Allocated Bullion

When bullion is allocated, it is owned entirely by the investor. It may be stored in a vault or safe deposit box, outside of the investor’s custody, but they are still the sole owner. The advantage of allocated bullion is that it is safe from the insolvency of financial institutions, and so carries no counterparty risk.


To assay a precious metal means to test its purity level. This test should always be conducted by a certified assay office, which then provides the metal with a certificate of purity. For gold bullion to be accepted by international financial markets, it must be at least 99.5% pure.

Assay Office

An Assay Office tests and certifies the purity of precious metals. Some Assay Offices are government approved, such as the Sheffield Assay Office, while others are independently run. All gold and silver bullion should be certified by an assay office in order for it to be accepted into the financial market and traded.


A bailment is a legal relationship between the owner of bullion and the custodian of that bullion. The custodian is often a company that sells or stores bullion. It means that, in the event of the company’s failure, the bullion cannot be claimed as credit by that company, as they are only the custodians, not the owners.


Bullion is the generic name for investment grade gold and silver, whether in bar, ingot or coin form. Bullion is often bought and traded by investors as a means of securing their assets in a reliable, long-term venture.

Bullion Bars

Bars are typically the form in which bullion is traded and invested. They can be made at a mine or at a refinery, and are stamped with the name of their refiner, as well as their purity grade, weight and a unique serial number. The most commonly traded gold bars are 1kg and 400oz, while the most commonly traded silver bars are 1000oz.

Bullion Coins

A bullion coin is a gold or silver coin created by a national mint, which is used as an investment rather than for transactions. Bullion coins come in different weights and designs, and some are recognised as legal tender in their country of origin. Examples of bullion coins include the Golden Eagle, the Maple Leaf, the Krugerrand and the Britannia.


Britannia Coins

Britannia coins are British bullion coins, issued by the British Royal Mint since 1987. Gold Britannia coins contain one troy ounce of gold and have a face value of £100. The coins are also available in one-half, one-quarter and one-tenth sizes. Silver Britannia coins contain one troy ounce of silver and have a face value of £2.

Capital Gains Tax

Capital Gains Tax is a tax charged on the profit made from the sale of certain assets that were purchased at a lower price. The most common form of Capital Gains Tax is the tax on the sale of bonds, stocks and property. Capital Gains tax does not apply to UK residents selling British legal tender coins at a profit, such as Britannia and Sovereign coins.


A carat is a measure of gold fineness or purity, with the word itself deriving from the Greek ‘keration’, meaning carob bean. In the US it is spelled ‘karat’, while in the UK it is spelled ‘carat’. One carat is equivalent to a fraction of one twenty-fourth, so 24 carat gold is pure gold. The typical gold bar has a minimum of 23.88 carats.

Central Bank

A central bank, or reserve bank, is a public institution that has a monopoly on currency issue, currency minting, interest rates and regulation of the money supply. The central bank is responsible for the commercial banking system and becomes the last resort for lending in a banking crisis.

Chain of Integrity

Once a gold bar has been assayed and is of proven weight and purity to be accepted into the financial markets, it may then remain in professional vaults that are recognised by the London Bullion Market Association (LBMA). As long as it remains in these vaults, it is said to have remained in the gold market’s chain of integrity. This means that it does not need to be re-assayed and can be easily traded or exchanged.


A depository is a storage facility, similar to a professional vault, which provides security for precious metals. It allows access to high-security storage facilities, as well as safe and insured shipping between facilities. When bullion is kept in a depository, it is kept on a bailment agreement, so the owner maintains the full rights of ownership.


The Eagle is the national bullion coin of the Unites States of America, first released by the United States Mint in 1986. It is available in 1oz, 1/2oz, 1/4oz and 1/10oz denominations, and has a fineness of .9167. The coins are authorised by the United States Congress and backed by the United States Mint for weight and content.


Fineness is a measure of how pure, or fine, a precious metal is. It gives a value of 1,000 parts of an alloy, as measured by an assay office. If a gold bar has a fineness of .995, it contains 995 parts pure gold and 5 parts of other metals.

Fine Gold

Fine gold, or fine silver, is the term used to describe the metal in its purest form, after it has been refined and assayed. Fine gold may also be referred to as 24 karat gold or .999 gold, which represents its 99.9% purity grade.


Fixing is the traditional procedure by which a reference gold price is determined each working day. The term is taken from the London Fix, which provides the market with the latest official gold prices, as taken from the most recent gold auctions.

Good Delivery

Good delivery is the status given to bullion bars that are accepted by the professional markets and the London Bullion Market Association (LBMA). The bars must be of a fineness of at least 995 parts per thousand and remain part of the professional market’s chain of integrity. Good delivery gold achieves a higher resale value and is recognised by the international bullion markets


Hallmarks are marks that are struck on items made from precious metals, such as bars and coins. A UK hallmark will indicate the type of metal, its fineness, the year it was hallmarked and usually its maker. This is necessary for bullion to be traded in the professional markets.


See ‘carat’.


The Krugerrand is a South African gold bullion coin, and is one of the most popular and famous coins within gold investment. It was first minted in 1967 to help market South African bullion, during a time when South Africa was by far the world’s largest producer of gold bullion.


LBMA stands for the London Bullion Market Association, a London-based trade association that represents the wholesale over-the-counter market for gold and silver in London. The work of the association includes upholding refining standards, good trading practices and standard documentation.


Liquidity is a quality that allows an asset to be converted into cash quickly and with minimal impact on the overall value of the asset. Assayed bullion that has been kept within the chain of integrity has a high level of liquidity.

London Fix

The London Fix is a traditional method by with the price of gold is determined each working day on the London market. It has occurred for over 80 years in the same way and was originally designed as a means of settling large gold contracts between members of the bullion market. It now provides a recognised gold price that is used as a benchmark for pricing gold products across the global market.

Maple Leaf

The Maple Leaf is the national bullion coin of Canada, produced by the Royal Canadian Mint. The Maple Leaf is one of the purest mass produced coins in the world, with a fineness of .9999 and some special issue coins that are .99999 fine. Only gold mined in Canada can be used in the production of Gold Maple Leaf coins, and this has been the case since the coin was first introduced in 1979.

Milk Spots

Milk spots are small white marks that may appear on some bullion coins. Although they may initially cause worry, they have no impact on the value of the coin and are most likely to be caused by the polishing agents used by national mints.


The Australian Gold Nugget, also known as the Kangaroo, is an Australian 1oz 24 carat gold bullion coin, which was first produced by the Perth Mint in 1986. It is now available in denominations of 1/20oz, 1/10oz, 1/4oz, 1/2oz, 1oz, 2oz, 10oz and 1kg, making it one of the most varied bullion coins available.


Numismatic coins differ from standard bullion coins due to their rarity, provenance, appearance and condition, which add extra value onto the standard gold price. Numismatics can be made of silver or gold bullion, and can be a lucrative investment for experienced collectors who are able to sell their coins on at a much higher price.


The obverse side of a coin is the front side, which usually depicts the image of one or more people. The reverse side is the back of the coin, which often depicts an image or design that is relevant to the particular country in which it was made.

Paper Gold and Silver

The term paper gold or paper silver refers to the ownership of gold or silver which is not tangible or physical, and therefore only exists on paper. Examples of paper gold and silver include Electronic Traded Funds (ETFs), mining shares and precious metals funds.


A refinery is a place where precious metals are melted down and refined, in order to achieve a higher purity grade. There are hundreds of refineries around the world, some of which use modern, innovative refinery techniques, while others maintain traditional methods.

Safe Haven

The term safe haven describes a low risk option for investors during times of crisis and collapse. Many investors believe gold bullion to be a safe haven from declining confidence in the banking and currency system, due to its historic reputation for maintaining its value over time.


The Sovereign is a British gold coin, weighing 0.2354oz and with a nominal value of £1. It was first produced in 1489, and until 1932 it was a fully circulating coin within Britain’s then Gold Standard currency. Today, Sovereigns are minted by the Royal Mint in Wales, and are still classed as legal tender.

Spot Price

The spot price is the current price at which bullion can be bought or sold within the market. The spot price changes in line with the London Fix, which is updated twice every weekday. Buyers of bullion should watch the spot prices for gold bullion and silver bullion before purchasing.

Sterling Silver

Sterling silver is a specific standard of silver, often used in jewellery making and defined by law as 925 parts pure silver per 1000 parts overall. Sterling silver is the principal standard of silver in the UK and the USA.

Troy Ounce

A troy ounce is the unit of measurement most commonly used to weigh gold and silver. It is equivalent to 31.1035g, and is the agreed unit of measurement for the international bullion market. Whenever the weight of a piece of bullion is described in ounces, this always refers to troy ounces.

Unallocated Bullion

Unallocated bullion has not been sold to investors and is still the property of the bank, meaning that it carries counter party risk and is not protected from the insolvency of the bank. Once bullion is bought, it becomes allocated to an individual investor and therefore loses its counter party risk.

World Gold Council

The World Gold Council is a non-political organisation that promotes gold and is financed by the 24 largest gold mining companies. It conducts highly respected research into gold investment, which is analysed and discussed throughout the gold market.