15 Precious Metals Terms All Gold Buyers Should Know
If you want to be a part of the precious metal investing world, the first thing you need to know is to get familiar with the language and the terminology. These are some of the most common terms that anyone interested in investing in gold and gold IRAs should master.

1. Assay
It’s a test that determines the purity of the precious metal. This analysis guarantees that the coin or product that you’re acquiring contains the exact amount of gold that it says it has.
2. Bullion
Bullion is the shape that’s given to any precious metal. It can either be a coin, ingot, round, bar, wafer, etc. Bullions are usually made out of almost pure gold. Gold investors, typically don’t trade more than 10 oz. bullions.
3. Circulated / Uncirculated
Refers to a certain condition of the coins. Circulated coins have been used as currency, while uncirculated ones have never been distributed. The second ones are new coins that look brilliant and in optimal conditions.
4. Coin Grading
Coin grading assigns a numeric value to coins and other precious metal objects according to their condition. These grades go from the poorest gold quality (P-1) to a perfect and optional condition (MS-70). The grading system, called The Sheldon Scale, considers color, attractiveness, preservation, luster, strike, and if they’re circulated or uncirculated to define the grade of the coin.
5. Karat / Karat Gold
It’s the measurement of the fineness or purity of the coin. Gold in its highest purity is considered 24 karats. Karat gold indicates the minimum karat amount (10 karats) that a bar should have to be considered gold.
6. Liquidity
This term refers to the facility of selling, buying, or distributing a gold product. The liquidity of a precious metal indicates how easy and in a certain way how soon you’ll be able to turn your investment into cash.
7. Melt Value
Also known as “intrinsic value”, this parameter refers to the exact amount of precious metal that your product contains. This means that if you melt a gold ring that contains 1/4 oz. of gold at a spot price of $100/oz, the melt value of your ring is $25.
8. Mint / Mint Mark
The mint is simply the place or company at which a precious metal bar or coin was fabricated. All gold coins and precious metal products come with a mint mark which is a letter that identifies the facility that produced the object.
9. Numismatics
It’s the field that studies everything related to currency, coins, metallic art, and everything related to these topics. A numismatist is an expert or collector in this field.
10. Premium
The premium is the total price of the precious metal. It’s the melt value plus the costs of fabrication and distribution of the bullion as well as the metal dealer’s fee. It’s usually around 5% to 15% above the spot price of the gold.
11. Spot Price
The spot price is basically the price of gold, silver, or any other precious metal in real-time. It’s the exact price precious metals are sold at that exact moment, so if you’re looking for immediate purchase, that’s the price you’ll get. Spot gold is determined by the latest trades on the futures market.
12. Spread
Is the difference between the selling price (also known as ask) of a coin, ingot, round, bar, or any product and the buying price (also known in the precious metal world as bid) of that same object at the same on the same day. It can be indicated either in dollar amount or percentage.
13. Obverse / Reverse
These terms are pretty much the right way to refer to “heads” or “tails”. The obverse part of the coin is the front part, the side that typically contains a face design, and the reverse is the back part, the one that contains the coin information and its value.
14. Proof
Proof coins are those coins that have a higher grade. They’re shinier, sharper, and more attractive than regular coins. These are the coins that contain special and unique designs to catch the eye of collectors.
15. Purity
Also known as fineness, purity indicates the percentage of gold that your object contains. It can be expressed in percentage or measured in karats.