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Related Terms

Spot Price: The current price that the commodity can be bought or sold and is determined mainly by the London Spot Prices and the US futures market.

London spot fix:
A price per ounce for each of the precious metals (gold, silver, platinum and palladium) determined daily at 10:30 and 15:00 GMT by a brief conference call among the five members of the London Gold Pool (Scotia-Mocatta, Barclays Capital, Deutsche Bank, HSBC and Société Générale). The London spot fix price is the price fixed at the moment when the conference call terminates.

Futures contract:
An agreement to buy or sell a specific amount of gold or silver at a specific time in the future

This indicates that purity of the gold or silver eg. 99.9% gold 

Unit of measures for Gold and Silver

Troy ounce:
Gold and silver are often measured in troy ounces and the price of gold and silver quoted in the stock exchange are all quoted in troy ounces. One troy ounce is equivalent to 31.1034768 grams and it differs from an avoirdupois ounce which is equivalent to 28.3495231 grams. 

Grades of Gold and Silver

18k gold: 18 karat gold which is often also known as 750 gold. The purity of gold in that item is 75%.

22k gold:
22 karat gold which is often also known as 916 gold. The purity of gold in that item is 91.6%.

24k gold:
24 karat gold which is often also known as pure gold. The purity of gold in that item is 99.9%. This is the standard for Gold bullions.

Fine silver:
Often seen as .999 or 99.9% pure silver. This is the standard for silver bullions.

Sterling silver:
Used more often than not for silver jewellery. It’s purity of silver in that item is 92.5%.

Junk silver:
It is an informal term used to refer to silver coins that does not have a numismatic value above the bullion value of silver in it.

Quality of bullion coins

Uncirculated coins (Mint State coins): Refers to coins that are not circulated as a legal tender. They do not have any wear however during the production process of these coins, they might have “bag marks” as they are transported and stored in large canvass bags. Hence these coins have surface scratches and minor blemishes. They are also given a ranking based on their Mint State (MS) and are given a ranked ranging from MS60 to MS70.

Proof coins:
Proof coins are made using specially treated and polished die and each coin are struck more than once to make sure that there are fine details to the coin. The background of proof coins’ normally have a mirror-liked surface and the raised parts of the coin are often frosted. They are also given a ranking based on their proof of these coins ranging from PR60 to PR70. They are sometimes mishandled hence the different ranking for proof coins. Proof coins will cost more than uncirculated coins as more effort and production costs are put into it. Coins that are uncirculated or proof coins have similar gold/silver content.