Table of Contents
- How to Invest in Precious Metals
- Precious Metals Depository Storage
- Why Should You Include Gold & Silver in Your Savings & Retirement?
- The Stock Markets Best Days Have Passed
- How Can Gold & Silver Help?
- Gold & Silver Offer a Greater Upside Than Equities
- The Rise and Fall of the U.S. Dollar
- Gold/Silver Stocks, ETFs, or Physical Gold & Silver?
- Types of Precious Metals Products
- Frequently Asked Questions
- Glossary of Terms
- Choosing the Right Precious Metals Company
Ask – The “ask price” is the price a precious metals dealer has set for a bar or coin, also known as the selling price.
Bid – The “bid” is how much a dealer is willing to pay to purchase or buy back a coin or bar, the buyback price for a precious metal’s product.
Bullion – Bullion is gold, silver, or other precious metals in the form of bars, ingots, or specialized coins that is said to maintain its worth better than conventional currencies and is therefore kept as a form of emergency currency by both governments and private citizens alike.
Typically, bullion is used for trade on a global market often to hedge devaluation risks that government-backed fiat currencies by design pose. The word “bullion” comes from the French word bouillon, which meant “boiling”, and was the term for the activity of a melting house which creates the ingots or bars from the raw material.
Diversification – A risk management technique that mixes a wide variety of investments within a portfolio.
Fiat Money – Fiat currencies have no intrinsic value and are used solely as payment. Fiat currencies are not backed by any physical commodity but simply derive their value from the strength of the government that issues it.
Karats – This unit measures the purity, also called the fineness, of a precious metal product. The highest level is 24-karat, at which the gold content is at minimum 99.9%. A 22-karat gold coin contains 91.67% gold.
Liquidity – Liquidity measures how easily and quickly an asset can be sold. Gold and silver bullion has a high degree of liquidity because these coins and bars are recognized around the world and accepted across all currency pairings.
Market Value – The market value of a coin refers to the current resale price on the open market. This is not the spot price but the actual value of the particular precious metal coin on the market.
Melt Value – The “melt value” is the value of the precious metal that could be extracted from a coin if it were to be melted down. For example, if you had a coin containing one ounce of silver and the silver spot price was $20, then the melt value of that coin would be $20.
Mint State – Mint State or (MS) stands for the quality and condition of a certified coin. MS ratings range from MS 60 to MS 70 and are issued by independent grading agencies such as the Numismatic Guarantee Corporation (NGC) and Professional Coin Grading Service (PCGS).
Numismatics – In contrast to bullion coins, numismatic coins are rare, collectible coins. Each individual coin can differ widely in price due to rarity, quality, mint date and other factors. These coins are not as closely linked to the precious metal’s spot price and are not allowed in an IRA.
Proof – Proof refers to the unique finish of a particular precious metal coin. Proof coins are double struck and often minted with special dies on a much more limited basis. Proof coins often trade at a significant premium to bullion coins.
Self-Directed IRA – A Self-Directed Individual Retirement Account allows for alternative investments for retirement savings. Self- Directed IRAs can contain traditional investments such as stocks, bonds, and mutual funds as well as physical assets such as gold, silver, platinum, and palladium. These are also referred to as “precious metals” IRAs.
Spot Price – The spot price is the current market price at which an asset is bought or sold for immediate payment and delivery. In the precious metals markets, the spot price most often refers to the price on the global exchange markets such as the COMEX. It can also be thought of as the theoretical value of the metal before it is converted to an investment grade coin or bar.
Troy Ounce – The troy ounce is the standard English measurement for the weight of precious metals. One troy ounce is equal to 1.097 regular ounces or 31.103 grams.