Glossary for physical gold buyers

Terms

Spot price

The global reference price for pure gold at a given moment, usually in US dollars per troy ounce. It is not what you pay: a dealer adds a premium, and depending on where you buy, sales tax or VAT may apply.

Troy ounce

The unit in which the gold price is quoted: 31.1034768 grams — heavier than an ordinary ounce (about 28.35 g).

Fineness (purity)

The share of pure gold in a product, in parts per thousand. 999.9 means 99.99% gold. 916.7 (22-carat) coins contain less gold per gram, so compare by fine-gold content.

Premium

What you pay above the metal’s spot value. It covers manufacturing, shipping, inventory and the dealer’s margin, and varies by product, quantity and dealer.

Buy–sell spread

The gap between a dealer’s selling price and its buyback price at the same moment. The wider it is, the more the price must rise just to break even.

Buyback

A dealer’s offer to buy your gold back. The buyback price is usually below spot; ask for the formula in writing when you buy.

Allocated storage

Specific bars or coins are recorded in your name, usually by serial number. This ownership is defined by the storage contract — ask to see it.

Segregated storage

Your metal is kept physically apart from other clients’ metal. Storage can be allocated without being segregated, and vice versa.

Unallocated storage

You hold a right to an amount of gold from a general pool — a claim against the custodian, not specific bars. The difference matters most if the custodian fails.

Assay

Professional testing of a metal’s purity and weight. Non-destructive methods (such as XRF) mainly test the surface; a full assay may require sampling.

Assay certificate

A document from the refiner or laboratory stating weight, fineness and serial number. It must match exactly what is stamped on the bar.

Good Delivery

A list and standard for refiners maintained by the London Bullion Market Association (LBMA). The accreditation belongs to the refiner and its bars — not to the dealer selling them or to a vault.

Bullion coin

A coin minted in large numbers and traded mainly on its gold content, unlike a collector coin whose price also depends on rarity.

Minimum storage fee

An annual amount charged even when the percentage fee would be lower. For small holdings it sets the real cost.

All-risk vs liability insurance

“All-risk” cover insures loss of the metal itself, subject to terms; liability cover protects the insured company against claims. Ask who is insured, what type of cover, the limit and the exclusions.

Anti-money-laundering registration

A dealer’s registration with a regulator in a given country for anti-money-laundering supervision. It is not a certification of quality, insurance or investment safety.