Troy Ounce (toz)
Standard unit for precious metals, equal to 31.1035 grams. Different from a regular ounce (28.35g). Used globally for gold, silver, platinum, and palladium pricing.
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Essential terms and definitions for understanding gold and silver markets
Standard unit for precious metals, equal to 31.1035 grams. Different from a regular ounce (28.35g). Used globally for gold, silver, platinum, and palladium pricing.
The current market price for immediate delivery of a commodity. Spot prices reflect real-time supply and demand and serve as a benchmark for other pricing.
The price difference between a local market price and the international benchmark (usually COMEX for gold). A positive premium means the local price is higher; a negative premium (discount) means it is lower.
A standardized agreement to buy or sell a commodity at a predetermined price at a future date. Futures are traded on exchanges like COMEX and are used for hedging and speculation.
LBMA standard for gold bars: approximately 400 troy ounces with minimum 99.5% purity. These bars are accepted for settlement in professional markets worldwide.
Gold or silver in bar or ingot form, typically of investment-grade purity (99.5% or higher for gold, 99.9% or higher for silver). Bullion is valued by its metal content rather than collectible value.
A reference price used as a standard for comparison. For gold, COMEX futures are a common benchmark. For silver, both COMEX and LBMA prices are widely referenced.
The difference between two related prices. Common spreads include bid-ask spread (difference between buy and sell prices) and calendar spread (difference between futures contracts of different months).
An investment that tends to retain or increase in value during market turbulence or economic uncertainty. Gold is traditionally considered a safe haven asset due to its limited supply and historical store of value.
The purity of precious metal, expressed in parts per thousand. For example, 999.9 fineness means 99.99% pure gold. Investment-grade gold typically has a fineness of at least 995 (99.5%).
A risk management strategy to reduce exposure to price fluctuations by taking offsetting positions in related markets. Jewelry manufacturers may hedge gold price risk by selling futures contracts.
Trading done directly between parties rather than on a formal exchange. The London Bullion Market (LBMA) operates primarily as an OTC market, where prices are negotiated bilaterally.
Tax charged by a government on gold or silver imports. Import duties vary by country and can significantly affect local premiums. For example, India historically has high gold import duties.
The number of ounces of silver needed to purchase one ounce of gold. A ratio of 80:1 means one ounce of gold costs 80 ounces of silver. Traders use this ratio to identify relative value between the two metals.
The actual transfer of physical metal, as opposed to cash settlement. While most futures contracts are cash-settled, some market participants take physical delivery for investment or industrial use.
Understanding precious metals trading terminology is essential for making informed investment decisions. These terms help you interpret market data, compare prices across different markets, and understand the factors that drive premiums and discounts in local markets.
Our premium tracker uses these concepts to provide real-time comparisons across major markets including COMEX, LBMA, Shanghai Gold Exchange, and Korea Gold Exchange, helping you identify arbitrage opportunities and understand regional pricing dynamics.