Explanations of "Gold" investment-related terms A to Z

Fibonacci retracement levels are a useful tool that can help you determine how much of a move in a given part of the main trend will retrace before that trend is resumed. Fibonacci retracements have been very useful in gold, silver and mining stocks as well as currency markets.

The sad truth is that each of us will have to face some kind of crisis at some point. What is important is how we deal with the hardship. We have all heard that the Chinese allegedly use the same word to describe the concept of crisis and opportunity – the idea is that there is an opportunity in every crisis. So let’s identify the opportunities for the gold market hidden in crises.

Fiscal Deficit arises when a government's annual expenditure exceeds its annual revenues (excluding money received from new borrowings).

Fiscal policy is an economic policy which uses government spending and taxation to influence the economy. It is the sister of monetary policy conducted by central banks to affect a national money supply. The fiscal policy influences aggregate demand by changes in the level of taxation and government expenditure. We say that fiscal policy is loose or expansionary when spending is higher than revenue (i.e., the budget is in deficit). On the other hand, fiscal policy is said to be tight or contractionary when revenue is higher than spending (i.e., the government budget is in surplus).

Almost every sovereign nation in the world issues and controls its own currency. There are some countries which have elected to use another country's currency, primarily the United States Dollar. Sovereign currencies are the legal tender within their respective countries. The need for exchange rates between sovereign currencies has arisen as international trade has spread and flourished.

Almost every sovereign nation in the world issues and controls its own currency. There are some countries which have elected to use another country's currency, primarily the United States Dollar. Sovereign currencies are the legal tender within their respective countries. The need for exchange rates between sovereign currencies has arisen as international trade has spread and flourished.

The Federal Open Market Committee (FOMC) is the policy making branch of the Federal Reserve Bank in the United States. It meets eight times a year to analyze the current market situation and make decisions based on its findings. The decisions made by the FOMC will have direct impact on the funds held by the Fed, causing ripple effects in the market. The decisions by this committee are eagerly awaited by the financial industry.

Forced Liquidation is the situation where open positions are offset by the brokerage firm holding the account, usually after warnings have been issued that the account is under-margined due to adverse price movements and failure to meet margin calls. Traders are always concerned of forced liquidation because it rebalances the portfolio to reduce the excess market risk under adverse market conditions. The broker has the right to offset the positions if the account holder chooses not to meet the margin requirements.

The foreign exchange (forex) market is an over-the-counter currency trading market that allows buyers and sellers to trade foreign currencies. The Forex market is the most liquid in the world with an average traded value of $1.9 trillion per day. The Forex market is operational 24 hours a day and five days a week. Individuals from all over the world can trade freely through forex trading.

Forward guidance, informally called ‘open mouth operations’, is public central banks’ communication about the likely future course of monetary policy in order to influence market expectations of future short-term interest rates and thus present economic conditions.

From a precious metals investor’s point of view, fractals are complicated structures of prices of metals (for instance, charts of prices of metals). The complexity of these structures (charts) can be described by a mathematical measure – the fractal dimension. 

A measure of the complexity of data. What is particularly interesting for precious metals investors, a fractal dimension can measure the complexity of price paths (or charts of prices) of metals. The higher the fractal dimension is the more complicated the price paths (charts) are.