  E-H  |  I-N  |  O-R  |  S-Z



Accelerated Supply

Gold which reaches the market through lending and leasing before it has been physically produced.

Account – allocated

An investment account where the client’s metal has been individually identified as belonging to that client, and is physically separated from all the other gold in the vault. Should the holding bank default holding bank, the investor becomes a secured creditor.

Account – unallocated

An investment account where the client’s precious metals have not been specifically identified, and can be lower-priced than an allocated account because some banks do not charge for this storage. The downside is the client carries higher counterparty risk and is an unsecured creditor should the holding bank default.

Advance Premium Forward

A forward contract offering a constant contango throughout the contract’s life and is similar to both a flat rate forward and stabilized contango.

American Option

An option that can be exercised on any day up to and inclusive of it’s expiry date.


Buying and selling a commodity in different markets at the same time to take advantage of price differentials between the markets.


The price at which a metals dealer offers to sell.


Official and standardized tests to determine the fineness and weight of a precious metal.

Austrian 100 Corona

A popular restrike bullion gold coin, with each coin containing .9802 ounce of gold.



The difference between a forward price and a nearby price when the nearby is in excess of the forward.


A physical gold product, either for trading or for accumulation. Bars are available in a large variety of shapes, weights and purities, with different bars being favored in different markets and geographic locations. In the precious metals industry, the words bar and ingot are used interchangeably.


An investor who is expecting prices to fall.

Bear Market

A market seeing an overall downward trend or where market sentiment predicts a downward trend


Bid or buy is the price a dealer is willing to pay for a precious metal. (Ask or sell is the price being offered by the seller for the same metal).


A means for raising debt through the capital markets. Gold-Backed Bonds are paper debt investments backed by Gold.

Boston Options

See Break forward options below.


Shorthand for Brilliant Uncirculated, used to describe a coin that’s in new condition.


An investor expecting prices to rise.

Bull Market

A market where the primary trend is up and sentiment is for it’s continued rise.


Precious metals in the form of bars of at least 99.5% purity. The word originally meant ‘melting place’ or ‘mint’ and derives from the French bouillon, meaning boiling.

Bullion Coin

A legal tender coin of which the market price is dependent on its gold content, as opposed to its rarity, design or face value. (The opposite being numismatic coin)

Boiler Room

Any business using high pressure sales tactics, false or misleading information, or scare tactics, to coerce an investor to make a purchase. Once common in the retail gold market, there are still unfortunately incidences of the practice being reported.

Break Forward Options

Similar to a standard call option, the difference being there is no initial cost.


Any professional agent handling client orders to buy and sell securities, commodities or other property in exchange for a percentage commission and or fees charged for the service.



The Chicago Board of Trade


A right (but not obligation), to buy a commodity or financial security at a specified future date.

Canadian Maple Leafs

Popular bullion coins minted by the Royal Canadian Mint available in Gold, Silver, Platinum and Palladium. See Maple Leafs below for full detail.

Cash Market

See spot market.


The Comex Clearing Association


See the Mexican 50 Peso.

Certificates (gold)

Gold certificates are a way of holding gold without taking physical delivery and are issued by individual banks. They confirm an investor’s ownership but the bank retains physical possession of the metal. Advantages for the client are storage fee savings and a gain in liquidity thanks to being able to sell portions of the holding.


Commodity Futures Trading Commission, the regulatory body in the US covering futures markets.


Brokers or dealers who change their position on an investment in-line with what they consider will lead an investor to enter a transaction.


Any stamped piece of metal (usually of known weight and fineness) issued to enable commerce.

Coin of the Realm

A legal tender coin issued by a government, for general national circulation.

Collector Value

The value of a coin over and above it’s intrinsic value (metal content), or face value – based on rarity and condition.


The New York Commodity Exchange, now a division of NYMEX, the New York Mercantile Exchange. The contracts in the COMEX gold market consist of 100 ounces each, with actively traded contracts being even months of the year.


Legal tender coins or medallions typically minted in gold or silver. Issued to commemorate specific themes, events, places, or people and tend to be collectible (see numismatics)

Commodity Pool

A venture (typically a limited partnership) where investors will contribute funds into a pool used to buy commodities.

Consignment Stocks

A bullion dealer can hold gold on consignment at their client’s premises. The gold will be the dealer’s property until the client withdraws it and pays the prevailing price. Similarly, the metal can be held by the dealer at a local bank until the client purchases.


The difference between a forward price and a nearby price when the forward price exceeds the nearby price. This is the typical case with gold and should there be no constraint along the supply line, the contango will reflects current interest rates and storage fees.


A fall in market prices after a sustained period of price rises.


A term used for the offsetting of a short futures or options position.



A financial instrument derived from a cash market commodity, futures contract, or other type of financial instrument.

Deferred Settlement

Where the settlement of a market contract is deferred by mutual agreement on a daily basis.


The transfer of an asset from the seller to the buyer. Delivery doesn’t necessarily mean physical shipment and can be a paper or digital transaction paper with the physical asset, eg gold bullion, remaining in a specified secure location.


The proportion by which a option’s price changes in response to a change of the underlying asset’s price. Delta measures sensitivity of an option’s price to any changes in the asset’s price.

Delta hedging

Metal bought (sold) by the grantor of a call (put) to cover potential risk. The more the price (of the underlying asset) moves either way, the higher the risk to the opposing party that the option could be exercised against them.


The spreading of investments among differing types of assets, commodities and securities in a bid to minimize risk in any situation.


A gold-silver alloy which is an intermediate product in the extraction of gold from certain mines.

Double Eagles

Popular investment U.S. coins issued between 1850-1933. With $20 face value, the coins containing .9675oz gold, come in two designs – the St. Gaudens and the Liberty.