The process of analyzing a physical sample to determine its composition. In financial markets, the term assay usually refers to the chemical analysis of a mineral or ore sample to ascertain its content of precious metals or minerals, such as gold, copper, or uranium. These samples are obtained from drill holes made in a mineral or ore body, or property that is being evaluated for its metal or mineral content by a resource exploration or production company.


Since assay results provide an early indication of the potential value of a mineral or ore body, they are closely monitored by investors in junior resource companies, which are typically small-capitalization stocks. An exceptional assay result can trigger a substantial rally in the stock of a company that holds the mineral rights over the property. Conversely, poor assay results may lead to a significant decline in a stock that has run up on speculation about promising results.

In the futures markets, metals that are used to meet delivery requirements of futures contracts must be assayed to ensure that they meet the stringent quality and purity requirements mandated by the commodity futures exchange.

  1. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  2. Basis Grade

    The minimum accepted standard that a deliverable commodity must ...
  3. Precious Metals

    A classification of metals that are considered to be rare and/or ...
  4. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  5. Vault Receipt

    A document frequently used as a delivery instrument to indicate ...
  6. Underlying

    1. In derivatives, the security that must be delivered when a ...
Related Articles
  1. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  2. Investing

    Using Technical Analysis In The Gold Markets

    The quest for this shiny commodity has made millionaires of paupers and, on the flip side, ruined many an investor.
  3. Economics

    Strike Gold With Junior Mining

    Learn what to watch out for to ensure your "sure thing" isn't another Bre-X.
  4. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  5. Fundamental Analysis

    Using Decision Trees In Finance

    A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to.
  6. Economics

    Understanding Tragedy of the Commons

    The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.
  7. Fundamental Analysis

    Return on Investment (ROI) Vs. Internal Rate of Return (IRR)

    Read about the similarities and differences between an investment's internal rate of return (IRR) and its return on investment (ROI).
  8. Options & Futures

    Terrorism's Effects on Wall Street

    Terrorist activity tends to have a negative impact on the markets, but just how much? Find out how to take cover.
  9. Economics

    Current Probability of Donald Trump as President

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  10. Investing Basics

    Understanding the Random Walk Theory

    The random walk theory states stock prices are independent of other factors, so their past movements cannot predict their future.
  1. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  2. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  3. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  5. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  6. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center