Agreeing on a price is an important moment in a physical precious-metals transaction, but it is not the end of the process. It is the point where a market discussion becomes a defined trade that must be documented and settled. The next steps establish exactly what was agreed, how the transaction will be identified and what must happen before metal can be allocated, stored or delivered.
The process begins with a firm quote
Before a trade exists, the physical-metals desk provides a price for a particular transaction. A firm quote normally relates to a defined metal, product, quantity and side of the market. It is also valid only for a stated period because both the underlying metal price and physical-market conditions can change. At Alloy Capital Commodities, firm quotes are held for fifteen minutes. During that period, the client can decide whether to accept the quoted terms. If the quote expires before acceptance, the desk may need to provide a new price reflecting the current market and available inventory.
Acceptance fixes the commercial terms
Once the client accepts the firm quote within its validity period, the parties have agreed on the core economics of the transaction.
Those terms can include:
● the precious metal;
● product type;
● quantity;
● agreed price;
● transaction direction;
● settlement instructions.
For example, the trade might involve a defined quantity of cast gold bars rather than simply an unspecified amount of “gold.”
That distinction matters because physical settlement requires actual products to move through an inventory and custody process.
Why written confirmation matters
A physical transaction should not depend only on the memory of a telephone call or email conversation.
Written confirmation creates a record of the agreed transaction.
It allows both the client and the desk to verify that they are working from the same product, quantity and price before funds and metal move.
According to the operating model described by Alloy Capital Commodities, trade confirmations are issued in writing during the same hour.
The objective is straightforward: convert the agreed trade into a documented instruction that can move through settlement.
The trade reference
A trade confirmation is also associated with a reference that allows the transaction to be identified as it progresses.
The trade reference connects different stages of the operation.
When funds arrive, the desk can associate them with the correct transaction. When metal is allocated, the custody records can connect that allocation back to the same trade.
This creates continuity between the original agreement and the final settlement.
Confirmation is not the same as settlement
This distinction is essential.
A confirmed trade means that the commercial terms have been agreed and documented.
Settlement means that the obligations created by that trade are actually completed.
For a purchase, this typically requires confirmed funds followed by allocation of the physical metal.
For a delivery instruction, further logistics follow after allocation.
A written confirmation therefore sits between pricing and settlement.
From conversation to transaction
The first operational sequence can be summarized as:
Firm quote → Acceptance → Written confirmation → Trade reference → Settlement instructions
Each step reduces ambiguity.
The price tells the client what the desk is prepared to transact at. Acceptance establishes agreement. The written confirmation records the terms. The trade reference allows the transaction to be tracked through later stages.
This is why professional physical-metals trading depends on documentation as much as pricing.
