Words You Need to Know to Navigate the Precious Metals Market

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Words You Need to Know to Navigate the Precious Metals Market

When it comes to navigating the world of Precious Metals the best weapon you’ll every have is knowledge. That’s why here at Global Monetary Reserve we start with education when we introduce a client to the lucrative potential of owning physical assets. The first step towards becoming a Precious Metals investing expert is grasping the terminology that is common in world of Bullion, Numismatics, and Precious Metal IRAs. Here are a few to help you start.

Bullion: Bullion comes in several forms and is purchased based on the metal content contained. Typical forms of bullion are bars, ingots, wafers, and coins. While bars are sold and priced based on their metal content, coins are sold above their metallic value. While most Bullion Coins will not have any added value other than the production cost, and metal value; some of the coins can rise in coin market if they are rare enough. Common Bullion Coins are the American Gold Eagle Coins, the Canadian Maple Leaf Coins, and the South African Krugerrand (the first international bullion coin).

Numismatics: Numismatics refers to the coins that have a higher value due to their rarity, condition, dates, mint mark (where they were minted) rather than their gold or silver content.

Spot Price: The price which reflects the current market value at which an asset is bought or sold for immediate payment or delivery. When it comes to Precious Metal spot prices, the London Bullion Market determines how much a metal is worth at a certain time. Prices change throughout the day much like stocks, and multiple outlets, including gmrgold.com show up to date market prices.

Obverse/Reverse: Obverse refers to the front of the coin which showcases the figurehead, or principle design of the coin; and the Reverse is the back of the coin.

Proof: A Proof is a coin which has a mirror like finish for the background, and matte, or frosted, finish for the design. They are created using special dies and planchets that are struck multiple times and result in the sharpness of details associated with the coins. Proof coins are the collector’s versions of coins.

Uncirculated: An Uncirculated coin is a coin in new condition and the term is used interchangeably with Brilliant Uncirculated or BU.

Fine Weight: The Precious Metal purity of bullion or coin measure in 1,000 parts. Such as the Gold American Buffalo Coin which is .999 Fine Gold: its fineness is 999 parts Gold to the 1 part of another metal. A South African Krugerrand is .9167 Gold; which translates to 91.67% Gold content.

Grading Service: Third-Party grading is performed by companies that authenticate, and certify the condition of coins. The two main grading companies are PCGS (Professional Coin Grading Service) and NGC (Numismatic Guarantee Corporation). While grading is a great way to tell the value of a coin, and both companies provide handy price guides, they are done by humans and variances can occur in coins of the same grade. MS refers to Mint State or Uncirculated and PF refers to Proof: the highest rating is 70.

Bid/Ask Price: Bid is the price that the dealer is willing to buy, and Ask is the price that the dealer is offering to sell.

Premium: Premium is the additional cost of the coin or bullion item and is over or above the spot price of the Precious Metal content. It can include the costs associated with fabrication, distribution or dealer fees. Rare coins carry a numismatics premium, and is tied to the grade/condition, rarity, demand, and the like.

Bull Market: The name given to the trend where a commodity is performing favorably and rising.

Bear Market:  The complete opposite of Bull, Bear Market is the term that refers to a downwards trend for a commodity.

Precious Metal IRA: GMR recommends having 15-20% of your retirement accounts protected with gold and other precious metals in order to secure your assets from downward trends in the market. It’s as simple as 1,2,3 and is completely tax-free if you’re transferring assets from an existing retirement account.  Call 877-795-9585 today to learn how we can help you secure you and your families future.