Precious Metals Glossary
This glossary defines the words you will meet when buying, storing, holding or selling physical gold, silver, platinum and palladium. Each entry is a short, plain-English definition, and where we have a full guide on the topic, the term links to it.
A
Allocated storage — Storage in which specific, identifiable bars or coins are held for you. Compare with unallocated storage, where you hold a claim on a quantity of metal. See storage options compared.
American Gold Buffalo — A U.S. Mint one-ounce gold bullion coin struck in .9999 fine gold. See the American Gold Buffalo guide.
American Gold Eagle — The U.S. Mint's flagship gold bullion coin, made of 22-karat gold alloy. It is IRA eligible under a specific statutory exception for American Eagle coins. See the American Gold Eagle guide.
American Silver Eagle — The U.S. Mint's one-ounce .999 fine silver bullion coin. See the American Silver Eagle guide.
Ask price — The price at which a dealer will sell to you. Also called the offer price.
Assay — Testing a metal to determine its purity. An assay card is a sealed card from the refiner certifying a bar's weight and fineness.
B
Bar — A rectangular piece of refined metal stamped with its weight, fineness and maker. See gold bars and silver bars.
Beneficiary — The person or entity named to receive an account, such as a metals IRA, at the owner's death. See beneficiaries and inheriting a metals IRA.
Bid price — The price at which a dealer will buy from you.
Bretton Woods — The 1944 international monetary agreement that pegged currencies to the U.S. dollar, which was convertible to gold for foreign governments. See history of the gold standard.
Britannia — The Royal Mint's bullion coin series, struck in gold and silver. See Gold Britannia and Silver Britannia.
Bullion — Precious metal valued mainly for its metal content, in the form of bars, rounds or bullion coins.
Buyback program — A dealer's offer to purchase metals back from customers. Terms vary; read them in writing. See how buyback programs work and the Goldco buyback program.
C
Cast bar — A bar made by pouring molten metal into a mould, usually with a rougher surface than a minted bar.
CFTC — The Commodity Futures Trading Commission, the federal regulator of U.S. futures markets, which also pursues commodity fraud. See what the CFTC warns about precious metals fraud.
Coin grading — Assessment of a coin's condition, typically on a 1–70 scale, by services such as NGC and PCGS. See coin grading explained.
Collectible — For tax purposes, a category that includes precious metals, art and similar items. IRAs generally cannot hold collectibles, except for qualifying bullion. See the collectibles rule.
Collectibles tax rate — The maximum 28% federal rate on long-term gains from collectibles held outside retirement accounts. See taxes on selling physical gold.
COMEX — The CME Group's metals futures exchange, where gold and silver futures trade.
Commemorative coin — A coin issued to mark an event or theme, often in limited quantities and at higher premiums. See commemorative and limited-mintage coins.
Commingled storage — Depository storage in which your metal is held together with identical items owned by others. See segregated vs non-segregated storage.
Cost basis — Generally what you paid for an asset, including acquisition costs, used to calculate gain or loss when you sell. See record-keeping for precious metals.
Custodian — The IRS-approved trustee or institution that administers a self-directed IRA. See precious metals custodians.
D
Depository — A secure, insured facility that stores precious metals. See depositories explained.
Direct rollover — Retirement funds moved straight from one plan or IRA to another without being paid to you. See direct vs indirect rollovers.
Distribution — Money or property taken out of a retirement account. See taking distributions from a metals IRA.
Dollar-cost averaging — Buying a fixed amount at regular intervals. See buying gold on a regular schedule.
E
Executive Order 6102 — The 1933 order requiring most Americans to deliver gold coin, bullion and certificates to the Federal Reserve.
Eligible metals — Coins and bars that meet IRS fineness rules and can be held in an IRA. See eligible gold coins, eligible silver coins and eligible bars.
F
Face value — The nominal monetary value stamped on a legal tender coin, usually far below its metal value. See legal tender bullion coins.
Fineness — The share of pure metal in a coin or bar, expressed in parts per thousand, such as .999. See gold purity, fineness and karats.
Form 1099-B — An information return dealers file for certain sales of specified metals. See when sales get reported.
Form 1099-R — The form reporting distributions from retirement accounts.
Form 5498 — The form a custodian files reporting IRA contributions, rollovers and fair market value.
Form 8300 — The form a business files when it receives more than $10,000 in cash in one transaction or related transactions.
Fractional coin — A coin weighing less than one troy ounce, such as one-tenth or one-quarter ounce. See fractional gold coins.
G
Gold Maple Leaf — The Royal Canadian Mint's .9999 fine gold bullion coin. See the Gold Maple Leaf guide.
Gold Reserve Act — The 1934 law that transferred monetary gold to the U.S. Treasury and revalued gold.
Gold standard — A monetary system in which currency is convertible into a fixed amount of gold. U.S. gold convertibility for foreign governments ended in August 1971. See history of the gold standard.
Gold-to-silver ratio — The number of ounces of silver equal in price to one ounce of gold. See the gold-to-silver ratio.
Good Delivery — LBMA standards for large bars traded between wholesale market participants, and the list of refiners that meet them.
H–I
Hallmark — Markings on a bar or coin showing its maker, weight and fineness.
Home storage IRA — An arrangement promoted for keeping IRA metal at home. IRS rules generally require a custodian to hold IRA assets. See home storage risks.
In-kind distribution — Taking physical metal out of an IRA instead of cash. See in-kind distributions.
Indirect rollover — A distribution paid to you that you redeposit into an IRA, generally within 60 days. See the 60-day rollover rule.
Inherited IRA — An IRA received by a beneficiary after the owner's death. See inherited IRAs and precious metals.
J–K
Junk silver — Pre-1965 U.S. dimes, quarters and half dollars containing 90% silver. See junk silver.
Kangaroo — The Perth Mint's gold bullion coin series. See the Australian Gold Kangaroo guide.
Karat — A measure of gold purity out of 24 parts; 24-karat is pure gold and 22-karat is about 91.67%.
Krugerrand — South Africa's 22-karat gold bullion coin. Its fineness is below the IRS standard for IRAs. See the Krugerrand guide.
L
LBMA — The London Bullion Market Association, the trade body for the London wholesale gold and silver market.
LBMA Gold Price — A benchmark gold price set twice each London business day through an electronic auction. See how gold prices are set.
Legal tender — Money recognised by law for paying debts; government bullion coins are legal tender at face value.
Limited mintage — A coin produced in a capped quantity, often sold at a higher premium.
Liquidity — How quickly and cheaply an asset can be sold near its market value.
M
Mint — An organisation that strikes coins. Sovereign mints are government-run; private mints produce rounds and bars. See sovereign mints and private refiners.
Minted bar — A bar cut and struck from a sheet of metal, usually with a polished finish and often sold in tamper-evident packaging.
Mintage — The number of coins of a given design and year produced.
N–O
NGC — Numismatic Guaranty Company, a third-party coin grading service.
Numismatic coin — A coin valued for rarity, condition or history beyond its metal content. See numismatic vs bullion.
One-rollover-per-year rule — The limit of one indirect IRA-to-IRA rollover in any 12-month period. See the one-rollover-per-year rule.
P
Palladium — A platinum-group metal used heavily in vehicle catalytic converters. IRA-eligible palladium must be at least .9995 fine. See palladium coins and bars.
PCGS — Professional Coin Grading Service, a third-party coin grading service.
Philharmonic — The Austrian Mint's bullion coin series. See the Gold Philharmonic guide.
Platinum — A dense, rare metal with major industrial uses. IRA-eligible platinum must be at least .9995 fine. See platinum coins and bars.
Precious metals specialist — The title Goldco uses for its staff, who explain products and process. They are not licensed to give financial, legal or tax advice. See what Goldco's specialists do.
Premium — The amount paid above a product's metal value at spot. See premiums and spreads.
Prohibited transaction — A forbidden dealing between an IRA and its owner or related parties, such as personal use of IRA assets. See prohibited transactions with IRA metals.
Proof coin — A coin struck with specially prepared dies for a mirror-like finish, sold at a higher premium than bullion. See proof vs bullion coins.
Purchase agreement — The contract covering price, payment, delivery and cancellation. See reading a purchase agreement.
R
Refiner — A company that purifies metal and produces bars.
Required minimum distribution (RMD) — The minimum amount IRS rules require to be withdrawn annually from certain retirement accounts once the owner reaches the IRS-defined age. See RMDs and precious metals.
Rollover — Moving retirement funds from one plan or IRA to another. See the rollovers hub.
Roth IRA — An IRA funded with after-tax money whose qualified distributions are tax-free. See holding gold in a Roth IRA.
Round — A coin-shaped piece of bullion made by a private mint, with no face value. See gold rounds vs coins.
S
Segregated storage — Storage in which your specific items are kept separate from other customers' metal.
Self-directed IRA — An IRA whose custodian permits alternative holdings such as physical metal. See self-directed IRA basics.
SEP IRA — A Simplified Employee Pension plan for self-employed people and small employers. See precious metals in a SEP IRA.
SIMPLE IRA — A retirement plan for small employers. See precious metals in a SIMPLE IRA.
Silver Maple Leaf — The Royal Canadian Mint's .9999 fine silver bullion coin. See the Silver Maple Leaf guide.
Spot price — The current market price for immediate delivery of one troy ounce of raw metal. See gold spot price explained.
Spread — The difference between a dealer's buying and selling prices for the same item.
Step-up in basis — The general rule that inherited property takes a basis equal to its fair market value at the owner's death. See precious metals and estate planning.
Structuring — Illegally splitting cash transactions to avoid reporting thresholds.
T
Transfer (trustee-to-trustee) — Moving IRA assets directly between custodians, which does not count toward the one-rollover-per-year limit. See trustee-to-trustee transfers.
Troy ounce — The standard unit for precious metals, equal to 31.1035 grams. See what is a troy ounce.
U–W
Unallocated storage — An arrangement where you own a claim on a quantity of metal rather than specific items, which may expose you to the provider's credit risk.
Uncirculated — A coin that has not been used in commerce. "Brilliant uncirculated" is a common bullion finish.
Withholding — Tax held back from a distribution. Eligible rollover distributions from employer plans paid to you are subject to 20% mandatory withholding. See tax withholding on rollovers.
Frequently Asked Questions
What is the difference between fineness and karat?
Both measure purity. Fineness uses parts per thousand, such as .999; karats use parts per 24, so 24-karat gold is pure gold.
Is a troy ounce the same as a regular ounce?
No. A troy ounce is 31.1035 grams, about 10% heavier than the avoirdupois ounce used for everyday goods.
What is the difference between a coin and a round?
A coin is issued by a government mint and has a face value; a round is privately made and is not legal tender.
Where can I learn about a specific company's terms?
Read the company's own written terms. For one example, our Goldco review explains how that precious metals company works.