Precious metals investment terms A to Z

Within definitions

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.

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.

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.

Pattern

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. Namely, gold price patterns can help us determine the direction in which gold will head next and the same goes for silver.

Paul Volcker

Double-digit inflation is a terrible thing - and it got up to 14 or 15 percent on a monthly basis for a while, shortly after I became chairman of the Fed.

Paul Volcker, also known as Tall Paul (for his height above 2 meters – actually, as one can see below, there is a curious correlation between the height of the Fed chair and the level of the federal funds rate), was born in 1927 in Cape May, New Jersey. He earned his M.A. in political economy from Harvard University in 1951. One year later, he started his professional career at the Federal Reserve Bank of New York as a full-time economist. He resigned in 1957 to join the Chase Manhattan Bank as a financial economist. He also worked for the Treasury Department for several years during the 1960-1970. In mid-1970s, Volcker served as president of the Federal Reserve Bank of New York. In 1979, President Jimmy Carter appointed him to head the Federal Reserve System. He took office on August 6th, 1979. In 1983, President Ronald Reagan re-nominated him to a second term. Volcker rejected the reappointment for a third term, so he was replaced by Alan Greenspan in August 1987.

PCEPI (Personal Consumption Expenditures Price Index)

The Personal Consumption Expenditures Price Index (PCEPI) measures the average change in prices for all domestic personal consumption. There is also core PCEPI which excludes high volatility items, such as food or energy. It is a part of the Personal Income and Outlays Report issued monthly by the Bureau of Labor Statistics and it is derived from personal consumption expenditures. The index is similar in many respects to the CPI, but there are some important differences. In particular, they are calculated by distinct formulas, they assign different weights to particular goods and services, and they have various scopes.

Peak Gold

Imagine the world without the production of gold. The end of the mining of the yellow metal. The termination of all gold mines. No more gold nuggets, no grain, no flakes. Sounds depressing, right? It would not be a world without the chemical element with the symbol Au, as fortunately a lot of bullion is held as investments coins, bars or jewelry. But still, it is hard to imagine the world without gold mining. Such gloomy visions are connected with the idea of peak gold.

Peak Silver

Imagine the world without the production of silver. The end of the extraction of the white metal. The termination of all silver mines. Sounds depressing, right? It would not be a world without the chemical element with the symbol Ag, as fortunately a lot of bullion is held as investments coins, bars or jewelry. But still, it is hard to imagine the world without silver mining. Such gloomy visions are connected with the idea of peak silver.

People’s Bank of China (PBOC)

The People’s Bank of China, based in Beijing, is the central bank of China which conducts the monetary policy in mainland China. The top management of the PBOC is composed of a governor and a certain number of deputy governors. Zhou Xiaochuan has been the governor of the PBOC since December 2002. The objective of the PBOC’s monetary policy is to maintain the stability of the value of the currency and therefore promote economic growth.

Personal Income and Outlays

The Personal Income and Outlays Report (sometimes called the Personal Consumption Report) is issued monthly by the Bureau of Economic Analysis, 4-5 weeks after month’s end. It is an important economic indicator to help gauge the strength of the consumer sector in the U.S. The report contains two sections: the first section deals with personal income, while the other deals with personal outlays.

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. It's useful also for gold and silver investors.

Platinum as an Element

Chemically, platinum is an element with the symbol Pt and atomic number 78. It belongs to noble metals, being one of the rarer elements in Earth's crust. Platinum is also a member of the family of platinum group metals (PGMs) which also includes palladium, rhodium, iridium, osmium, and ruthenium. It is the least reactive metal and, as other precious metals, it resists corrosion. Due to its malleability and ductility (and resistance to wear and tarnish), platinum is also widely used in the jewelry industry as a substitute for gold. Platinum is silver to dark steel-grey in color, which probably explains why it is often mistaken for silver. Actually, its name derives from the Spanish platina, literally meaning “little silver”.

Platinum as an Investment

Platinum has never practically served as money (except for a short period in Russia, where platinum coins were used as a regular national currency), but it is used an investment. Because it is a precious metal, platinum often trades directionally with gold. However, platinum is much more widely used in the industry; therefore, it behaves more like a commodity and it is more business cycle-sensitive than gold or even silver.

Platinum to Palladium Ratio

The platinum-to-palladium ratio is the price of platinum divided by the price of palladium. The indicator works just as the gold-to-silver ratio, the gold-to-platinum ratio or the gold-to-palladium ratio, and it shows how many ounces of palladium one ounce of platinum can buy. It measures the relative strength of platinum prices compared to palladium prices. When the ratio is low, it means that platinum is undervalued relative to palladium. When the ratio is high, it means that platinum is overvalued relative to palladium. Investors can thus use the ratio as a timing indicator deciding when to reallocate investment positions between these two precious metals.

PM Stock

Abbreviation for Precious Metals Stock.

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