Glossary — terms around precious metals and Spargold

The cost-average effect (also dollar-cost averaging) describes how a savings plan with a fixed contribution automatically buys more units when prices are low and fewer when prices are high. Over time this smooths your average buy-in price and reduces timing risk compared to a single lump-sum purchase. With Spargold this is the default mode for precious-metals savings plans from 5 € per month.

A duty-free warehouse (also free-trade zone or bonded warehouse) is a customs-segregated zone in which goods can be stored without immediate VAT or import duty. Spargold stores all customer precious metals in the duty-free vault “The Reserve” in Singapore. This means: no VAT applies to your silver or platinum either, as long as the metal stays in the vault. Import VAT would only become due if the metal were physically delivered into the EU.

The London Bullion Market Association (LBMA) is an international precious-metals industry body founded in 1987. Its “Good Delivery” list defines the worldwide quality standard for investment-grade gold and silver bars: purity, weight, form and refinery must meet certified requirements. Spargold's storage partner Silver Bullion is an LBMA member; all stored investment bars come from LBMA-certified refineries.

In allocated storage your precious metals are physically and namely assigned to you — you own a specific bar with a serial number, not just a claim to a quantity. This is the opposite of unallocated storage, where you only hold a receivable against the storage operator. In case of insolvency, allocated holdings are not part of the operator's balance sheet and remain your property. Spargold precious metals are stored 100% allocated in “The Reserve”.

The spot price is the reference price per troy ounce (31.1035 g) of a precious metal on the world market. It is continuously set on precious-metals exchanges (mainly London and New York) and is the basis on which dealers calculate their markups. When you buy a small coin you typically pay a substantial premium over the spot price; for large bars the premium per ounce is smaller, which is why Spargold buys large bars and sells you shares of them.

The spread (or bid-ask spread) is the difference between the price at which a dealer buys a precious metal and the price at which it sells it. It covers trading cost, storage and margins. At Spargold the spread is structured so that total costs are transparent: in the app you see the exact buy or sell price, with the spread and fee (gold 1% buy / 2% sell, silver and platinum 2% each) already included.

An Exchange Traded Fund (ETF) is a stock-exchange-listed investment fund that must hold several assets to satisfy diversification rules — pure gold ETFs are therefore not permitted in Germany. They are replaced by Exchange Traded Commodities (ETCs): collateralised bearer debt securities under which the issuer owes you gold, typically stored at a bank. This is not the same as physical ownership: if the issuer or storage operator goes bankrupt, losses can occur — with Spargold you own the metal directly and allocated to you.

“The Reserve” is one of the largest and most modern high-security precious-metals vaults in the world. It sits in a security zone close to Singapore's Changi Airport, is operated by LBMA member Silver Bullion and holds more than three billion US dollars worth of assets. Multiple yearly external audits, full insurance and allocated storage ensure your precious metals are physically allocated to you, not part of the operator's balance sheet and protected against loss, theft and damage.

A precious-metals savings plan debits a fixed amount from your account at fixed intervals and automatically buys shares of gold, silver or platinum bars. The plan leverages the cost-average effect, can be paused or cancelled at any time, has no minimum term and is available with Spargold from 5 € per month. The metals you buy are 100% your property and are stored allocated in “The Reserve”.