Top 10 Terms You Should Know Before Buying Precious Metals


  •    Spot Price: Describes a one-time open market cash transaction price of a commodity, where it is purchased “on the spot” at current market rates. In other words, it’s how much the metal is worth at the time, which is determined by the London Bullion Market. Spot Price flexes just like the stock market. Prices rise and fall throughout the day. Every minute. Simply put, it’s the value of the metal.
  • Premium: The additional cost of a coin or bullion item, over and above the spot price of the Precious Metal contained in the coin. The premium includes the costs of fabrication, distribution and a minimal dealer fee. Rare coins carry an additional premium representing numismatic value, which is based on scarcity, quality, demand and intangible factors.
  • Bid: The price at which a dealer is willing to buy.
    Ask: The price at which a dealer offers to sell.
  • Bullion: Bullion items are purchased for the metal content and investment aspect of the Precious Metal. They can be Gold, Silver, Platinum or Palladium coins which closely follow spot prices and have little or no numismatic value (such as restrikes and modern sovereign mint bullion coins). It can also mean the form in which metal is shaped, such as bars, ingots or wafers. The most commonly traded Gold bullion pieces among individual investors in the United States weigh 10 ounces or less.
  • Numismatic Coins: Coins whose prices depend more on their rarity, condition, dates and mint marks than on their Gold or Silver content.
  • Market Loss Policy: It is common for Precious Metal companies to have a cancellation and Market Loss policy. For example, when purchasing from APMEX, once a confirmation number has been issued, the price is locked in for you and the transaction may not be cancelled, but only offset at our current ask price. Any deficit between the price at which APMEX sold  and the offsetting purchase price and or prices, is the purchasers responsibility only if the item(s) is cancelled or returned.  Any market gain on cancellations would remain the property of APMEX. Just like with Stocks, you never know what is going to happen the next trading day.
  • BU: Brilliant Uncirculated; used to describe a coin in new condition. It is for a coin that has no wear and shows original luster, but it may have light handling marks or other imperfections.
  • Fineness: The purity of a Precious Metal measured in 1,000 parts: A Gold bar of .995 fineness contains 995 parts Gold and 5 parts of another metal. The American Gold Eagle is .9167 fine, which means it is 91.67 percent Gold. An American Silver Eagle has a fineness of .999, meaning that it is 99.9 percent pure.
  • Obverse: The front of a coin. The device on the obverse usually consists of the image of one or more people or which contains the principal design of the coin.
    Reverse: The back of a coin. The device on the reverse of a coin usually consists of a country’s coat of arms or an insignia.

We hope that this information provided in this post gives you a better understanding of the terms that are commonly used among the Precious Metals community. For questions or to find out more information contact APMEX at (800) 375-9006 or visit