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Trading glossary - Bullion and Precious Metals

Active Delivery Month: The quoted Delivery Month on the most frequently traded futures contract on a Futures exchange.

Assay: Test of precious metal purity or fineness.

Assay mark: The stamp placed by an assayer on a precious metal product as a guarantee of its fineness.

Assay office: An organisation setting and monitoring the fineness of precious metals in a particular country

Backwardation: Market scenario when the spot price of a commodity is higher than the forward price.

Bullion: Precious metals such as platinum, palladium, gold and silver in bulk form, i.e. in the form of bars, ingots or plate rather than in coin, grain or sponge.

Contango: Market scenario when the forward price of a commodity is higher than the spot price. In the precious metal markets this is the result of monetary interest rates being greater than precious metal lease rates.

Fineness: The proportion of precious metal in a product or alloy typically expressed as parts in 1,000.

Grain: Granules of metal usually derived from melting sponge and pouring the molten metal into water.

Ingot: A form of metal bar, often a preferred form for delivery.

Location swap: The dealer practice of exchanging a quantity of metal in one location for an equal quantity of metal in alternative location held by another dealer. Location swaps help to reduce shipping costs and can reduce manufacturing leadtimes.

Precious Metal lease rate: An interest rate charged for borrowing precious metal.

Sponge: A powdered form.

Troy ounce: The traditional unit of weight for precious metals. One troy ounce = 31.1034807grams, 32.150746568 troy oz = 1 kilogram.

Source: Platinum Today

:) Falkor

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