Glossary

Fine gold#

The pure gold content of an item, as distinct from its gross weight. Expressed as fineness: 999.9 means 99.99 per cent pure.

A 22-carat coin can contain exactly one troy ounce of fine gold — it is alloyed for hardness and simply weighs more than an ounce in total. “One ounce” on a coin refers to the gold in it, not to what the scales say.

Bullion coin#

A coin minted for its metal content rather than for collectors, issued by or on behalf of a state mint, and priced from the metal quotation plus a premium.

Distinct from a numismatic coin, whose price is driven by rarity and condition. Numismatic value is a market of its own, and it is not what the metal is worth.

Bar#

Gold cast or minted into a rectangular form by a refinery, stamped with weight, fineness and usually a serial number. Refineries may hold accreditations, such as LBMA Good Delivery, which describe the standards their bars are produced to.

Spot price#

The wholesale price for immediate delivery of unfabricated gold, quoted per troy ounce. Retail prices are derived from it: spot plus a premium that covers minting, distribution and the seller's margin.

A retail price is never the spot price, and a seller who implies otherwise is describing something that does not exist.

Spread#

The difference between the price at which a seller sells an item and the price at which the same seller buys it back. It is the real cost of a round trip.

Frequently disclosed only on the buying side. Criterion 5 asks for both sides, before payment.

Allocated and unallocated gold#

Allocated means specific, identified items held on the owner's behalf and kept off the custodian's balance sheet. Unallocated means a claim against the institution for a quantity of metal, where the holder ranks as a creditor.

The distinction is invisible in normal times and decisive in abnormal ones. It is the reason question three is worth asking of institutions you have no reason to distrust.

Tokenized gold#

A digital token recorded on a ledger and representing a claim to gold held by an issuer. The holder's position is the claim; whether it can be exchanged for metal, and at what minimum quantity, is set by the issuer's terms.

Outside the Internet of Fine Gold by criterion 2 — not because of the technology, but because what changes hands is a record.

Internet Investment Gold (IIG)#

An industry term, used by the World Gold Council, for online services through which retail buyers purchase gold that remains stored in professional vaults. The metal is real and generally allocated; the buyer's holding is an entitlement to it rather than an item in hand.

The closest neighbour to this category, and the one it is most often confused with. The difference is criterion 3: whether taking possession is the default outcome or a paid option. Both models are legitimate; they solve different problems.

Buyback#

A seller's undertaking to purchase back what it has sold. Complete terms state three things: what qualifies, the formula that sets the price, and the period within which payment is made.

“We will buy it back” without those three is a sentiment, not a term.

Assay and provenance#

Assay is the determination of an item's fineness. Provenance is the documented chain from the mint or refinery that produced it to the person now holding it. Together they answer whether an item is what it claims to be — the subject of criterion 7.