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Glossary with Definitions of Precious Metals Terms
Definitions of some common precious metals terms.
ASK: a coin or bar’s selling price.
BID: a coin or bar’s buyback price.
BULLION: platinum, gold or silver in the form of bars, coins or ingots.
BREAK EVEN: the percentage gain a coin or bar’s bid price must increase to equal the original ask or selling price.
Break Even = (Ask – Bid)/Bid
MELT VALUE: the value of a coin or bar. The Melt Value is calculated by the amount of metal multiplied by the spot price of the metal. For example, if a coin contains one ounce of gold and the spot price is $1,500 per ounce, the melt value of the coin is $1,500.
OBVERSE: the front or "heads" side of a coin.
PREMIUM: the amount charged above a coin or bar’s melt value.
REVERSE: the back or "tails" side of a coin.
SPREAD: the difference between a coin or bar’s ask (selling) price and its bid (buyback) price. For example, if a coin’s ask price is $1,000 and its bid price is $720, the spread is $280 or 28 percent. The spread is different from the markup.
Spread = (Ask – Bid)/Ask
SPOT PRICE: a market indicator that essentially reflects the price paid for a precious metal based upon immediate delivery. It can be construed as the theoretical value of the metal before converted into a bar or coin.