Words Related To Gold and Meaning

While having a good time reading this article, ensure you memories some of these common words related to gold mining if this is your line of profession. This is to incline you with what you should not be asking when you go through any commodity details of gold.

Either you are to purchasing gold for general or personal use, these words related to gold would always come in commodity information.

Greetings to you, I do hope your day is fine over there.

Most often, when I get a request from foreign or local gold buyers/brokers, some may be new to these gold related words, and it would be helpful if I consider noting some of these common words to ease your mind considering them as difficult sentences or words to memorize.

In this article I will list out some common words related to gold mining and some other natural precious stone. However, for that of gold these words always comes with commodity details to enable buyers understand the commodity information, such as:

Gold (AU), Hallmarks, Bullion, LBMA

Quantity

Carat/karat

Origin

Purity

Delivery procedure: CIF, Escrows, and FOB

Refining

Gold Assay

Smelting

What is Gold (AU)?

Gold, Au, atomic number 79, is a precious metal that is used as a standard for money and also used in jewelry. It is extremely malleable and conducts electricity well. Au is a metal with an atomic number of 79. It is a transition metal and it doesn’t usually react with other elements. Gold is a precious metal and is used in dentistry.

Hallmark gold, on the other hand, refers to the certified quality of gold. The Bureau of Indian Standards or BIS awards a hallmark on gold jewelry. Being hallmarked ensures that the quality of gold is as per claimed by the seller and customers aren’t duped when buying or reselling items.

What is Bullion Market Function?

LBMA is London Bullion Market Association. An international trade association representing the global bullion market and defines itself as “global authority on precious metals”. There are various bullion markets around the world with the London Bullion Market known as the primary global market trading platform for gold and silver.

In gold counting numbers are not referred to as volumes. However, numbers are recorded as quantity and measured in kilogram. You cannot say 50 gold, it sounds wrong!

You should as well say: “50kilogram (kg)” to sum the total quantity. Even if it is 1000 gold, it is not titled as 1000kg, it is titled as 1,000kg (ton).

Note: that in counting we have what is called hundred, tens, and units. In example below

Hundred: are three figures (123). Tens: are two figures (12).
Units: is one figure (1) it doesn’t come as two or three. It is always the smallest number.

Gold Counting With Major Counting Difference

1 unit in number is regarded as (1), but 1 in gold is regarded as 1kg of gold.
Tens could be two digits (55) in numbers, but still seen as 55kg of gold. The mathematical pronouncement could be said to be tens of Gold in kg.
Hundred could be seen as three digits (100), but still measured as 100kg of gold
A thousand is 4 digits (1,000) but still measured as 1000kg or 1 ton.

When referring to precious physical metals, a ton refers to gold ton” or “gold tonne”.

It is a gold measurement. The name carat derives, via Medieval French and Italian, from Arabic qīrāṭ, meaning “bean pod,” which is itself from Greek keratin, referring to both the carob bean and a small weight. A carat is a unit of weight used to measure the size of a gemstone such as a diamond. A karat is a measurement indicating the proportion of gold in an alloy out of 24 parts, so 18K gold is 18/24 parts gold. The use of a carat (in place of karat) to indicate the fineness of gold is also considered acceptable.

What Is Origin?

The origin of gold or any precious metal is the origin of where it comes from. Where it was first gotten. Gold or diamonds can come from any location, but it usually has an origin.

What Is Purity?

Gold comes in different purity. The purity of gold is denoted in karat, where 24-karat gold is 99.9% pure, 23-karat gold is 95.8% pure, and 22-karat gold is 91.6% pure. Purity is what usually determines the value of the price of gold. The higher the purity the purer it is said to be.

What Is CIF?

CIF stands for Cost, Insurance, and Freight. These are the fees a seller pays to cover the costs, insurance, and freight of a dealer’s order when it’s en route. This sums up the CIF definition. Only commodities carried by water, air, sea, or ocean are subject to CIF.

What Are The Terms Of CIF?

CIF will be used by exporters having direct access to ships.
Within the time frame specified in the purchase agreement, the seller has obliged the items to ship.
Once the goods are loaded, the seller’s responsibility ceases. The selling agreement may specify differently.
The customer has to pay according to the conditions of the purchase agreement, including extra transport, examination, registration charges, import taxes, taxes, and other fees.

When is CIF Used?

Cost Insurance and Freight (CIF)

CIF can only be considered to transport products by sea or river, excluding air freight. CIF is a decent option for customers who want to avoid getting insurance, freight charges, and accepting responsibility for foreign delivery. In such cases, CIF is used.

What are CIF Escrows?

First, you have to understand what “Escrow is.” Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement). An escrow Account is a kind of account that usually serves as a security measure to store funds and protect the interest of two parties involved in any transaction.

What are the Differences between CIF (Cost, Insurance, and Freight) and CIF (Escrow) In the Precious Metal transaction Business?

An escrow CIF in a precious metal business transaction is a little different from a complete CIF procedure in a precious metal purchasing business.

In complete CIF in gold transaction business, when buyers want to purchase gold from a different country like Dubai buyers purchasing gold from Ghana; the seller would or may request the buyer to issue any of the transferable bank instruments from the buyer bank. The bank instrument could be BG, DLC, SBLC, or LC as an assurance they won’t default if sellers pay for the precious metal to buyers’ destination without any form of cash payment from buyers.

This is to enable the seller to avoid financial loss from the cost of exporting the precious metal to the buyer’s location, just in case the buyer didn’t show seriousness to show up or buy when gold arrives at his location. This bank instrument would enable the seller to recover the amount used to export the commodities to the buyer’s country.

While the seller then gives a 2% performance bound (PB) as a guarantee for the buyer to withhold in case the seller default, this is to enable the buyer to get back his money for the sum paid to obtain any of the instrument from their bank. This instrument can only be withdrawn if anyone defaults at the given time as agreed.

For the CIF Escrow procedure in the gold mental transaction, the seller and buyer must have lawyers licensed to operate in the buyer’s country.

The seller would have an escrow account to receive the funds from the buyer in that country. The buyer and lawyer would then go into a legal agreement with the escrow company to deprive anyone of having single access to the account without the approval of the second party until the agreement between both parties is completed. Then the buyer would pay the full amount of the total quantity of gold required by the buyer to the escrow account.

When such an agreement is entered into the seller will ensure to deliver the precious metal to the buyer’s location without the buyer making any upfront payment to the seller.

When the gold gets to the buyer’s location, it will be taken to the agreed refinery for assay to which after assay, both lawyers give approval for the funds’ release to the seller account, then the seller hand over the ownership document to the buyer.

Who Manages An Escrow Account?

Escrow accounts may be handled by a variety of third parties, including an escrow company, escrow agent, or mortgage servicer. Where you’re in the process will determine who manages the account.

You can contact us if you want to buy gold using the escrow procedure explained above to purchase precious metal.

What Is (FOB)?

Free on Board (FOB)

Under a FOB agreement, the supplier assumes responsibility until the goods are loaded onto the shipping vessel. This means they pay for the goods to be transported to the port and onto the vessel. As such, the seller has a limited set of responsibilities under the contract.

What Are The Differences Between CIF (Cost, Insurance, And Freight) And FOB (Free on Board)?

The main differences between CIF and FOB lie in who assumes responsibility for the goods during transit. Under a CIF agreement, the seller assumes the costs and risks associated with transport until delivery, which is when the buyer assumes responsibility. With a FOB agreement, the seller transfers all of the risk and costs to the buyer once the shipment is loaded onto the shipping vessel.

What Is Refining?

Refining is define as the process of removing impurity in the gold by two most common methods which are Miller process and Wohlwill process. In this process, a casting of impure gold is lowered into an electrolyte solution of hydrochloric acid and gold chloride. Refining are employed to improve the gold product quality.

Smelting is the process of extracting metal from ore by using high pressure, heat and chemicals. Smelting gold involves high-technology and high cost tools to perform. Note that smelting is important to determine if you are buying real gold or fake.

In conclusion,

I hope this information assists most of those contacting me for gold, asking for some of this basic information one should get familiar with in the precious metal business.

Categories : Gold