Buying gold or silver in Canada comes with its own vocabulary: troy ounces in a metric country, GST/HST rules that turn on 99.5% purity for gold, Royal Canadian Mint Maple Leafs, LBMA bars and a spot price quoted in US dollars. This glossary explains each term in plain English, with Canadian examples and the tax rules that apply here.
It is written for first-time buyers and for anyone comparing dealers who wants to understand what sits behind a price. Each entry links to live CAD data, so you can go from the definition to the numbers. When you are ready, see the lowest delivered prices for gold coins in Canada.
All terms
B
- Bid-Ask Spread
- The bid-ask spread is the difference between the price a dealer sells a coin or bar to you (ask) and the price the dealer pays to buy it back (bid). It is the cost of a round trip, before any change in the gold price.
- Bullion
- Bullion is precious metal in a standard, high-purity form, such as bars, wafers or coins, bought and sold for its metal content rather than its design or rarity. Its price follows the spot price plus a premium.
C
- Carat or Karat (Gold Purity)
- A karat (K, also written carat or ct) measures gold purity in 24ths: 24 karat is pure gold, 18 karat is 18 parts gold in 24 (75%), and 10 karat is about 41.6%. It is not the same as the carat used to weigh diamonds.
F
- Fineness
- Fineness is the share of pure gold, silver or platinum in a coin or bar, written in parts per thousand, such as 999.9 for 99.99% pure gold. It tells you how much of the weight is precious metal and how much is alloy.
G
- GST/HST on Gold and Silver in Canada
- In Canada, gold and platinum of at least 99.5% purity and silver of at least 99.9%, in bar, ingot, coin or wafer form, count as precious metal for GST/HST. Their sale is generally exempt, so no GST/HST is added. Lower-purity coins such as the 22 karat Krugerrand are generally taxable.
L
- LBMA Good Delivery
- LBMA Good Delivery is the quality standard set by the London Bullion Market Association for the large gold and silver bars traded in the London wholesale market. Only refiners on the Good Delivery List can supply them.
N
- Numismatic Coins
- Numismatic coins are coins valued for rarity, condition, design, finish or history, so their price can sit far above the value of the metal inside. Proof, coloured and low-mintage releases are typical examples.
P
- Premium Over Spot
- The premium over spot is the difference between what you pay for a coin or bar and the value of the metal inside it at the spot price, usually shown as a percentage. It covers minting, distribution and the dealer's margin.
S
- Spot Price
- The spot price is the current wholesale price for one troy ounce of gold, silver or platinum for immediate delivery, set by trading in large bars between banks and dealers. It is quoted in US dollars and converted into CAD.
T
- Troy Ounce
- A troy ounce is the unit used to weigh precious metals worldwide and equals 31.1035 grams. It is about 10% heavier than the everyday avoirdupois ounce (28.35 g) used for food and parcels.
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