Gold Facts

Gold Bars -The Traditional Way to Own Gold

If you would like to have physical possession of your gold and you want to pay the lowest possible price for it, you may want to consider gold bars. Gold bullion bars typically trade at the lowest possible premiums over their intrinsic gold value. Although the standard unit of gold in international trading is still the 12.5 kilogram (400 troy ounce) bar with a fineness of .995, known as a "London Good Delivery Bar" most investors deal in smaller sizes. Swiss America offers bars ranging from the petite one gram wafer through the hefty 100 troy ounce gold bar. For those who admire the Statue of Liberty and adore Pandas, don't miss the Liberty and Panda Mini-gram and Maxi-gram bars! They make wonderful gifts! If the spot price of gold is $350, the gold bars described in this file sell for prices ranging from about $35 to over $35,000 - providing opportunities for even the most modest of investors. Spot prices of gold are published daily in most newspapers around the world. It would be easy for you to sell gold bars because each bar bears the stamp of a respected refiner and is accompanied by its assay certificate to prove its authenticity.

Gold Bullion Coins

For investors who value the ease with which coins may be bought, sold and converted into cash, bullion coins make an excellent choice. Guaranteed by the issuing nation, a gold bullion coin is usually a legal tender coin and may have a nominal face value. In 1988, 3.1 million ounces of gold were used to meet investor demand for the U.S. Eagle, Canadian Maple Leaf, Australian Nugget, China Panda, Mexican Centenario and English Britannia. The most popular bullion coin was the Canadian Maple Leaf, which used 1.2 million ounces of gold, followed by the U.S. Eagle, which used 680,492 ounces. Bullion coins are also usually issued in convenient troy ounce-related weights, and are bought and sold at prices that include a small premium over their intrinsic gold value. The bullion coin usually has no collector value, with the exception of early-date issues of the Panda coin, which are valued both for their bullion content and numismatic appeal.

Numismatic Coins for Collectors and Investors

There are two types of gold coins that are featured at this site, numismatic and bullion. The chief difference between numismatic coins and bullion coins lies in how they are valued. Unlike a bullion coin which derives its value from its gold content, the value of a numismatic coin is determined by a combination of variables including age, rarity and its condition. Numismatic coins, such as pre-1933 United States gold coins, are highly sought after by astute collectors and investors for their beauty, historical value and investment potential. The growing popularity of modern issue numismatic gold coins is evidenced by the 1.8 million ounces of gold used in 1988 to mint such coins. In 1978, only 600,000 ounces of gold were used for this purpose. There is a gold coin or bar to fit almost every investment strategy. Whether your investment approach is conservative or aggressive, or whether your primary objective is preservation of capital, income or growth, gold can play a vital role in your portfolio.

Glossary of Terms

Alloy - The mixture of two or more metals, usually for purposes of strengthening the one which is the dominant part of the alloy. Gold is frequently alloyed with copper.

Ask - The price that a seller is willing to take in order to effect a sale.

Assay - Analytic test or trial to ascertain the fineness and weight of a precious metal in coin or bullion form.

Au - Chemical symbol for gold.

Authorized Issue - An issue by a governmental authority or by civilian or military authority in control of an area.

Bag marks - Minor abrasions on an otherwise uncirculated coin, caused by contact between coins in a mint bag.

Bid - The price offered to buy a particular precious metal item.

Bullion - Precious metal in negotiable or tradable form, such as a wafer or bar.

Bullion coin - A coin that is purchased at a price close to its intrinsic or precious metal value. (Examples: U.S. Eagles and Canadian Maple Leafs.)

Business strike - A coin which has been struck for circulation.

Coin - A piece of metal intended for use as legal tender and stamped with marks or inscriptions which show that it was issued by an authority that guarantees its weight and purity most often a government or bank.

COMEX - The Commodity Exchange, Inc., in New York, where gold and silver, as well as other commodities, are traded on a daily basis.

Counterfeit - A reproduction of a coin by someone other than the government legally authorized to do so.

Die - A hardening metal punch, the face of which carries intaglio or incused mirror-image of the devise to be impressed on one side of a planchet.

Deliverable bar - A precious metal (gold and silver, for example) with a weight that is approved as a tradable unit on one or more of the commodity exchanges.

Face value - The monetary worth of a coin. THis does not necessarily correspond to its actual worth. For example, the 1 oz. Gold Eagle has a face value of $50 but its real value is tied to the price of gold.

Field - The open area on a coin -its background.

Fineness or Fine - The portion of a precious metal relative to base or other alloy in a precious metal. A U.S. gold coin is .900 fine, meaning that 90% of the coin is gold and the rest alloy. A British Sovereign is .916 fine, meaning that 91.6% of the coin is gold and the rest alloy.

Fine weight - The actual weight of the pure gold in a coin, ingot or bar, as opposed to the items total (gross) weight, which includes the weight of the alloying metal(s). Example: a 1 ounce U.S. Eagle has a fine gold weight of 31.1033 grams and a gross weight of 33.933 grams.

Gram - The basic unit of weight in the metric system (31.1033 grams = 1 troy ounce).

Hallmark - Mark or marks which indicate the producer of a gold bar and its fineness or other characteristics.

Impaired - Damaged or mishandled; an object which is in less than new condition through other normal wear and tear in circulation.

Intrinsic value - The actual value of the precious metal within a coin.

Legend - The inscription on a numismatic item.

Lettered edge - Intaglio lettering milled onto the edge of a coin before striking or raised lettering on the edge of a coin produced by the use of a segmented collar die at the time of striking.

London fix - Price each day in London. Five old-line firms meet to set the price of gold. This is called the 'fix' and is a bench mark for market trading each day.

Market value - The price a coin will fetch in the open market which may be greater than or equal to its intrinsic value.

Medallion - A gold wafer in round form, resembling a coin. It is not legal tender and should not be confused with genuine "coin of the realm" of a specific government.

Mint luster - The sheen or bloom on the surface of an uncirculated numismatic coin resulting from the centrifugal flow of metal caused by the striking of the dies. Mint luster is somewhat frosty in appearance as opposed to the mirror-like smoothness on the field of a proof.

Mint marks - A letter, symbol or hallmark found on a coin that indicates the minting facility where it was struck. In the U.S., P (Philadelphia), D (Denver), S (San Francisco), and W (West Point) are frequently used for current coinage manufactured at those sites.

Modern issues - Coins struck for current issue, either for collectors, investors or circulation.

New York close - Because of the time differences, the New York gold market continues to sell precious metals for several hours after the London market has closed for the business day. Its last price has this name, and it may be higher or lower than the London fix depending upon market fluctuations.

Obverse - The side of a numismatic item which bears the principal design or device.

Ounce - A unit of weight equal to 1/16 avoirdupois pound or 1/2 troy pound.

Patina - Natural coloring acquired by a coin as a result of oxidation produced by certain soils and moisture thereon.

Planchet - The disc of metal or other material on which the dies of the coin are impressed. Also known as a coin blank.

Premium - The market value of a coin less the intrinsic value of the same represents the premium. A gold coin which contains $100 in gold (intrinsic value) and sells for $200 (market value) has a 100% premium.

Proof - A coin produced by a technique involving specially prepared dies and planchets and usually special striking (struck two times or more), resulting in particular sharpness of detail and a virtually flawless surface, usually mirror-like fields. A coin made specifically for collectors that is not for circulation.

Proof set - A set of one proof coin of each current denomination issued by a mint for a specific year.

Restrike - A numismatic item produced from original dies at a later date. (Example: Mexico 50 Pesos, 1947 coins are still being produced with the date 1947.)

Reverse - The side opposite to that on which the head or principal figure is impressed. The side opposite the obverse.

Spot price - The price quoted for a deliverable unit of a particular commodity, usually 100 ounces in the case of gold.

Spread - The difference between the buying price and the asking price of a precious metal coin or bar, sometimes referred to as 'bid' and 'ask.'

Uncirculated - A piece in new condition as issued by the mint. If it retains its original luster, it can be called 'Brilliant Uncirculated.'

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Gold Facts

Glossary of Terms