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Bullion Market Terms

Assay: To test a metal for purity.

Bid/Ask: Bid or buy is the price a dealer will pay for gold bullion coins. Ask or sell is the selling price offered by a dealer.

Bullion: Uncoined gold usually in the form of bars, wafers or ingots.

Bullion Coin: A legal tender coin whose market price depends on its gold content, rather than its rarity or face value.

Cash Price: Price required for immediate settlement since most gold purchases are cash transactions. Also known as "spot price."

Face Value: The nominal value given to legal tender coin or currency (i.e., a 1-oz gold American Eagle has a face value of $50).

Four Nines: Bullion with a fineness of .9999 - the purest metal available.

Karat: Unit of fineness, scaled from one to 24. 24-karat gold (or pure gold) has at least 999 parts pure gold per thousand; 18-karat has 750, etc.

Legal Tender: The coin or currency which the monetary authority of a country declares to be universally acceptable therein as a medium of exchange; acceptable in the discharge of debts.

Liquidity: The quality of being readily convertible into cash.

"London Fix": Twice-daily bidding Session in London of the five major gold traders, at which the price is fixed or set. The London Fix is the basis for many gold contracts worldwide.

Numismatic: Coins which are valued for their rarity, condition and beauty beyond the value of their gold content. Generally, premiums for numismatic coins are higher than for bullion coins.

Pennyweight: A pennyweight (abbreviated dwt) is a unit of mass that is equal to 24 grains, 1/20 of a troy ounce, 1/240 of a troy pound, approximately 0.054857 avoirdupois ounce and exactly 1.55517384 grammes.

Premium: In gold coinage, the amount by which the market value of a gold coin exceeds the actual spot value of its gold content. Part of the premium is recovered by the seller at resale.

Spread: Represents the difference between Bid and Ask prices.

Troy Ounce: A unit of weight, equal to about 1.1 avoirdupois (ordinary) ounces. The word ounce when applied to bullion, always refers to troy ounces.

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