Gold trading glossary
17 terms you will meet on price screens, invoices and jewellery receipts — in plain English.
A
Ask
The price a dealer will sell gold to you at. It is always the higher of the two quoted prices, and it is your buying price.
Example Ask 3,358 — you pay 3,358 per ounce.
Assay
A test that measures how much gold is actually in a piece of metal. An assay certificate is a lab’s statement of that result.
B
Bhori
The South Asian name for a tola: 11.664 grams. Most local jewellery is priced per bhori.
Bid
The price a dealer will buy gold from you at — the lower quoted price, and your selling price.
Example Bid 3,352 — you receive 3,352 per ounce.
Bullion
Gold held purely for its metal value, in bar or coin form, priced off weight and purity rather than craftsmanship.
C
Carat vs Karat
Karat (K) measures gold purity out of 24. Carat (ct) is a unit of weight for gemstones. Same sound, unrelated meanings.
F
Fineness
Purity expressed in parts per thousand instead of karats. 999 fineness is 24K; 916 is 22K; 750 is 18K.
H
Hallmark
An official stamp pressed into gold recording its purity, and often the assay office or maker. It is on the metal, not the tag.
K
Karat
The fraction of a metal that is gold, out of 24 parts. 22K means 22 parts of 24 are gold, or 91.6%.
M
Making charge
The labour and design cost added on top of the metal value of jewellery. It is rarely recovered when you sell.
N
Nisab
The minimum wealth at which zakat becomes obligatory. For gold it is classically 85 grams (about 7.5 tola).
R
Riba al-nasi’ah
Riba arising from delay: one side of an exchange settled later than the other. It is the reason gold must be traded hand to hand.
S
Sarf
The Islamic contract of exchanging one currency or precious metal for another. Its defining condition is immediate settlement by both parties.
Spot price
The price for gold delivered immediately, quoted per troy ounce of 24K gold. A reference point, not an offer you can take.
Spread
The gap between bid and ask. It is the dealer’s margin and your immediate cost of entering a position.
Example Ask 3,358 minus bid 3,352 gives a spread of 6.
T
Tola
A traditional weight unit equal to 11.664 grams, used across South Asia. Called bhori in Bangladesh.
Troy ounce
The weight unit gold is quoted in worldwide: 31.1035 grams. Heavier than the ordinary ounce used for food.