gold investment, silver investment

Precious metals investment terms A to Z

Pair Trading

Pair trading is a market neutral trading strategy that profits from virtual market risk conditions such as sharp swings or sideways movements. Relative price movements between the stocks validate profits on trade. Also, pair trading is a hedge against individual fluctuations in the sector and the overall market where the stocks belong.

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Paper Gold

Paper gold – an asset that reflects the price of gold while not actually being gold itself; it’s not backed by real metal, so it’s considered to be only on paper.

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Paper Silver

An asset that reflects the price of silver while not being silver itself; it’s not backed by real metal, so it’s considered to exist only on paper.

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A pattern, as the word suggests, is something that repeats in a noticeable way. For example, a patterned carpet consists of repeating images that are similar or the same. But there are more useful patterns in our everyday life and, more to the point, patterns that have implications for precious metals investors. Below we present a few examples of every day patterns.

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Phi number

Phi (Greek letter φ) – also known as the golden number or the golden ratio –  is an irrational number, approximately equal to 1.61803399, that can be used to predict market moves, as it is an indispensable element of such tools as Fibonacci retracement levels or Elliott wave theory.

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PM Stock

Abbreviation for Precious Metals Stock.

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Point Optimization

Point optimization requires solving problems concerning the maximization or minimization of a real function by checking all available alternatives (variables), and thereby discovering the best available solution.

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A grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals.

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Portfolio Diversifier

A portfolio diversifier is a portfolio addition which reduces the overall risk in a portfolio. This is an important feature, since diversification allows investor to obtain a desired return without taking as much risk as with an individual security.

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Precious Metals

A precious metal is defined as a rare, naturally occurring chemical element that has high economic value and is chemically resistant. In the past, precious metals served as a currency. Now they are an investment or industrial commodity.

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Purchasing Power Parity (PPP)

Purchasing Power Parity (PPP) allows us to compare economies more effectively than nominal purchasing power. It enables us to assume that all people are using the same currency and that prices all over the world are the same, helping us measure the affluence of each country in a comparable way. This provides a clearer picture of the global economy.

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Put Options

A derivative that provides you with leverage during downtrends, while limiting your risk. The catch is that you have to be right on time.

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Put-Call Parity

The put-call parity is useful as part of a hedging/ speculative strategy for a trader who wants to participate in the futures market. The put-call parity explains the relationship between the prices of put and call options in the same category--in other words, options with the same strike price, expiration date and underlying price.

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