The spot price is a wholesale reference for unallocated metal under standardised conditions. It does not represent the price of a specific physical item and excludes fabrication, custody, and verification conditions.
A premium reflects the transformation from metal value to a specific physical product under given market conditions. It is not a retail markup and does not imply recoverability at exit.
The spread reflects the difference between immediate buy and sell conditions. It captures liquidity, verification effort, and counterparty context, not a fixed transaction cost.
The troy ounce is the standard unit for pricing and documentation in precious metals markets. Misalignment of units leads to non-comparable valuations.
Fineness expresses gold content in parts per thousand. It defines composition, not authenticity or acceptance.
Karat is a legacy purity scale primarily used outside bullion markets. In bullion contexts, fineness provides the operative reference..
LBMA functions as shorthand for established wholesale conventions and specifications. It supports comparability but does not certify individual items or remove verification requirements.
Bullion derives value primarily from metal content under recognised formats. Pricing follows reference benchmarks adjusted by product-specific conditions.
Coins combine metal value with format-specific demand and recognition. Their behaviour may diverge from bars due to retail-driven dynamics.
Bars represent direct physical formats with size-dependent premiums and acceptance conditions. Liquidity depends on recognisability and documentation coherence..
Numismatic assets derive value from rarity and condition rather than metal content. Their pricing logic is independent of bullion market structure.
Market risk includes changes in spot, premiums, and spreads. These components move independently and shape realised outcomes.
Counterparty risk arises wherever performance depends on another party’s obligations. It increases with ambiguity, weak documentation, or bundled roles.
Authenticity risk concerns whether stated properties are correct and verifiable. It includes both fraud and uncertainty caused by incomplete or inconsistent records.
Custody risk relates to control, access, and the persistence of records over time. It extends beyond storage to enforceability of ownership claims.
Liquidity risk is the risk that an asset cannot be sold without material concessions. It is determined by acceptance, verification requirements, and counterparty conditions at exit.
Allocated arrangements link ownership claims to specific, identifiable metal. Their strength depends on enforceable documentation, not labels.
Unallocated arrangements represent claims against a pool or system rather than discrete items. They reduce operational friction while increasing reliance on counterparty performance.
Chain of custody is the documented continuity of control and transfer over time. Breaks reduce interpretability and increase transaction friction.
Proof of ownership is the ability to demonstrate a claim through coherent, independently interpretable records. Its validity is context-dependent and assessed at the point of use.
Liquidity describes the ability to convert an asset into cash under prevailing acceptance conditions. It is conditional and becomes visible under stress.
Bid–ask dynamics reflect the difference between immediate buying and selling conditions. They express market willingness, not historical cost.
Resale friction arises from verification demands, documentation gaps, and counterparty requirements. It is structural and accumulates over time.
Spot is a reference, not a transaction price. Premiums reflect structure, not guaranteed resale. Liquidity is conditional, not automatic. Standards support acceptance, not proof. Physical gold changes exposure; it does not remove uncertainty.