Home Precious Metals Glossary
Glossary
ArbitrageAsk PriceAssayBackwardationBear
Bid PriceBullBullionBullion CoinBuy at Best
Carat (Karat)Closing outCollateralCommission HouseConsignment
ContangoDeferred SettlementExchange for Physical (EFP)FinenessForward Contract
Forward ForwardGold CertificateGold FuturesGold ParityGood Delivery Bar
Gross WeightHedgeHoardingLondon Bullion Market Association (LBMA)Legal Tender
Limit OrderLiquidityLondon FixingMarginMargin Call
Market MakerMedalMoving Acerages (MA)One Cancel the Other Order (OCO)Open Interest
Put OptionRelative Strength Indicator (RSI)Short SaleStop Loss OrderTroy Ounce (oz)

  • Glossary and Terminolohy Definition
    • Arbitrage
      Simultaneously purchase and sale of the same commodities, or FOREX in different markets to profit from unequal prices.
    • Ask Price
      The price at which you can buy the specified instrument. This is also called the Offer price. For FOREX trading, it is the price at which you can buy the trade/base currency (quoted first) by selling the price currency of the pair. For example, if you buy EUR-USD 100,000 you are buying euros 100,000 against US dollars.
    • Assay
      To analyze (an ore, alloy, etc.) in order to determine the quantity of gold, silver, or other metal in it.
    • Backwardation
      A situation where spot gold price is higher than the gold futures price.
    • Bear
      An individual who perceives that the gold price will fall below the spot level in the future.
    • Bid Price
      Price at which an individual is prepared to pay for buying that specific instrument.
    • Bull
      An individual who perceives that the gold price will rise above the spot level in the future.
    • Bullion
      Gold in non-fabricated form.
    • Bullion Coins
      Gold coins minted in large quantities with low (3-5%) selling premium.
    • Buy at Best
      To buy the required quantity of instrument at prevailing market price.
    • Carat (Karat)
      Unit used in measuring the purity of gold. For example, 24 carat (24 karat or 24k) is pure gold and 18 carat (18 karat or 18k) is only 75% gold.
    • Closing Out
      Action to close a long or short position.
    • Collateral
      Gold used to plegde to secure a loan based on the spot price and margin arrangements between parties concerned.
    • Commission House
      An institution that buys and sells gold futures contracts for accounts of their customers.
    • Consignment
      Gold delivered in advance by a supplier to an agent with the intention to facilitate and increase sales in an overseas market.
    • Contango
      A situation where spot gold price is lower than the gold future price.
    • Deferred Settlement
      Gold purchased or gold settled at a later date agreed between seller and buyer.
    • Exchange for Physical (EFP)
      A situation when the buyer of spot gold transfers to the seller for an equivalent number of long gold futures contracts, or vice versa, at an agreed price.
    • Fineness
      Percentage of pure gold in an alloy expressed as parts per thousand by weight.
    • Forward Contract
      Contract for settlement of a gold deal at any date later than spot value date.
    • Forward Forward
      Simultaneous purchase and sale of gold for different maturity dates in the forward market.
    • Gold Certificate
      Document certifying the ownership of gold held at an authorized or recognized depository.
    • Gold Futures
      Contracts for the purchase or sale of gold for future delivery on a gold futures exchange.
    • Gold Parity
      Officially declared amount of gold to which the currency of a country is equivalent.
    • Good Delivery Bar
      Gold bar which conforms to the specification given by the London Bullion Market Association (LBMA) which is internationally recognized.
    • Gross Weight
      The actual weight of a gold bar or coin.
    • Hegde
      Taking a position on a gold futures exchange or on the forward market against a deal concluded on the spot market to protect a profit position.
    • Hoarding
      Accumulation of gold in anticipation of greater value in the future.
    • London Bullion Market Association (LBMA)
      London Bullion Market Association
    • Legal Tender
      Gold coins which the central bank of a country declares to be acceptable for any payment at their face value.
    • Limit Order
      Order placed by a customer with a specified limit on either price or time of execution, or both.
    • Liquidity
      Depth of the market and its ability to absorb large buying or selling orders without wide price fluctuations.
    • London Fixing
      Setting of the spot gold price which is held at 10:30 hours and 15:00 hours on each working day in the City of London by the five fixing members of the London Bullion Market Association (LBMA).
    • Margin
      The amount of money or collateral deposited with a broker, bank, or bullion house to insure against loss on an open position.
    • Margin Call
      Call for extra deposit as maintenance margin when market moves against an open position held by the customer.
    • Market Maker
      Banks, bullion houses or financial institutions making consistent two-way buy-sell price for gold.
    • Medal
      Small gold bar stamped or cast in the shape of a coin having no legal monetary value.
    • Moving Averages (MA)
      A moving average is the arithmetic average of the closing gold prices for a specified number of days or weeks. In technical perspective, if the price has departed too far from the moving average, the market is considered to be "overbought" or "oversold" retracement or slow down of the price is likely to occur until the average catches up.
    • One Cancel The Other Order (OCO)
      Orders placed by the customer to buy and to sell at specified prices. The sale order will be automatically cancelled when the buy order is filled and vice versa.
    • Open Interest
      Total of all open positions on a futures exchange.
    • Put Option
      Option giving buyer the right but not the obligation to sell gold at the stated striking price on or before the expiration date.
    • Relative Strength Indicator (RSI)
      RSI measures the gold's technical strength relative to its own past performance. The RSI often stays within boundaries between 70 and 30, showing a less volatile price movement. Once the RSI stays above the upper boundary, the gold is considered to be "overbought" while staying below the lower boundary is considered to be "oversold".
    • Short Sale
      Sale of gold which the seller does not own in anticipation of a lower level of price in the future.
    • Stop Loss Order
      Order placed by customer to buy or sell gold at the market if the specified price is reached.
    • Troy Ounce (oz)
      Metric unit system used to measure weight in precious metals.
     
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