Capital gain/loss refers to the difference between the value received when an asset is sold or matures, and the price that was paid to obtain the asset originally.

If the bond price is greater than face value then:

\(\rightarrow\) The bond is said to trading "above par" or "at a premium"

\(\rightarrow\) Coupon Rate > Yield to Maturity

If the bond price is less than face value then:

\(\rightarrow\) The bond is said to trading "below par" or “at a discount”

\(\rightarrow\) Coupon Rate <Yield to Maturity

If the bond price is equal to face value then:

\(\rightarrow\) The bond is said to trading "at par"

\(\rightarrow\) Coupon Rate = Yield to Maturity

So if an investor buys a bond where the yield to maturity is higher than the coupon rate, this means that the investor can buy it at a discount and there can be a capital gain which is equal to the difference between face value (when coupon rate=YTM) and the “discount” price.