gold investment, silver investment

Precious metals investment terms A to Z

M0 (monetary base)

The monetary base is the most liquid type of money circulating in the economy. The monetary base consists of physical money (coins, notes) and of the commercial banks’ deposits with the central bank. The most important characteristic of the monetary base is that, under typical conditions, it can be converted into goods or services (or other currencies) almost immediately. In most cases, the supply of monetary base is controlled by the central bank that can expand it, for example by issuing more paper money.

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MACD

MACD (Moving Average Convergence/Divergence) – is a technical analysis indicator based on the discrepancies between moving averages calculated for different periods. Through the use of these moving averages, the MACD generates buy and sell signals.Because of its relatively easy-to-interpret signals, the MACD has become a popular tool among gold and silver investors.

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Margin

Margin is the amount of funds deposited with a broker for that broker to extend credit for the purchase of securities. In other words, an investor or trader deposits this amount of money with their broker and the broker allows the investor/trader to open positions in the amount larger than the amount of the deposited funds. The difference is loaned by the broker and the broker charges interest on the loaned amount. Buying securities with the use of borrowed money is often referred to as “buying on margin.” Buying on margin might be risky and should only be done by investors/traders who are confident they know what they are doing.

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Margin Requirements

The gold futures market enables investors to leverage their positions using futures. In the futures exchange, investors do not have to post the total value of the contract as collateral in their accounts. Instead, a margin is required, which is only a small part of the value of the contract.

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Medium term

A medium period of time to hold an asset. How long is "medium" depends on individual investor's perspective.

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Milton Friedman

Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in the output.

“There ain’t no such thing as a free lunch”. As you probably know, Milton Friedman helped to popularize that phrase. But he was wrong. This article about Friedman and gold is completely free for you. So who was the one of the most influential economists of the second half of the 20th century whose direct and indirect influences on contemporary monetary economics would be, according to Ben Bernanke, difficult to overstate?

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Mining Stock Index

Picking the right mining stocks is not an easy task. So why not invest in the mining stock index? Straight away one question arises: which index? There are three main mining stock indices: the NYSE Arca Gold BUGS Index (HUI), the Philadelphia Gold and Silver Index (XAU), and the VanEck Vectors Gold Miners ETF (GDX). Which is the best?

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Mining Stocks

There are many ways to gain exposure to movements in the commodities, including precious metals. One of them is mining stocks, i.e. shares in mining companies.Mining stocks can be divided into two broad categories: seniors and juniors. The former are stocks of a considerably large commodity producing mining companies with an established position and relatively large market capitalization, while the latter are stocks of smaller mining companies with little capital and short history. For these reasons, juniors are more risky than seniors.

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Modern Monetary Theory

The Great Recession has shaken the world. It not only sent the global economy to the verge of collapse, but also sank the whole science of economics into disarray. The orthodox approach was questioned and alternative theories emerged. One of them is the Modern Monetary Theory (MMT) which is gaining traction with some economists and politicians, especially within the left wing of the Democratic Party. What is it and what would it bring for the economy and the gold market, if implemented?

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Monetary Policy

Monetary policy is an economic policy which aims to achieve macroeconomic goals such as low inflation, low unemployment, high economic growth and financial stability. The second major macroeconomic policy is fiscal policy conducted by governments. Monetary policy is usually conducted by independent central banks.

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Monetary Value

Money, it’s gas, as Pink Floyd sang and as we all know. But it’s also a medium of exchange which enables economic calculation and our sophisticated civilization. Over history, a lot of things were used as money, including cattle or salt, but precious metals dominated as a medium of exchange.

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Money Supply

The money supply is the total amount of money available in an economy at a particular point in time. The quantity of money is probably the most important concept in economic theory, since it affects the price level. The increase in money supply causes price inflation, while the decrease in money supply leads to price deflation.

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Mortgage

A type of a loan secured by real estate. A mortgage deal involves at least two sides – the borrower (typically a home buyer) and the lender (usually a financial institution). The lender provides the borrower with financial means necessary to buy a specific property. The borrower agrees to pay interest on the loan and uses the property as collateral. The deal might encompass various intermediaries between the lender and the borrower.

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Moving Average

A moving average (rolling average, rolling mean, running average, MA) is the average of the closing price of a security over a specified period of time. It smoothes short-term price fluctuations, thus giving a clearer picture of the trend. The 50-day and 200-day moving averages are quite often used as support and resistance levels for gold, silver and mining stocks.

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Municipal Bonds

Did you know that states, counties, or municipalities also can issue bonds? These bonds are called “municipal bonds”. As they are issued by local governments, they are mainly used to finance infrastructure projects such as the construction of highways, bridges or schools.

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