gold investment, silver investment

Precious metals investment terms A to Z

Accredited Investor

Some kinds of investments are restricted to "accredited investors". See what it means and if you meet "accredited investor" requirements.

Read more
Algorithmic trading

Algorithmic trading, used mostly by institutional investors and large hedge funds, utilizes advanced mathematical tools developed by traders to forecast the most probable moves in the markets, and to initiate trades.

Read more
Analyst

Analyst is an individual whose primary function is a deep examination of a specific subject. Gold analysts study factors influencing the price of gold by various methods and try to predict future moves. Some are more accurate than other.

Read more
Asian financial crisis

The Asian financial crisis in the late 1990s with devaluation of local currencies caused unexpected havoc in global markets, with a domino effect, including a crisis in Russia, declines in stock markets around the world, and the fall and bailout of the U.S. hedge fund Long Term Capital Management (LTCM).

Read more
Asset swap

Asset swaps are seen to be both cash market instruments and credit derivatives in the financial markets. They are similar in structure to plain vanilla swaps and the difference between the two instruments is in the underlying swap contract. Plain vanilla swaps exchange fixed and floating interest rate products whereas asset swaps exchange fixed rate investments such as bonds which pay a guaranteed coupon rate with floating rate investments such as an index. Asset swaps are used to alter the cash flow profile of a bond.

Read more
Austrian School

The Austrian School is one of the schools of economic thought. Due to its methodological individualism, it is situated in opposition to the mainstream economics, which is based on large aggregates and mathematical models. The Austrian school was founded in 1871 with the publication of Carl Menger’s Principles of Economics, developing the marginalist revolution in economic analysis. Since it early representatives lived in Vienna, the term ‘Austrian School’ was coined, but its influence spreads across the world.

Read more
Authorized Participant (AP)

An Authorized Participant (AP) is usually a large financial institution, like a market maker, which is responsible for obtaining the underlying assets necessary to create and run an ETF. In short, in the case of gold ETFs, it buys gold and delivers it to the ETF provider. In turn, it gets a block of equally-valued (based on NAV) ETF shares, called a ‘creation unit’. The AP may resell these shares for profit. It may also redeem creation units to get the bullion back (only APs can create or redeem ETF’ shares, retail investors can only resell them in the market).

Read more
Backwardation

Backwardation is a phenomenon seen in the futures market, which futures traders need to monitor. A forward curve is said to be in backwardation when futures are traded at a discount in comparison with spot. Gold backwardation means that traders could potentially gain capital (versus simply buying gold right away) when holding gold futures until the contract expires.

Read more
Balance Of Payments

The Balance Of Payments is a government produced financial measure relating to a period of time which accounts in financial terms for the difference between the value of all the country’s imports and its exports. It is an important measure of a country’s relative performance in the global economy.

Read more
Bank of Japan (BoJ)

The Bank of Japan, based in Tokyo, is the central bank of Japan. It ensures the smooth settlement of funds among banks and other financial institutions and issues banknotes. The BOJ also carries out currency and monetary control, which is aimed at achieving price stability (understood as a 2 percent year-on-year rate of change of the consumer price index), thereby contributing to the sound development of the national economy. The BOJ’s highest decision-making body is the Policy Board.

Read more
Bear market

A bear market refers to a decline in prices, usually for an extended period, in a single security or asset, group of securities or the securities market as a whole. Its opposite is a bull market where prices are rising.

Read more
Bearish Divergence

A bearish divergence between the price and a technical indicator is a moderately useful tool for detecting a coming reversal in the bullish trend.

Read more
Bid-ask spread

The bid-ask spread is the difference between the price quoted by investors who want to sell a certain stock or asset (ask price) and those who wish to buy it (bid price). The higher the spread the less liquidity in the market for the asset.

Read more
Black Swan Event

A black swan event is a very surprising and rare event that is beyond the realm of normal expectations. Such an event is very hard to predict, since it is an outlier in the data series and nothing in the past points to the possibility of its occurrence. However, the event has an extreme impact. In other words, a black swan event is an unexpected event of large magnitude – the bankruptcy of Lehman Brothers in 2008 serves as a good example.

Read more
Bond Yields

A bond yield is a return on investment, expressed as a percentage, for a bond. Investors often analyze the Treasury yields, i.e. the returns on the U.S. government’s debt obligations. The price of bonds is negatively related to the yields they offer. Since there is a negative relationship between gold and the interest rates, there should be positive correlation between the price of gold and bond prices. In other words, there may be a positive relationship between gold and bonds due to the opportunity costs and capital flow from bonds to gold, when prices of bonds become too high (yields become too low). There may also be capital flows in the opposite direction (from gold to bonds) when bond yields increase (bond prices decrease) and provide a better alternative than gold.

Read more
1 2 3 4 5 ... 15

Recent articles

More

tops prediction corrections in gold

menu subelement hover background