Glossary of Terms – Toronto Metal Exchange

Alloy
A mixture of two or more metals. For example, gold is often combined with metals like silver, nickel, copper, or zinc to form Alloy Gold.

Approved Refiners
A select group of refineries that meet strict standards for metal purity. Their bars are accepted for delivery on futures exchanges and the spot market. For a complete list, visit the Gold Bars Worldwide website.

Ask Price
The lowest price at which you can buy a commodity. For real-time ask prices, check GoldStocklive.com.

Assay
A process to determine the content of precious metals (gold, silver, platinum) in ore or scrap. The Fire Assay Method is one of the oldest and most reliable techniques for this, involving scientific sampling and preparation. Toronto Metal Exchange offers full refining and assaying services.

Bar
A term for a solid block of gold, silver, or other metals, often sold in various sizes. Visit our online shop to learn more about the bars we offer.

Base Metal
Metals such as copper, aluminum, nickel, tin, zinc, and lead. These metals are less expensive and prone to oxidation or corrosion when exposed to elements, unlike precious metals.

Bear
An investor who believes a market or specific security will decline in value, and may profit from this downturn.

Bid
The highest price currently offered for a commodity, reflecting what you can sell it for at the moment.

Bull
An investor who believes the price of a particular commodity or security will rise over time.

Bullion
A term used to describe gold or silver in bulk, usually in the form of bars or coins.

Call Option
A contract that gives the buyer the right (but not the obligation) to purchase a specified amount of an underlying commodity at a fixed price, within a set period.

Karat
A unit of measurement for the purity of gold. The higher the karat number, the purer the gold.

Certificate
A document issued by banks or qualified bullion dealers to indicate ownership of a specific quantity of unallocated metal. It eliminates the need to hold physical metal.

Cut-off Grade
The minimum level of metal content (often expressed in grams or ounces per ton) required for a material to be mined or processed profitably. Material below this grade is considered waste.

Face Value
The nominal value of a bullion coin, as designated by its issuing government, which may be lower than its market value based on precious metal content.

Fine Ounce
A troy ounce of pure gold content. In a gold bar, this refers to a minimum purity of 99.5%.

Fine Weight
The weight of a precious metal bar, ingot, or coin, excluding the weight of any alloying metals.

Fineness
The purity of a precious metal, expressed as a decimal (e.g., 0.995 means 99.5% purity).

Fix
A process in which gold prices are set twice daily (10:30 AM and 3 PM) by five members of The London Gold Market Fixing Ltd. This price is used globally as a benchmark for most gold products and derivatives.

Gold Standard
A monetary system where a country’s currency is directly backed by physical gold. This system was used in various forms until 1971.

Hedge
A strategy used to protect against price fluctuations by locking in a sale price in advance. For example, gold producers may hedge against falling gold prices by entering futures contracts.

Ingots
Bars of gold, silver, or other metals, typically oblong and used for refining or trading.

Kilobar
A standard gold bar weighing 1 kilogram (approximately 32.1507 troy ounces) and commonly traded worldwide.

Koala
A 1 oz platinum coin minted by the Western Australian Mint. It is 99.95% pure.

Lease
The act of borrowing gold or silver to meet short-term working requirements or for hedging positions.

Maple Leaf
A 1 oz gold coin minted by the Royal Canadian Mint, 99.99% pure. Toronto Metal Exchange is an authorized DNA Bullion dealer for the Royal Canadian Mint.

Mint State
A term used to describe a coin in perfect, uncirculated condition, meaning it has never been used in general circulation.

Mint Mark
A small mark on a coin that identifies the mint where it was manufactured.

Numismatic Coins
Collectible coins valued not just for their metal content but also for their rarity, historical significance, or other factors.

Panda
A 1 oz gold coin minted by China and issued by the People’s Bank of China. It is 99.9% pure.

Paper Gold
Contracts to buy or sell gold that don’t involve an actual exchange of physical metal. These could include futures contracts, options, or certificates.

Physical
Refers to actual metal (gold, silver, etc.), as opposed to a claim on metal represented by paper gold.

Premium
The additional cost above the spot price of gold, charged by physical sellers to deliver metal in locations other than London.

Pure Gold
Gold with a purity of 24 karats or 99.99%.

Royal Canadian Mint
A government-owned refinery in Ottawa, Canada. It refines gold and manufactures the famous Maple Leaf gold coin. Toronto Metal Exchange is an authorized DNA Bullion dealer.

Royal Mint
A historic mint owned by the UK’s HM Treasury. It has been producing precious metal coinage since the 9th century and continues to produce gold, silver, and platinum coins.

Spot Price
The current market price for gold or silver for immediate delivery, rather than a future contract price.

Swap
A transaction where gold in one location is exchanged for gold in another location. The cost reflects shipping, insurance, and financing, as well as demand in different regions.

Tola
A unit of measurement used in India and the Middle East, equivalent to 11.1 grams or 0.375 ounces.

Troy Ounce
A unit of weight used for precious metals. One troy ounce is equal to 31.1034807 grams.

TT Bar
A gold bar weighing 10 tola (3.746 ounces), popular in India and the Middle East.

Two-Nines Five (0.995)
Gold with a purity of 99.5%, the standard accepted by the London Bullion Market Association (LBMA) for delivery against spot bullion contracts.

Unallocated Gold
A claim on gold bullion held by a bank or dealer on behalf of the owner. In an unallocated account, the customer doesn’t own specific bars but is considered a creditor of the bank or dealer.

Volatility
The extent to which a commodity’s price fluctuates over time. Higher uncertainty in the market often leads to higher volatility.

Wafer
A term used for small gold bars, typically weighing less than 50 grams.