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Term | Meaning
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79 | Atomic number of gold, Au
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100 Mills | Misleading, semi-meaningless, expression usually euphemistically describing gold plated imitation gold coins and bars, typically on auction sites such as eBay. Best avoided.
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Account | Gold held non-physically or on behalf of the owner. Can be "allocated" or "unallocated".
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Advice | It's only sensible to take notice of advice if it's available. We have a whole section aimed at giving reasoned, impartial advice about investing in physical gold. Some dealers advice is geared towards selling you "Value Added" items, on which they make more profit or commission.
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AGW (A.G.W.) | The actual intrinsic fine gold content of a coin.
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Allocated | Gold which is physically marked, reserved, identified, and held for a particular owner. In the event of a default by the holding bank, the investor becomes a secured creditor.
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Alloy, Gold Alloy | Gold which is less than pure, usually used for fabrication of jewellery, and also for circulation coins, as it can posseess better durability.
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Alternative Assets
(Alternative Investment) | An alternative investment is regarded as an investment product other than traditional investments such as stocks, bonds, money markets and / or cash.
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American Option | An option that may be exercised on any day up to and including the expiry date.
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Arbitrage | Buying in one market, and selling a in a different market to take advantage of price differential, for example between different countries or continents.
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Asking Price or Ask | A market trader's indicated selling price, also called "Offer Price". The opposite of "Bid".
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Assay | To test and ascertain the fineness and weight of a precious metal, also the result of such test.
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Asset | A valuable item that is owned. There are different classes of asset including cash or equivalent, hard or tangible assets, and notional or softer assets. We regard gold as approximately equal to cash, but better in some ways.
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Asset Preservation | Protecting and conserving existing wealth should be one consideration in any investment strategy.
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Au | Chemical symbol for gold, from Latin aurum.
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Audit Firms, Auditors, Big Four | The "Big 4" audit companies, previously big 8/6/5, have been involved in faulty valuations, audits, and scandals, such as Enron, and the Banking Crisis.
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Aurum | Chemical name for gold, from Latin aurum.
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Avoirdupois | System of weights for commodities except precious metals, stones, and drugs. One avoirdupois ounce equals 28.35 grams. See "Troy".
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Backwardation | The effect when a future contract value is lower than the spot value. Also the amount of the negative differential.
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Bait and Switch | A con trick, often legal, whereby a company or individual selling investments uses a "loss leader" genuine offer to get you interested, then gets you to switch to a poor value deal on which they make much more profit, or where the follow up is a more profitable deal for them.
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Bank | A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged. The offices or building in which such an establishment is located.
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Bank of England | The central bank of the United Kingdom, sometimes known as "The Bank", or "The Old Lady".
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Bar | Typical gold product, either for trading or for accumulation. Bars come in a variety of shapes weights and purities and different bars are favoured in different parts of the world. In Europe, must be at least .995 fine gold.
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Barbarous Relic | John Maynard Keynes is often misquoted as having called gold a "barbarous relic". What he actually said in a 1923 Tract on Monetary Reform: was "...the gold standard is already a barbarous relic."
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Bear | Someone expecting prices to fall, or taking a short position.
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Bid | Bid or buy is the price a dealer is prepared to pay for gold bullion. Ask or sell is the price at which the dealer or broker is offering to sell.
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Bitcoin | Bitcoin is an innovative payment network and a new kind of money. Invented in 2008. It has already bubbled and crashed. Probably counts as the world's first repetitive bubble.
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Boiler Room | An enterprise that uses high pressure sales tactics, false or misleading information, and scare tactics, generally over the telephone, to sell overpriced or worthless investments to unsophisticated investors.
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Bond | A type of security representing a debt or a loan, usually for a longish period, typically 10 years or more.
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Brand, Branding | The opposite of commoditisation, and therefore normally more relevant to consumers than investors.
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BU (B.U.) | Brilliant Uncirculated, a coin grading term, used to describe a coin in mint condition. Also, since 1982, a production quality of coin from the Royal Mint.
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Bubble | A financial bubble is a significant increase in the price of an asset that does not reflect an increase in its true value. Bubbles are often based on a belief that the asset's price will continue to rise. Often only recognised as such after the inevitable crash.
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Bull, Bullish, Bull Market | An investor or trader who believes market prices will rise. A market in which the primary trend is up.
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Bullion | Refined precious metal in the form of ingots or coins, considered for the intrinsic value of their metal content, including gold, silver, platinum, and palladium. Originally meaning 'melting place' or 'mint', probably from the French bouillon, boiling.
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Bullion Coin | A legal tender coin whose market price depends on its gold content, rather than its rarity or face value.
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Bullshit | An English word, considered taboo by most Americans, but much used by salesmen and marketing men. Self-explanatory.
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Call Option | An option giving the right, but not an obligation, to buy a commodity or a financial security on a specified date in the future.
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Carat | Unit of fineness, scaled from one to 24. 24 carat gold (or pure gold) has at least 999 parts pure gold per thousand (theoretically it should be 1000/1000); 18-karat has 750 parts pure gold and 250 parts other metal, etc.
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Cash | Large payments in actual cash are now strongly regulated in most countries, with different limits, Approximately €15,000 is the upper limit for acceptance in the EU, without the recipient registering to handle larger payments.
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Cash Market | Same as spot market.
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CGT (C.G.T.) | Capital Gains Tax. A UK tax on investment profits. British Gold sovereigns and other coins are exempt as they are classed as sterling.
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Certificate | Gold certificates are a method of holding gold without taking delivery. Issued by individual banks they confirm an individual's ownership while the bank holds the metal on the client's behalf. The client thus saves on storage and personal security issues, and gains liquidity in terms of being able to sell portions of the holdings (if need be) by simply telephoning the custodian.
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Certificates | Many collectors' coins, medallions, and some bars, are issued with a certificate from its issuer stating the dimensions, weights, issue limit, purity, and possibly other information about the item. Sometimes called a COA.
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Chameleon | An American expression for a broker or dealer who changes his position on an investment to what he thinks will cause an investor to enter into a transaction.
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Chard | Chard are one of the UK's leading dealers in gold bullion coins and bars. Established over 50 years. BNTA Founder Member.
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Chards | Chard.co.uk is the new Chards website. One of the UK's leading dealers in gold bullion coins and bars. Established over 50 years.
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CDO (C.D.O.) | Collateralised Debt Obligation, a type of derivative used to resell American sub-prime mortgage risk, for example.
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Clad | In the case of U.S. coins, made of multiple layers of metal, but often used euphemistically and misleadingly meaning plated.
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Coin | A stamped piece of metal issued by a government or currency authority, with a face value, nowadays with a known weight and fineness. a piece of money.
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Collateral | An asset or guarantee lodged or pledged as security against a loan.
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COMEX | The New York COMmodities EXchange. One of the world's major commodities futures exchanges where gold and silver are traded. Now a division of the New York Mercantile Exchange (NYMEX).
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Commodity | 1) A basic good used in commerce or investment that is interchangeable with other commodities of the same type. A homogeneous item.
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Commodity | 2) Commodities are things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer are considered equivalent. It is the contract and this underlying standard that define the commodity, not any quality inherent in the product.
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CFTC (C.F.T.C.) | Commodity Futures Trading Commission, the regulatory body in the US covering futures markets.
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Common Sense | Commonsense is an essential ingredient in most investments, yet something that many investors omit. A very rare commodity!
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Confiscation, 1933 USA | A scare tactic used by many United States coin and bullion dealers to switch-sell or up-sell investors into buying more expensive "rare" coins on which dealers make higher margins, often considerably more.
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Consignment | A bullion dealer may hold gold on consignment at a client's premises. It is the dealer's property until the client withdraws it and pays the prevailing price. Alternatively, it may be held by the dealer at local banks until the clients come forward to purchase and take delivery.
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Contango | The difference between a forward price and a nearby price when the former exceeds the latter. This is the usual situation in gold and if there is no constraint anywhere along the supply pipeline then the contango will reflect prevailing interest rates and storage charges.
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Correction | A change in market price direction, so a decline in prices following a rise in a market, or a rise following a fall. Usually understood to be a normal or positive element in any market.
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Correlation | Correlation is a statistical concept that can show whether and how strongly pairs of variables are related. A single number that describes the degree of relationship between two variables. There are numerous methods to define and calculate the coefficient of correlation.
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Cover | To offset a long or short futures, options or physical position, by closing it out, or completing a complementary trade.
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Credit |
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Credit Rating Agencies, C.R.A. | Standard & Poor's, Moody's Investor Service, and Fitch Ratings, are known as "The Big Three" international CRAs. They have been criticised for Enron's AAA rating before it went bankrupt, AAA structured debt ratings which were then downgraded or defaulted, conflicts of interest, and more.
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Deferred Settlement | A situation in which the settlement of a bullion market contract is deferred by mutual agreement on a daily basis.
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Delivery | The transfer of the asset from seller to buyer. This does not necessarily involve physical shipment but can be done on paper with the bullion remaining in the vaults of a specified bank.
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Delta | The proportion by which the price of an option changes in response to a change in the price of the underlying asset. The delta measures the sensitivity of the option's price to changes in the asset's price.
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Delta Hedging | Metal bought or sold by the grantor of a call or put option in order to cover his potential risk. The more the price of the underlying asset moves in favour of the option purchaser, the higher the risk to the grantor that the option will be exercised against him; he will need to be covered against that risk.
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Denomination | The nominal value given to legal tender coin or currency (for example a gold sovereign coin has a denomination or face value of £1, but will always be bought and sold at a price close to the market price of its gold content.
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Derivative | Any indirect investment, including options, contracts for difference, split risk, and futures. Securities whose prices are based on the prices of another underlying investment. They include futures, options, swaps and warrants.
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Diversification | Diversification is a well known and tested risk management technique, that mixes a variety of investments within a portfolio. Because the fluctuations of a single security or asset have less impact on a diverse portfolio, diversification minimizes the risk from any one investment.
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Doré | A gold-silver alloy, an intermediate product from certain gold mines.
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eBay | This might seem an incongruous entry in an investment gold glossary, and we would agree with this sentiment. In our opinion, real investors should avoid buying gold on eBay, it is more of a lottery.
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Education, Educational | Always a sound investment. The more an individual knows, the better decisions he is likely to make, and the more mistakes he is likely to avoid. Collelcting and studying coins can also be educational.
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Electrum | Electrum is a naturally occurring alloy of gold and silver, and was used in the first ever gold coins issued for King Croesus from about 643 B.C.E.
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EFP (E.F.P.) | Exchange for Physical; a mechanism that allows a client to open or close a futures contract through the physical market when the futures market in question is closed. A dealer will deal for the client in the over-the-counter market and then replace the position with a futures market position when the exchange opens. The differential in the price between the spot and the futures contract is often itself referred to as the EFP.
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Equity | Common or preference financial stock (share). The owners' residual interest in the assets of an enterprise after deducting all its liabilities.
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European option | An option that may only be exercised on the date of expiry. Predominant in the London bullion market.
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Exchange Traded Fund (ETF) | An exchange traded fund is an investment fund traded on stock exchanges, much like stocks (Shares). An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day.
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Face Value | The nominal value given to legal tender coin or currency (for example a gold sovereign coin has a face value of £1, but will always be bought and sold at a price close to the market price of its gold content.
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Fake | A counterfeit, forgery, or other illegal copy, usually of a coin.
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Fabrication | Processes performed to convert raw material, such as pure gold, into usable goods. This can include alloying, rolling, casting, stamping, forming, shaping, assembling, polishing, all of which generally add value.
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Fineness | Gold purity, usually expressed in parts per thousand; thus 995 or two nines five is 995/1000 or 99.5% pure. 995 was the highest purity to which gold could be manufactured when good delivery (q.v.) was determined, but for very high technology applications now it is possible to produce metal of up to 99.9999% purity.
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Fisch Tester | The Fisch ® Fake Coin Identification Gauge is a tool made by Fisch Instruments of South Africa, which is marketed as an easy to use tool which can detect common metal fakes quickly. We have yet to test one, and therefore cannot pass judgement on its accuracy, although we doubt that nay major dealer or coin expert uses it as a prime detection tool.
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Fix | The London gold fixing which takes place twice daily.
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Forward Contract | A principal's (Over the Counter) contract that trades an asset for settlement on a specific date in the future. Each forward contract is 'tailor-made'.
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Fundamentals | Regular and reliable statistics on world production, recycling, supply and demand are available on the website of the World Gold Council, and elsewhere. It is worth looking at these, but assimilating the information can be slightly more daunting and difficult than one would expect.
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Futures | A contract to buy or sell a fixed quantity of a particular commodity, currency or security for delivery at a fixed date in the future at a fixed price. Unlike an option, a contract involves an obligation (not an option) to purchase or sell and can generate indeterminate losses; especially where futures are traded on margin, losses can significantly exceed the cost of the initial investment.
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Gearing | The ratio of an investor's commitment compared with his outlay, or a company's borrowings in relation to its market value, including fixed capital and net bank borrowings.
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GOFO | The Gold Offered Forward Rate, which is the rate at which dealers will lend gold against US dollars.
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Gold | Yellow metallic element, Atomic Number 79; Atomic Weight 196.96655
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Gold Bar | Piece of gold, usually of a specified weight and purity, and with a makers of sponsor's mark.
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Gold Loan | A financing mechanism whereby gold is borrowed from a bullion bank (which has usually borrowed it from a central bank or banks), and sold into the market to raise cash, usually to finance a gold mining operation. The metal is then repaid over an agreed period of time. The interest on the loan is usually paid either in dollars or in gold subject to the agreement between the counter-parties.
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Gold Silver Ratio | A measure of the relative prices of the two bullion and monetary metals.
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Gold Standard | A monetary system based on convertibility into gold. System of paper money backed and interchangeable with gold.
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Good Delivery Bars | Also referred to as large bars, the ingots that conform to London Good Delivery standard.
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Good Delivery Standard | The specification to which a gold bar must conform in order to be acceptable on a certain market or exchange. Good delivery for the London Bullion Market is the internationally accredited good delivery standard. A good delivery bar for London should weigh between 350 and 430 ounces (gold content), of minimum purity 99.5% (two nines five). Further specifications can be obtained from the LBMA.
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Grain | One of the earliest weight units used for measuring gold. One grain is equivalent to 0.0648 grams, or 0.002083367
troy ounces. Often used to mislead ignorant or inexperienced potential buyers.
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Grain 2 | Gold in granular form, either fine or alloyed, principally used by fabricators; not an investment gold product.
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Hallmark | Mark or stamp on consumer jewellery products that identifies the producer, and alloy fineness. Also used on some medallions. Not generally used on bullion products.
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Hedge | The use of derivative instruments to protect against price risk.
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History | If we fail to learn from previous mistakes, we are more likely to repeat them.
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HGE or H.G.E. | Heavy Gold Electroplated, typically used euphemistically and misleading on auction websites such as eBay to describe imitation junk gold coins and bars.
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Identification | Please be aware that for callers to our showroom hoping to buy investment gold we must see two forms of identification. Please see our identification page for further details.
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Inflation | There appear to be many definitions of inflation, but we are not convinced that their authors actually understand what inflation is. We believe that "a reduction in the value or purchasing power of money" would get close.
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Inheritance Tax | In the UK, and many countries, there is an estate duty or similar tax. One way to avoid this is to spend it all first, but there are other tax-planning ideas.
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Initial Margin | The amount of money deposited per option contract at the start of the trade.
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Interest, Interest Rates | A fee paid on borrowed or deposited assets, normally money. Monetary or currency interest rates often have a negative correlation with gold or other precious metal and commodity prices, as they are effectively a competitor investment. If gold is borrowed or lent, interest would normally be paid on it.
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Inversion | Same as backwardation. The effect when a future contract value is lower than the spot value.
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Investment Gold | In the EU, gold which is recognised as a legitimate investment, and as such is exempt from VAT, providing it is bought in the form of recognised bars or coins.
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Karat | American spelling of carat. Unit of fineness, scaled from one to 24. 24 karat gold (or pure gold) has at least 999 parts pure gold per thousand (theoretically it should be 1000/1000); 18-karat has 750 parts pure gold and 250 parts other metal, etc.
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Kilo Bar | A bar weighing one kilogram - approximately 32.1507 troy ounces.
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Know Your Dealer | Buy from a reliable and reputable source, also helpful when selling.
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Krugerrand | Originally (since 1967 and normally), a South African coin containing one troy ounce of fine gold. Fractional sizes were introduced in 1980.
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Lakh | A trading term meaning 100,000, deriving from the Indian word of the same meaning.
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Laundering, Money | The practice of engaging in financial transactions in order to conceal the identity, source, and / or destination of money, and is a main operation of the underground economy. Can apply to tax avoidance and evasion, or other criminal activities.
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Layered | A euphemism for plated.
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LBMA (L.B.M.A.) | The London Bullion Market Association acts as the coordinator for activities conducted on behalf of its members and other participants in the London Bullion Market, and it is the principal point of contact between the market and its regulators.
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Legal Tender | The coin or currency which the national monetary authority declares to be universally acceptable as a medium of exchange; acceptable for instance in the discharge of debt.
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Leverage | Leverage is another term for gearing. Debt financing is used to invest in the company or asset to fund growth. The higher the ratio of debt to equity, the higher the leverage. An Americanism for gearing where companies will use a limited asset base to generate substantial borrowings for speculative or business purposes. Money is borrowed to increase the amount invested to more than 100% of the fund's net asset value.
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Liability | An obligation of arising from past transactions or events. Unlike currencies, physical gold is nobody's liability.
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Liquid | A liquid asset has some or more of the following features. It can be sold (1) rapidly, (2) with minimal loss of value, (3) anytime within market hours. The essential characteristic of a liquid market is that there are ready and willing buyers and sellers at all times. An elegant definition of liquidity is also the probability that the next trade is executed at a price equal to the last one. A market may be considered deeply liquid if there are ready and willing buyers and sellers in large quantities.
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Liquidity | The quality possessed by a financial instrument of being readily convertible into cash without significant loss of value.
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Limit, Limit Order | An order placed by a client for a transaction to be executed at a specified price. The order is triggered if the market touches that price (or betters it).
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Limited Edition | Most commemorative coins are issued with an issue limit, in an effort to enhance their appeal to collectors and investors.
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Loco | The place at which gold is held and to which a delivery price applies. London is the common denominator world-wide and represents the basis for international trading and settlement in gold and silver.
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London Gold Fixing | Same as fix.
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London Mint Office | A coin marketing company with a misleading name, high prices, and generally misleading and inaccurate descriptions.
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Long Position | The purchase, ownership of an investment with the expectation of an increase in its price.
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Lot | Alternative term for a futures contract.
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Magnets, Magnetism, Magnetic Gold | Pure gold is not magnetic, but alloys can be. Some charlatans sell neodymium magnets as gold testers.
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Maintenance Margin | A sum that must be maintained on deposit throughout the life of the trade.
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Margin | The minimum amount that a client must deposit in cash or securities, when borrowing to buy securities or trade in futures or options. In futures markets a deposit normally equivalent to 10% of the contract value is required.
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Margin Call | Money that is called for from the client during the life of the transaction to cover exposure resulting from an adverse price movement (or an endemic increase in margins by the exchange).
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Mark to Market | The valuation of an open position as at current price levels.
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Market Maker | A dealer who makes a market, i.e. quotes bid and offer prices to counter-parties and is prepared to deal at those prices.
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Market Value | The price at or around which something trades, whether a commodity, bullion item or a coin.
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Medal or Medallion | A metal object resembling a coin but with no legal tender, or face value. A medallion may be issued by a government or private mint.
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Mini (gold coin) | Usually a pathetically small, poor quality, base metal imitation of the real thing.
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Modern Issue | A coin, medal, or medallion recently issued, usually at a relatively high premium. Not usually considered for investment because it contains elements of high production and marketing costs.
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Money Laundering | The practice of engaging in financial transactions in order to conceal the identity, source, and / or destination of money, and is a main operation of the underground economy. Can apply to tax avoidance and evasion, or other criminal activities.
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Naked Short | A seller of a contract who does not have the metal to back up his position.
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Neodymium Gold Tester | Some people advertise neodymium magnets for sale as gold testers. It would be foolish to rely on them, see our page about magnets.
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New Issue | A coin, medal, or medallion newly or recently issued, usually at a relatively high premium. Not usually considered for investment because it contains elements of high production and marketing costs. See Modern Issue.
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Nordic Gold | A base metal alloy used for the new euro mid value coins. A misnomer, contains no gold.
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Numismatic | Coins valued for their rarity, condition and beauty beyond the intrinsic value of their gold content. Generally, premiums for numismatic coins are higher than for bullion coins.
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Obverse | The main or "head" side of a coin.
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Open Interest | The number of contracts (long and short) outstanding in any one futures contract.
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Options | An option is the right, but not the obligation, to buy (call option) or sell (put option) a financial asset at a predetermined price (called the exercise price or strike price) at some particular date in the future. The option price will depend on the prospects of changes in the price of the underlying security to which it relates. In a 'European' option the buyer only has the right to exercise the option on the expiry date, whereas an 'American' option may be exercised at any time up to the expiry date. In both cases, however, they can be traded rather than exercised at any time.
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Option Premium | The price paid for an option is known as the premium; the strike price is the pre-determined price at which an option may be exercised.
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Option Strike Price | The strike price is the pre-determined price as which an option may be exercised.
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OTC (O.T.C.) | Over - The Counter, or a principals' contract. The over-the-counter gold market trades on a 24-hour per day continuous basis and accounts for the bulk of global gold trading. Most OTC trades are settled using gold stored in London, irrespective of the country where the deal is actually transacted.
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Ounce (Troy) | The standard weight in which gold is quoted in the international market, weighing 31.1035g (see also our Weights Conversion table). Named after the old French city of Troyes, where there was an annual trading fair in mediaeval days and where this was a unit of weight.
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Pennyweight | An American unit of weight for gold. Twenty pennyweights equal one troy ounce.
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Physical Holding | Tangible hard assets such as gold coins or gold bars held as such rather than in third party storage in exchange for paper.
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Pleasure | It's worth remembering why you are investing, so don't forget to enjoy life while you are investing or making money.
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Portfolio Diversification | A risk management technique, related to hedging, that mixes a wide variety of investments, or investment types, within a portfolio. Because the fluctuations of a single security have less impact on a diverse portfolio, diversification minimizes the risk from any one investment.
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Pre - 1933 | This is a bogeyman brought out usually by American dealers to scare their customers into buying older, more expensive coins, because the US government once made an immoral grab of its citizens hard assets. The British government also did similar with the 1947 Exchange Control Act.
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Premium | The amount or percentage a coin, bar, or other item sells over its intrinsic value. Some dealers quote premiums over "ask" price rather than "middle", thereby inflating the actual premium.
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Rally | An price increase following a decline in a market, i.e. a positive correction.
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Red Gold | Pure gold is yellow of course, but when alloyed with copper, it can and does take on a coppery red colour.
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Relationship | If you cane stablish a good relationship with a reliable and reputable dealer, this should help you to buy and sell better.
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Reporting Requirements | In most countries, there are anti-money-laundering laws, which require dealers to register, and report transactions over varying threshold values.
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Research | Although large professional investment and financial enterprises may be able to afford intensive research, they still come unstuck over sub-prime loans, banking illiquidity, and more. The small investor may not have the same deep resources, but some background reading can pay dividends. One example would have been to read the book Wake Up.
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Restrike | A coin issued later than its apparent date, usually with official sanction.
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Reverse | The secondary or "tail" side of a coin.
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Rhodium | A rare precious metal which is a member of the platinum group of metallic elements.
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Rhodium-Platinum | There is no such thing. It is a figment of the fertile imagination of the London Mint Office.
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Selling Short or Shorting | Selling a commodity you do not own in the expectation of being able to buy it later at a lower price.
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Scam | Confidence trick or swindle. Where these is money, there will be scammers. We feel many dealers give misleading or borderline advice and take unfair advantage over inexperienced investors.
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Settlement Date | The date on which a contract is scheduled for delivery and payment. Spot settlement between professionals in the bullion market is two days after the bargain has been struck.
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Shares | A share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships. One of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends, and to a portion of the value of the company in case of liquidation.
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Short Position | A trader in securities is said to have established a short position when the sales made by the trader exceed holdings, i.e. the trader is selling securities that he or she does not possess. This is done in anticipation that the market will fall so that those securities sold short can be covered (i.e. bought) at a lower price.
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Short Covering | The closure of short positions.
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Slab, Slabbed, Slabbing | Sealing of coins in plastic capsules, usually after independent third party grading compnay such as NGC, PCGS or CGS UK. Usually done to enhance the price, therefore counterproductive for investment purposes.
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Small Bar | Any gold bar smaller than a London Good Delivery Bar, usually 1 kilo or less.
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Sovereign | British gold coin, first issued in 1489, and in its current form since 1817. Still in production, and one of the world's best known gold bullion coins.
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Specimen | Word previously used by the Royal Mint to denote coins which we would now describe as proof.
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Speculative Long | A trader who has bought a forward or future in the expectation of closing it out at a higher rice.
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Speculative Short | A trader who has sold a forward or future in the expectation of buying it back at a lower price.
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Spot Deferred | A forward contract in which the contracts may be rolled forward as they mature. Delivery dates are specified in the same way as for any forward contract, but as each contract comes to maturity it may be rolled forward using current interest rates.The facility is, however, set up to terminate within a pre-determined maximum period (a client may, for example, roll forward every three months for up to ten years). This is also known as a floating rate forward.
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Spot Price | The current open market price for "immediate" delivery, this normally being two working days in the physical gold market. The current month in "futures" markets.
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Spread | The difference between Bid (the price a buyer is prepared to pay for gold) and Ask (the price at which a seller offers to sell) prices.
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Stale Bull | Speculator who has bought a commodity or trading instrument in the expectation of price rises and then sells on disappointment at the market's failure to fulfil his expectations.
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Stale Bull Liquidation | Selling of a long position by a disappointed bull when the price has not performed up to his expectation.
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Stocks | American word for share. A share (also referred to as equity shares) of stock represents a share of ownership in a corporation. Also devices used since medieval times for public humiliation, corporal punishment, and torture, which could equate to the same thing for holders of stocks in Marconi, Enron, Northern Rock, and many other companies!
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Stop Loss. Stop Loss Order | An order that will close out a loss making position when the price reached a specific level. Such trades are carried out on a best efforts basis, since it cannot be guaranteed that a specific price will be traded if the markets are moving rapidly (as they often are when large amounts of stop losses are triggered).
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Storage | Gold is very compact, and can be stored very efficiently. Some dealers offer storage, we do not.
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Strategic | An investment that a corporation or affiliated firm makes in a young company that offers to bring something of value to the corporation itself. The aim may be to gain access to a particular product or technology that the start-up company is developing, or to support young companies that could become customers for the corporations products. In venture capital rounds, strategic investors are sometimes distinguished from financial investors - venture capitalists and others who invest primarily with the aim of generating a large return on their investment. Long term, planned.
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Strike Price | The fixed price at which the owner of an option can purchase, in the case of a call, or sell, in the case of a put, the underlying security or commodity.
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Tactical | Using short term views, or acting in accordance to changing or current market conditions.
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Term | The tenor, or length of time until expiry, of a contracted transaction.
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Tonne | One thousand kilogrammes (1,000 kgs = 1,000,000 grams), one megagram , equal to 2204.622 622 lbs avoirdupois. Also called metric tonne or MT.
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Treasury Bill | A short term (less than one year) government zero coupon bond (UK).
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Troy Ounce | The standard weight in which gold is quoted in the international market, weighing 31.1035g (see also our Weights Conversion table). Named after the old French city of Troyes, where there was an annual trading fair in mediaeval days and where this was a unit of weight.
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Tungsten | Metallic element with symbol W and atomic number 74; also called Wolfram, from where it gets its chemical symbol. It has a density of 19.250 which is close to that of gold 19.300; as a result it has been used to create gold bars and coins, but is not particularly convincing, and should not fool any normal sensible person.
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Unallocated | An account in which the client's bars are not specifically ring-fenced, and which may be cheaper than an allocated account as some banks do not charge for storage. The client carries higher counterparty risk, however, as he is an unsecured creditor in the event of a default by the holding bank.
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Value Investing | The expression 'Value Investing' was coined by Graham and Dodd of Columbia Business School in 1928. Its most notable modern exponent is Warren Buffet of Berkshire Hathaway
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Volatility | A measure of the changeability of a commodity's price. The standard deviation of the change in value of a financial instrument with a specific time horizon. It is often used to quantify the risk of the instrument over that time period. Volatility is typically expressed in annualized terms, and it may either be an absolute number ($5) or a fraction of the mean (5%). Volatility can be traded directly in today's markets through options and variance swaps.
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Warrant | A securitised product issued by a specific bank or securities house and usually carrying the name of the issuer, which gives the purchaser the right to buy gold at a certain price on a specific date. They are thus not dissimilar to options, but the pricing mechanism is generally simpler. Options are a generic instrument and would not be specifically tied to one house.
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Wolfram | Metallic element with symbol W and atomic number 74; also called Tungsten. It has a density of 19.250 which is close to that of gold 19.300; as a result it has been used to create gold bars and coins, but is not particularly convincing, and should not fool any normal sensible person.
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Writer | Alternative terms for the seller of an option (whether it is a put or call is irrelevant).
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XAU | XAU is the ISO code for spot gold.
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XRD | X-Ray Diffraction, a relatively modern, high tech method of testing metals, including precious metals.
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Yellow Metal | Gold
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Yield | The rate of return, expressed as a percentage, paid on an investment.
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