Essential Terms
Spot Price
The current market price for immediate delivery of a commodity, derived from futures contracts. This is the base price you see quoted on financial news.
What it means for you: Spot price is a reference point, not the price you'll actually pay. Physical metal always costs more due to premiums.
Premium
The amount above spot price you pay for physical metal. Covers mining, refining, minting, distribution, and dealer margins.
What it means for you: Compare premiums, not just total prices. A $50 coin with a $3 premium is better than a $48 coin with a $5 premium.
Bullion
Precious metal valued by weight and purity, not collectibility. Includes bars and standard coins like American Eagles. Lowest premiums, highest liquidity.
What it means for you: This is what you want for wealth preservation. Value tracks metal content, not collector stories.
Troy Ounce
The standard measurement for precious metals. 31.1 grams, heavier than a standard ounce (28.35g). All gold/silver prices are quoted in troy ounces.
What it means for you: When comparing prices, ensure you're comparing troy ounces to troy ounces. Some products use grams.
Fineness / Purity
The proportion of pure precious metal in an item, expressed in parts per thousand. .999 = 99.9% pure. .9999 = 99.99% pure.
What it means for you: IRA-eligible gold must be .995+ fine (except American Eagles at .9167). Silver must be .999+ fine.
Bid/Ask Spread
The difference between what dealers will pay for your metal (bid) and what they sell it for (ask). Represents the round-trip cost of ownership.
What it means for you: Tighter spreads mean lower transaction costs. Sovereign coins typically have tighter spreads than private bars.
Bullion vs. Numismatics: The Most Important Distinction
Many gold dealers push "rare" or "collectible" coins with premiums of 30-100% over spot. They claim these coins will appreciate more, are exempt from confiscation, or have special tax treatment. These claims are often misleading.
Bullion (What We Sell)
- • Value tracks metal content
- • Low premiums (3-8% typical)
- • Instant liquidity worldwide
- • Transparent pricing
- • IRA-eligible
Numismatics (We Don't Sell)
- • Value based on collector demand
- • High premiums (30-100%+)
- • Liquidity depends on finding collectors
- • Subjective pricing
- • Not IRA-eligible
We only sell investment-grade bullion. If you want collectible coins, we're not the right dealer for you.
IRA-Specific Terms
Custodian
The IRS-approved entity that holds your IRA. They handle paperwork, reporting, and compliance. They don't store the metal—that's the depository.
Depository
The secure facility where IRA metals are stored. Must be IRS-approved. Examples: Delaware Depository, Brink's, HSBC vault facilities.
Segregated Storage
Your metal is stored separately, identifiable as yours. Higher cost than commingled storage but you get the exact items you purchased back.
Rollover
Moving funds from one retirement account to another. Can be direct (trustee-to-trustee) or indirect (60-day window). Direct rollovers avoid tax complications.
In-Kind Distribution
Taking physical possession of your IRA metals when you distribute. You receive the actual gold/silver rather than cash proceeds from a sale.
Required Minimum Distribution
The amount you must withdraw annually from Traditional IRAs starting at age 73. Can be taken in metal or as cash from metal sale proceeds.
Product Types Explained
Sovereign Coins
Coins minted by government mints with legal tender status: American Eagles, Canadian Maple Leafs, Austrian Philharmonics, etc.
- ✓ Government-guaranteed weight and purity
- ✓ Globally recognized and liquid
- ✓ Tighter buy/sell spreads
- ✗ Slightly higher premiums than bars
Private Mint Bars
Bars produced by private refiners: PAMP Suisse, Valcambi, Credit Suisse, Johnson Matthey, etc.
- ✓ Lowest premiums per ounce
- ✓ Efficient for larger purchases
- ✗ Slightly wider spreads on resale
- ✗ Less recognizable than sovereign coins
Rounds
Coin-shaped bullion from private mints. Look like coins but have no legal tender status or face value.
- ✓ Low premiums
- ✓ Convenient coin-like form
- ✗ Less liquid than sovereign coins
- ✗ Variable recognition by dealers
Fractional Coins
Smaller denominations: 1/2 oz, 1/4 oz, 1/10 oz gold. Allow smaller purchases and more divisibility.
- ✓ Lower dollar entry point
- ✓ Better for incremental purchases
- ✗ Higher premiums per ounce
- ✗ Less efficient for large purchases
Questions About Terminology?
If any of these terms are unclear, ask. Understanding the vocabulary is essential to evaluating products and avoiding overpriced offerings.